Public Pension Funded Ratio Dips to 88.7% as Investment Returns Cool
Event summary
- Milliman's Public Pension Funding Index (PPFI) shows a funded ratio decline to 88.7% as of June 30, 2026, down from 89.1% in May.
- The 100 largest public pension plans saw a -0.1% return in June, reducing asset value by $13 billion to $6.116 trillion.
- Liabilities rose to $6.894 trillion, despite a strong 6.2% year-to-date return through June 30.
- Half of the largest public pensions remain over 90% funded, while only 10 plans are under 60% funded.
The big picture
Public pension plans have enjoyed strong returns in early 2026, but June's dip highlights the fragility of funded statuses amid market fluctuations. The overall health of these plans remains robust, with most above 90% funded, yet sustained negative returns could pressure governance and funding strategies. Milliman’s data underscores the need for resilient investment approaches in an unpredictable economic environment.
What we're watching
- Market Volatility
- How June's negative returns will affect long-term pension funding stability amid broader economic uncertainty.
- Funding Sustainability
- Whether the 6.2% year-to-date return can offset future liability growth and maintain current funded ratios.
- Regulatory Scrutiny
- The pace at which declining funded ratios may trigger policy responses or funding reforms.