February 2025 saw asset growth match the growth in plan liabilities, resulting in no change in the estimated funded status of the 100 largest U.S. public pension plans from January 31, 2025, as measured by the Milliman 100 Public Pension Funding Index (PPFI). The funded ratio remained at 81.1% as of February 28, 2025, hovering just shy of its highest level in the past three years.
Figure 1: PPFI funded ratio
We have projected the aggregate funded status forward from February 28, 2025, to February 28, 2026, under three scenarios. The baseline scenario assumes each plan’s future investment returns equal that plan’s current reported interest rate assumption (median rate = 7.0% in this study). The “optimistic” and “pessimistic” scenarios assume each plan’s investment returns are 7% higher and lower, respectively, than that plan’s current reported interest rate assumption.
Figure 2: PPFI funded ratio with projections
During February 2025, the deficit between the estimated plan assets and liabilities increased slightly, from $1.227 trillion at the beginning of the month to $1.233 trillion at the end of the month. In aggregate, we estimate the PPFI plans experienced investment returns of 0.3% in February, with individual plans’ estimated returns ranging from -0.3% to 2.1%. The Milliman 100 PPFI asset value increased from $5.281 trillion as of January 31, 2025, to $5.290 trillion as of February 28, 2025. During February, the plans gained market value of approximately $18 billion, which was offset by a net negative cash flow of approximately $9 billion.
Figure 3: PPFI investment returns
The total pension liability (TPL) continues to grow and stood at an estimated $6.523 trillion as of February 28, 2025, up from $6.508 trillion as of January 31, 2025. Just as pension assets grow over time with investment income and shrink over time as benefits are paid, so too does the TPL grow over time with interest and shrink as benefits are paid. The TPL also grows as active members accrue pension benefits.
Figure 4: PPFI funded status
February’s subdued asset return saw one plan drop below the 90% funded mark as of February 28, 2025; now 30 plans stand above this benchmark compared to 31 as of January 31, 2025. Meanwhile, at the lower end of the spectrum, 11 plans remain less than 60% funded.
Figure 5: Funded ratios at February 28, 2025
About the Public Pension Funding Index
This update is an estimate based on Milliman’s 2024 Public Pension Funding Study and was updated for market returns from June 30, 2024, to February 28, 2025. The 2024 annual study encompasses adjustments made as of June 30, 2024, and reflects updated publicly available asset and liability information gathered for the annual study.