Current model calculation: DAX and MDAX pension companies well funded despite volatile markets

Current model calculation: DAX and MDAX pension companies well funded despite volatile markets

According to a report by www.private-banking-magazin.de, the level of funding of the DAX and MDAX pension companies continued to rise in the first half of the year despite volatile capital markets. The discount rate fell slightly, which led to an increase in pension obligations. However, this increase was more than offset by the growth in pension assets, mainly due to the upswing in the stock markets. As a result, the level of funding rose again and now reaches 83.3 percent in the DAX and 78.4 percent in the MDAX.

According to the “German Pension Finance Watch” model calculation by the management consultancy WTW, almost all asset classes were able to increase in the first half of 2023. The stock markets in particular have risen significantly, which has benefited pension assets. Nevertheless, it should be noted that the capital markets continue to be very volatile, which causes overall economic uncertainty. Companies are therefore advised to keep a close eye on their pension systems.

The current situation regarding fears of recession and the shortage of skilled workers could lead companies to revise their strategy when it comes to fringe benefits. According to WTW's Benefits Trends Survey, it is particularly worthwhile for companies to rely on company pension schemes (bAV) now, as this can lead to greater employer attractiveness and greater company loyalty.

The “German Pension Finance Watch” model calculation analyzes the effects of current developments in the capital markets on German pension plans using three benchmark pension plans. In addition to this analysis, WTW provides data-driven solutions across people, risk and capital to help companies sharpen their strategy, improve organizational resilience and maximize performance.