The estimated funded status of the 100 largest U.S. public pension plans has increased for a fifth consecutive month, rising from 83.0% as of July 31, 2025, to 84.2% as of August 31, 2025, as measured by the Milliman 100 Public Pension Funding Index (PPFI).The funded status sits just shy of the prior high-water mark of 85.5%, which was reached on December 31, 2021.
Figure 1: PPFI funded ratio
We have projected the aggregate funded status forward from August 31, 2025, to August 31, 2026, 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 August 2025, the deficit between the estimated PPFI plan assets and liabilities decreased, from $1.122 trillion at the beginning of the month to $1.043 trillion at the end of the month. In aggregate, we estimate the PPFI plans experienced investment returns of 1.6% in August, with individual plans’ estimated returns ranging from 0.8% to 2.3%. The Milliman 100 PPFI asset value increased from $5.477 trillion as of July 31, 2025, to $5.570 trillion as of August 31, 2025. During August, the plans gained market value of approximately $102 billion, which was offset by a net negative cash flow of approximately $9 billion.
Figure 3: PPFI investment returns
The total pension liability (TPL) continues to grow and stood at an estimated $6.613 trillion as of August 31, 2025, up from $6.599 trillion as of July 31, 2025. 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
August’s positive asset performance drove three more plans above the 90% funded mark as of August 31, 2025; now, 41 plans stand above this benchmark compared to 38 as of July 31, 2025. Meanwhile, at the lower end of the spectrum, 11 plans remain less than 60% funded.
Figure 5: Funded ratios at August 31, 2025
About the Public Pension Funding Index
This update is an estimate based on Milliman’s 2024 Public Pension Funding Study and was updated for market returns from June 30, 2024, to August 31, 2025. The 2024 annual study encompasses adjustments made as of June 30, 2024, and reflects updated publicly available asset and liability information gathered for the annual study.