The funded status of the 100 largest corporate defined benefit pension plans fell by $13 billion during February, as measured by the Milliman 100 Pension Funding Index (PFI). The funded ratio dropped from 106.0% at the end of January to 104.8% at the end of February. A decrease in the benchmark corporate bond interest rates resulted in an increase in pension liabilities. Pension assets also increased due to strong investment returns, but not enough to offset the liability increase. The funded ratio at the end of February matches the ratio seen at the start of 2025.
The market value of assets increased by $18 billion as a result of January’s 1.90% investment return. The Milliman 100 PFI asset value rose to $1.329 trillion as of February 28, 2025. The monthly expected investment return during 2024 was 0.52% (6.4% annualized) as reported in our 2024 Milliman Pension Funding Study (PFS).
The Milliman 100 PFI projected benefit obligation (PBO) increased to $1.268 trillion, up $31 billion during February. The change resulted from a 24 basis-point decrease in the monthly discount rate, to 5.36% for February from 5.60% in January.
Highlights
| $ BILLION | FUNDED PERCENTAGE | |||
|---|---|---|---|---|
| MV | PBO | FUNDED STATUS | ||
| January | 1,310 | 1,237 | 74 | 106.0% |
| February | 1,329 | 1,268 | 61 | 104.8% |
| Monthly change | +18 | +31 | (13) | -1.2% |
| YTD Change | +30 | +28 | +2 | 0.0% |
Note: Numbers may not add up precisely due to rounding
Over the last 12 months (March 2024 to February 2025), the cumulative asset return for these pension plans has been 7.95%, and the Milliman 100 PFI funded status surplus has improved by $34 billion. The funded status growth was primarily driven by strong investment performance. The funded ratio of the Milliman 100 companies has improved over the past 12 months, to 104.8% from 102.1%.
The projected asset and liability figures presented in this analysis will be adjusted as part of Milliman’s annual 2025 PFS including summarizing and reporting the most recent plan sponsor SEC financials. 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. We expect to publish our comprehensive recap in April.
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 5.36% 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 $72 billion (funded ratio of 105.7%) by the end of 2025 and $86 billion (funded ratio of 106.9%) 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 5.86% by the end of 2025 and 6.46% by the end of 2026) and annual asset returns of 10.4%, the funded ratio is projected to climb to 115% by the end of 2025 and 129% by the end of 2026. Under a pessimistic forecast with similar interest rate and asset movements (4.86% discount rate at the end of 2025 and 4.26% 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 - March 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.