The largest German-owned companies have almost 20% more exposure to pensions risk than top UK and Dutch firms and over three times more than French-owned organisations, according to new research by Mercer Human Resource Consulting. The analysis – designed to help investors assess pensions risk in the major European financial markets – also shows that a significant proportion of pension liabilities in German companies remain unsecured by assets, despite large-scale voluntary funding by some firms. The combined value of pension liabilities in the biggest German-based companies (the DAX 30) is equivalent to 31% of the organisations’ market capitalisation. This pension risk exposure is around a fifth higher than for the top UK (FTSE 100) and Dutch (AEX 25) companies, which have liabilities equating to 26% of their market capitalisation.  Furthermore, the largest French-owned companies (CAC 40) have pension liabilities equivalent to just 10% of their market capitalisation, which means their risk exposure is less than a third of that of German companies. By way of comparison, pension liabilities in the top US companies (S&P 500) amount to 15% of their market capitalisation.
Pension liabilities in top European companies