A fourth consecutive month of positive investment returns lifted the estimated funded status of the 100 largest U.S. public pension plans from 82.9% as of June 30, 2025, to 83.0% as of July 31, 2025, as measured by the Milliman 100 Public Pension Funding Index (PPFI).
Figure 1: PPFI funded ratio
We have projected the aggregate funded status forward from July 31, 2025, to July 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 July 2025, the deficit between the estimated PPFI plan assets and liabilities decreased slightly, from $1.127 trillion at the beginning of the month to $1.122 trillion at the end of the month. In aggregate, we estimate the PPFI plans experienced investment returns of 0.5% in July, with individual plans’ estimated returns ranging from -0.2% to 1.2%. The Milliman 100 PPFI asset value increased from $5.457 trillion as of June 30, 2025, to $5.477 trillion as of July 31, 2025. During July, the plans gained market value of approximately $29 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 $6.599 trillion as of July 31, 2025, up from $6.584 trillion as of June 30, 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
July’s slightly positive asset performance pushed one plan above the 90% funded mark as of July 31, 2025; now, 38 plans stand above this benchmark compared to 37 as of June 30, 2025. Meanwhile, at the lower end of the spectrum, 11 plans remain less than 60% funded.
Figure 5: Funded ratios at July 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 July 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.