Funded Status of the Largest Public Pension Funds Rises

The funded status of the largest 100 public pension plans of the U.S. increased to 79.4% at the end of May, according to Milliman’s public pension funding index, which tracks the financial health of these plans. The funded level increased from 77.6% at the end of April, helped by strong market returns.

According to the Milliman 100 PPFI report, the 1.8 percentage point increase in funded status of these plans represented a $111 billion rise, although there is a $1.293 trillion shortfall between plan assets and liabilities. Total assets of these plans reached $4.989 trillion, with liabilities reaching $6.282 trillion at the end of May.

From the month prior, liabilities increased from $6.268 trillion at the end of April, and assets increased from $4.864 trillion. Milliman estimates that plans within the PPFI returned between 1.3% and 3.5% during the month. 

By Milliman’s count, out of the 100 plans tracked by the PPFI, 15 have a funded ratio of less than 60%, 62 plans are between 60 % and 90%, and 23 plans are higher than 90%.

Of the 100 plans, only 10 are in a funded surplus; seven of these have a funded status between 100 and 105%, one plan has a level between 115% and 120%, and two plans are between 125% and 130%.

There is a large discrepancy between the funded status of public and corporate pension plans in the U.S. According to Milliman, which also tracks the largest 100 corporate plans, their funded status rose to 103.4% at the end of May.

For public pensions, Milliman projects three scenarios for funded status at the end of May 2025. In a baseline scenario, funded status of these plans could reach 80.9% by then; in an optimistic scenario, 86.2%; and in a pessimistic one, 75.5%, below the current level.