Investment market losses during September 2026 lowered the estimated funded status of the 100 largest U.S. public pension plans from 89.0% as of August 31, 2026, to 87.4% as of September 30, 2026, 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 September 30, 2026, to September 30, 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 over the next year are 7% higher and lower, respectively, than that plan’s current reported interest rate assumption.
Figure 2: PPFI funded ratio with projections
During September 2026, the deficit between the estimated plan assets and liabilities increased from $765 billion at the beginning of the month to $877 billion at the end of the month. In aggregate, we estimate the PPFI plans experienced investment returns of -1.4% in September, with individual plans’ estimated returns ranging from -3.4% to -0.5%. The Milliman 100 PPFI asset value decreased from $6.162 trillion as of August 31, 2026, to $6.067 trillion as of September 30, 2026. During September, the plans lost market value of approximately $87 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 $6.944 trillion as of September 30, 2026, up from $6.927 trillion as of August 31, 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
After September’s negative return, four plans dropped below the 90% funded mark as of September 30, 2026; now 47 plans stand above this benchmark compared to 51 as of August 31, 2026. Meanwhile, at the lower end of the spectrum, one additional plan fell below 60% funded in September, bringing the total number of plans under this mark to 11, up from 10 as of August 31, 2026.
Figure 5: Funded ratios at September 30, 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 September 30, 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.