The estimated funded status of the 100 largest U.S. public pension plans fell during March from 87.0% as of February 28, 2026, to 83.7% as of March 31, 2026, as measured by the Milliman 100 Public Pension Funding Index (PPFI). The geopolitical shock tied to escalating conflict in the Middle East caused a sizable monthly downturn in investment markets and drove this result. It came on the heels of a new PPFI highwater mark in funded status at the end of February. The PPFI last recorded a negative monthly asset return a year ago, during March 2025.
Figure 1: PPFI funded ratio
We have projected the aggregate funded status forward from March 31, 2026, to March 31, 2027, 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 2026, the deficit between the estimated PPFI plan assets and liabilities increased from $884 billion at the beginning of the month to $1.117 trillion at the end of the month. In aggregate, we estimate the PPFI plans experienced investment returns of -3.5% in March, with individual plans’ estimated returns ranging from -5.2% to -0.5%. The Milliman 100 PPFI asset value decreased from $5.942 trillion as of February 28, 2026, to $5.726 trillion as of March 31, 2026. During March, the plans lost market value of approximately $208 billion, on top of a net negative cash flow of approximately $8 billion.
Figure 3: PPFI investment returns
The total pension liability (TPL) continues to grow and stood at an estimated $6.843 trillion as of March 31, 2026, up from $6.826 trillion as of February 28, 2026. 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
March’s downturn in assets caused eight plans to drop below the 90% funded mark as of March 31, 2026; now 38 plans remain above this benchmark compared to 46 as of February 28, 2026. Meanwhile, at the lower end of the spectrum, the number of plans less than 60% funded was unchanged from February at 11.
Figure 5: Funded ratios at March 31, 2026
About the Public Pension Funding Index
This update is an estimate based on Milliman’s 2025 Public Pension Funding Study and was updated for market returns from June 30, 2025, to March 31, 2026. The 2025 annual study encompasses adjustments made as of June 30, 2025, and reflects updated publicly available asset and liability information gathered for the annual study.