Multiemployer Pension Funding Surges to Historic High Amid Asset Gains
Event summary
- Milliman's 2025 Multiemployer Pension Funding Study (MPFS) reveals an aggregate funded percentage of 103% as of December 31, 2025.
- This marks the highest funded percentage in the 20-year history of the MPFS, a 50-percentage-point improvement since the 2008 financial crisis.
- Strong asset gains, contributing to a 13.9% portfolio return in 2025, were a primary driver of the funding increase.
- Total contributions to multiemployer plans have exceeded benefit expenses and administrative costs, totaling $331 billion versus $212 billion over the past decade.
- Approximately $75 billion of the $79 billion allocated through the American Rescue Plan Act’s Special Financial Assistance (SFA) program has been distributed.
The big picture
The significant improvement in multiemployer pension funding represents a notable turnaround from the challenges faced during and after the 2008 financial crisis. While asset gains have played a substantial role, proactive measures like increased contributions and benefit adjustments have also contributed. However, the reliance on market performance and the temporary nature of SFA funding highlight ongoing vulnerabilities within the system.
What we're watching
- Asset Volatility
- The reliance on strong asset performance to bolster funding levels leaves multiemployer plans vulnerable to market downturns, potentially reversing recent gains.
- Contribution Sustainability
- The continued ability of plans to maintain or increase contribution rates will be crucial for sustaining the current funded status, given demographic pressures and potential economic headwinds.
- SFA Impact
- The remaining $4 billion of SFA funds will be distributed, but the long-term impact of this temporary boost on plan solvency remains to be seen.
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