The funded status of the 100 largest U.S. corporate defined benefit pension plans fell by $7 billion during March, as measured by the Milliman 100 Pension Funding Index (PFI). After negative investment returns during the month, the funded status surplus declined from $58 billion at the end of February to $51 billion as of March 31. Meanwhile, plan liabilities decreased due to a small rise in the benchmark corporate bond interest rates used to value pension liabilities, although this was not enough to offset the decline in plan assets. As of March 31, the PFI funded ratio dropped to 104.1%, from 104.6% at the end of February. March’s decline concludes a down first quarter of 2025 that saw a net $8 billion drop in funded status.
The Milliman 100 PFI asset value fell by $25 billion in March, to $1.301 trillion, driven by poor investment returns of -1.38%. By comparison, the 2024 Milliman Pension Funding Study reported that the monthly expected investment return during 2023 was 0.52% (6.4% annualized). The full results of the annual 2024 study can be found at 2024 Milliman Pension Funding Study. Later in April, Milliman will publish its 2025 Pension Funding Study capturing plan information for fiscal years ending in 2024.
The PFI projected benefit obligation, or pension liabilities, decreased by $18 billion during March to $1.250 trillion as of March 31. The change resulted from an increase of 13 basis points in the monthly discount rate, to 5.49% for March from 5.36% for February.
Highlights
| $ BILLION | FUNDED PERCENTAGE | |||
|---|---|---|---|---|
| MV | PBO | FUNDED STATUS | ||
| February | 1,326 | 1,268 | 58 | 104.6% |
| March | 1,301 | 1,250 | 51 | 104.1% |
| Monthly change | (25) | (18) | (7) | -0.5% |
| YTD Change | +2 | +10 | (8) | -0.7% |
Note: Numbers may not add up precisely due to rounding
First quarter 2025 summary
For the quarter ending March 31, 2025, PFI plan assets grew by $2 billion while liabilities increased by $10 billion. While investments posted returns of 1.68% during the period, discount rates fell by 10 basis points, resulting in the $8 billion funded status decline. The funded ratio of the Milliman 100 companies worsened to 104.1% at the end of March from 104.8% at the beginning of 2025.
Over the last 12 months (April 2024 to March 2025), the cumulative asset return for these pensions was 4.38% and the Milliman 100 PFI funded status surplus grew by $23 billion. Rising discount rates primarily drove the improvement in the funding ratio, which rose from 102.2% to 104.1% over the 12-month period.
The projected asset and liability figures presented in this analysis will be adjusted as part of Milliman’s 2025 PFS, which will summarize and report on the most recent plan sponsor financials filed with the U.S. Securities and Exchange Commission. The 2025 PFS will also reflect reported pension settlement and annuity purchase activities that occurred during 2024. De-risking transactions generally result in reductions in pension funded status since the assets paid to the participants or assumed by the insurance companies as part of the risk transfer are 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.
Figure 1: Milliman 100 Pension Funding Index — Pension surplus/deficit
Figure 2: Milliman 100 Pension Funding Index — Pension funded ratio
2025-2026 projections
If the Milliman 100 PFI companies were to achieve the expected 6.4% median asset return (as per the 2024 PFS), and if the current discount rate of 5.49% remains unchanged throughout 2025 and 2026, we forecast that the funded status of the surveyed plans would increase. The pension surplus is projected to be $60 billion (funded ratio of 104.8%) by the end of 2025 and $72 billion (funded ratio of 105.8%) by the end of 2026. For purposes of this forecast, we have assumed 2025 and 2026 aggregate annual contributions of $25 billion.
Under an optimistic forecast with rising interest rates (reaching 5.94% by the end of 2025 and 6.54% by the end of 2026) and annual asset returns of 10.4%, the funded ratio is projected to climb to 113% by the end of 2025 and 126% by the end of 2026. Under a pessimistic forecast with similar interest rate and asset movements (5.04% discount rate at the end of 2025 and 4.44% by the end of 2026 and 2.4% annual asset returns), the funded ratio is projected to decline to 97% by the end of 2025 and 88% by the end of 2026.
Milliman 100 Pension Funding Index - April 2025 (all dollar amounts in millions)
Pension asset and liability returns
About the Milliman 100 monthly Pension Funding Index
For the past 24 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 2023 fiscal year and for previous fiscal years. This pension plan accounting disclosure information was summarized as part of the Milliman 2024 Pension Funding Study, which was published on April 23, 2024. 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.