By: Russ Kamp, CEO, Ryan ALM, Inc.
Milliman has released the latest results of its monthly Public Pension Funding Index (PPFI). As a reminder, Milliman analyzes data from the nation’s 100 largest public defined benefit plans to create this index.
March proved challenging for public pension plans as the PPFI plans’ funded ratio fell from 87.0% as of February 28 to 83.7% as of March 31. The start of the conflict in the Middle East (2/28/26) and the potential spike in inflation as a result, drove equity markets down resulting in a roughly $208 billion loss in assets for the members of the PPFI index. Collectively, the 100 public plans recorded an estimated return of -3.5% for March, representing the first monthly decline since March 2025. At the end of March the PPFI plan assets stood at $5.7 trillion, while pension liabilities had increased to $6.8 trillion.
Ryan Falls, co-author of the Milliman PPFI noted that “the March market downturn caused eight plans to slip below the 90% funded mark, leaving 38 of the 100 plans above this key benchmark.” He also said that “while this is a significant change from February, the number of plans less than 60% funded was stable at 11, underscoring the overall health of public pensions.”
Again, pension accounting under GASB allows for the use of the ROA as the discount rate. This stable rate, as opposed to the AA corporate rate used under FASB can mask interest rate trends and the impact of shifting rates on pension liabilities. Rates rose on average in March, which would have reduced the present value of those liabilities and supported the funded ratio. Please click on the link below to see the complete funding index report.
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