Year in review
The funded status of corporate pension plans experienced a significant improvement in 2025, led by robust investment returns that surpassed expectations. Pension liabilities were essentially flat, with discount rates experiencing a net decline of 13 basis points (bps) for the year. The net result was a funded status improvement of $54 billion for 2025. This comes on the heels of a $50 billion funding improvement during 2024.
Plan assets for the Milliman 100 companies posted a cumulative annual return of 11.32% during the period. The monthly expected investment return during 2025 was 0.53% (6.53% annualized), as reported in the 2025 Milliman Pension Funding Study (PFS). Investment returns have been above PFS expectations in seven of the last 10 years. For reference, the discount rate at the end of December 2024 was 5.59%; it decreased to 5.46% by the end of December 2025.
Overall, the funded ratio soared during 2025, rising from 103.6% at the end of 2024 to 108.1% by the end of 2025. While plan assets increased by $53 billion during the period, plan liabilities decreased by $1 billion due to the aforementioned discount rate changes along with updated data from the 2025 PFS. The resulting $54 billion funded status gain during 2025 lifted the year-end funded status surplus to $98 billion.
The projected asset and liability figures presented in this analysis will be adjusted as part of Milliman’s annual 2026 PFS, which will summarize and report on the most recent plan sponsor financials filed with the U.S. Securities and Exchange Commission. The 2026 PFS will also reflect reported pension settlement and annuity purchase activities that occurred during 2025. De-risking transactions generally result in reductions in pension funded status since the assets paid to participants or assumed by insurance companies as part of the risk transfer are typically larger than the corresponding liabilities that are extinguished from the balance sheets. To offset this decrease, many companies engaging in de-risking transactions make additional cash contributions to their pension plans to improve the plan’s funded status.
Pension plan accounting information disclosed in the footnotes of the Milliman 100 companies’ annual reports for the 2025 fiscal year is expected to be available during the first quarter of 2026 and will be published, along with our comprehensive recap, in April as part of the 2026 Milliman PFS.
Highlights
| $ BILLION | FUNDED PERCENTAGE | |||
|---|---|---|---|---|
| MV | PBO | FUNDED STATUS | ||
| November | 1,325 | 1,237 | 88 | 107.1% |
| December | 1,318 | 1,219 | 98 | 108.1% |
| Monthly change | (7) | (18) | +11 | 1.0% |
| YTD Change | +53 | (1) | +54 | 4.5% |
Note: Numbers may not add up precisely due to rounding
Quarter-by-quarter recap
Corporate pensions saw steadily increasing funded ratios during 2025.
- In the first quarter of 2025, discount rates fell 9 bps, to 5.50%, which caused plan liabilities to rise. The market value of PFI plan assets saw minor gains, with year-to-date investment returns of 1.68%. The net result was a drop in the funded ratio from 103.6% to 102.7%, while the funding surplus dropped to $33 billion.
- The second quarter of 2025 saw a funding improvement as plan liabilities declined slightly due to rising discount rates while assets posted robust returns. The funded ratio improved to 105.3% as of June 30, with the funding surplus climbing to $64 billion.
- The funded status surplus increased by another $17 billion during the third quarter as plan asset returns continued to outperform expectations. Discount rates declined during this period by 16 bps, limiting the funded status improvement. The net result was that the funded ratio improved to 106.5% as of September 30.
- The fourth quarter of 2025 saw a similar funding improvement as in the previous two quarters. Discount rates increased by 10 bps, and plan liabilities declined by $18 billion. Meanwhile, assets were flat in the fourth quarter, performing slightly behind expectations. The resulting funding improvement was $18 billion for the quarter. The Milliman 100 PFI funded ratio climbed to 108.1% as of December 31, approximately 4.5% ahead of where it started 12 months earlier.
Figure 1: Milliman 100 Pension Funding Index — Pension surplus/deficit
Figure 2: Milliman 100 Pension Funding Index — Pension funded ratio
2026-2027 projections
If the Milliman 100 PFI companies were to achieve the expected 6.53% asset return (as per the 2025 PFS), and if the current discount rate of 5.46% remains unchanged throughout 2026 and 2027, we forecast that the funded status of the surveyed plans would increase. The pension surplus is projected to be $121 billion (funded ratio of 110.0%) by the end of 2026 and $143 billion (funded ratio of 111.9%) by the end of 2027. For purposes of this forecast, we have assumed 2026 and 2027 aggregate annual contributions of $25 billion.
Under an optimistic forecast with rising interest rates (reaching 6.06% by the end of 2026 and 6.66% by the end of 2027) and annual asset returns of 10.53%, the funded ratio is projected to climb to 122% by the end of 2026 and 137% by the end of 2027. Under a pessimistic forecast with similar interest rate and asset movements (4.86% discount rate at the end of 2026 and 4.26% by the end of 2027 and 2.53% annual asset returns), the funded ratio is projected to decline to 99% by the end of 2026 and 90% by the end of 2027.
Milliman 100 Pension Funding Index - December 2025 (all dollar amounts in millions)
Pension asset and liability returns
About the Milliman 100 monthly Pension Funding Index
For the past 25 years, Milliman has conducted an annual study of the 100 largest defined benefit pension plans sponsored by U.S. public companies. The Milliman 100 Pension Funding Index projects the funded status for pension plans included in our study, reflecting the impact of market returns and interest rate changes on pension funded status, utilizing the actual reported asset values, liabilities, and asset allocations of the companies’ pension plans.
The results of the Milliman 100 Pension Funding Index were based on the actual pension plan accounting information disclosed in the footnotes to the companies’ annual reports for the 2024 fiscal year and for previous fiscal years. This pension plan accounting disclosure information was summarized as part of the Milliman 2025 Pension Funding Study, which was published on April 30, 2025. In addition to providing the financial information on the funded status of U.S. qualified pension plans, the footnotes may also include figures for the companies’ nonqualified and foreign plans, both of which are often unfunded or subject to different funding standards than those for U.S. qualified pension plans. They do not represent the funded status of the companies’ U.S. qualified pension plans under ERISA.