The estimated funded status of the 100 largest U.S. public pension plans fell from 81.1% as of February 28, 2025, to 79.5% as of March 31, 2025, as measured by the Milliman 100 Public Pension Funding Index (PPFI). Trade and tariff uncertainty impacted financial markets during March and caused this result.
Figure 1: PPFI funded ratio
We have projected the aggregate funded status forward from March 31, 2025, to March 31, 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 March 2025, the deficit between the estimated plan assets and liabilities increased from $1.233 trillion at the beginning of the month to $1.340 trillion at the end of the month. In aggregate, we estimate the PPFI plans experienced investment returns of -1.6% in March, with individual plans’ estimated returns ranging from -3.1% to -0.1%. The Milliman 100 PPFI asset value decreased from $5.290 trillion as of February 28, 2025, to $5.198 trillion as of March 31, 2025. During March, the plans lost market value of approximately $83 billion, on top of 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 $6.538 trillion as of March 31, 2025, up from $6.523 trillion as of February 28, 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
With March’s market decline, five plans dropped below the 90% funded mark as of March 31, 2025; now 25 plans stand above this benchmark compared to 30 as of February 28, 2025. Meanwhile, at the lower end of the spectrum, one plan fell below 60% funded, bringing the total number of plans under this mark to 12, up from 11 as of February 28, 2025.
Figure 5: Funded ratios at March 31, 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 March 31, 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.