Multiemployer Pensions Hit Record 106% Funded at Midyear 2026

The aggregate funded ratio for US multiemployer pension plans reached 106% as of June 30, 2026, up from 103% at year-end 2025. That is the highest level in the 19-year history of Milliman's Multiemployer Pension Funding Study, and the aggregate surplus grew to approximately $55 billion. Markets did not build most of that cushion. Roughly $78 billion in American Rescue Plan Act Special Financial Assistance, paid to 161 plans, did the structural work.

Key Takeaways

• Strip out the federal money and the system sits near 97% funded. SFA added about nine percentage points to the aggregate ratio since inception, which is the gap between the reported 106% and an SFA-excluded basis.
• 872 of 1,176 plans, or 74%, are green zone, and that cohort is roughly 111% funded, while a long tail of smaller distressed plans sits far below the headline.
• $37 billion of contributions against $25 billion of benefit payments and expenses leaves a $12 billion annual surplus flow compounding on top of investment gains.
• The Supreme Court's May 21, 2026 M&K ruling lets plan actuaries update assumptions after the measurement date, adding a timing variable an exiting employer cannot control.

The Midyear Numbers

Milliman's study draws data from the latest Form 5500 filings for the 1,176 plans in its universe. It reported an estimated 5.6% return for the six-month period on a simplified benchmark led by 40% public equity and 28% investment-grade debt.

"Multiemployer plans continue to benefit from strong investment markets and contribution levels that outpace plan costs," said co-author Tim Connor. That contribution surplus is doing steady work: $37 billion in against $25 billion out.

One caveat sits underneath the liability side. The study discounts using each plan's own assumed return on assets, ranging from 6% to 8% with a 6.8% weighted average. That is a materially higher discount rate than the market-based approach corporate plans use under ASC 715, and it is one reason multiemployer funded ratios have historically run above what a mark-to-market comparison would show.

The plan-level distribution is lopsided. Of 1,176 plans, 872 are certified green zone and that cohort carries an aggregate ratio near 111%; the rest pull the blended average down to 106%. A plan-count average and an asset-weighted average tell different stories, because the largest, best-funded plans dominate the surplus dollars while a long tail of smaller distressed plans stays well below the headline.

Two Balance-Sheet Routes to the Same Ratio

The Special Financial Assistance program is a one-time cash infusion, not a loan. As of the PBGC's most recent tally, 196 applications from 161 plans covering 1.8 million participants had been approved, totaling approximately $77.9 billion.

Characteristic	SFA-Funded Plan	Organically Funded Plan
Source of surplus	Federal SFA cash injection (one-time)	Investment returns + contribution excess over cost
Asset structure	Segregated SFA account (conservative) plus legacy assets	Single commingled portfolio, actively managed
Spending restriction	SFA funds limited to benefits and admin costs	Trustee discretion within plan document and IRC limits
Prior zone status	Critical and declining, or insolvent	Typically green or yellow zone historically
Risk tolerance implication	Constrained by conservative SFA asset rules	Trustees can reset glidepath, contribution, or benefit policy

The mechanism matters for how the ratio should be read. SFA funds are held in a segregated account and invested conservatively, generally in investment-grade fixed income, separate from a plan's other assets invested more aggressively across the return-seeking allocation. A recipient plan therefore reports a blended ratio: a low-volatility segregated pool averaged against a market-sensitive legacy pool.

The regulations also restrict how those segregated assets can be spent, generally limiting them to paying benefits and administrative expenses rather than funding benefit improvements or reducing contribution rates. That is a structural difference from organic surplus, which trustees can direct toward benefit restoration, contribution stabilization, or additional risk-taking with no federal constraint attached.

A plan that reached its position through rescue money and one that reached the same ratio through a decade of contribution discipline are not the same credit. The SFA plan was, by statutory definition, in critical and declining status or already insolvent beforehand, so its improved ratio reflects a federal backstop layered on a benefit structure that had been trending toward failure. Milliman groups both into the same 106% headline.

The split also shapes glidepath decisions. A board overseeing an organically surplus plan can de-risk the legacy portfolio toward the SFA account's conservative posture, locking in the gain the way a corporate sponsor might after a funded-status improvement. An SFA recipient has less room: PBGC rules constrain how those dollars are invested, and the non-SFA assets may still carry return targets set when the plan was in far worse shape. Convergence at the aggregate level sits on top of a divergence in actual investment policy flexibility.

Premium structure removes one pressure that drives corporate de-risking. Multiemployer plans pay a flat-rate premium per participant running at roughly a third of the single-employer flat rate, with no variable-rate premium tied to underfunding. A trustee board sitting on surplus therefore has less premium-cost incentive to shrink the plan than a corporate sponsor does, which is why benefit restoration and contribution relief, rather than termination or risk transfer, are the live questions here.

The Withdrawal-Liability Math Is Moving Too

Withdrawal liability, the share of unfunded vested benefits a departing employer must pay under ERISA Section 4211, moves inversely with funded status. A system moving from 103% to 106%, with green-zone pockets near 111%, is by definition compressing the base that drives that calculation.

That compression lands against a legal backdrop the industry is still digesting. On May 21, 2026 the Supreme Court ruled unanimously in M&K Employee Solutions v. Trustees of the IAM National Pension Fund that ERISA does not require a plan to freeze its actuarial assumptions as of the measurement date. Justice Jackson's opinion held that Sections 4211 and 4213 impose no deadline for selecting the assumptions used, so plans retain flexibility to update between the measurement date and the date a bill is issued.

Combined with rising funded status, the ruling cuts two ways. A higher ratio pushes the unfunded vested benefit base down, but the actuary's discretion over which assumption set applies, and when to lock it in, adds a timing variable the employer cannot control.

A trustee board sitting on fresh surplus has both the funding cushion and, after M&K, the latitude to shape what an exiting employer owes. The math has become more favorable on the funded-status axis and less predictable on the assumption-timing axis.

The direction of that compression also varies by plan type in a way the aggregate 106% does not show. An SFA recipient's formula generally must account for the segregated assets and their restrictions, because PBGC's implementing regulations require that SFA money not reduce an employer's calculated withdrawal liability below what it would have been absent the assistance. That guardrail exists to keep the federal rescue from becoming a backdoor subsidy for employers looking to exit cheaply.

An organically funded green-zone plan carries no such restriction, so its improved ratio flows straight into a lower unfunded vested benefit base and a smaller bill. Two employers weighing exits from plans both reporting ratios near 106% can face materially different exposure depending on which route their plan took, which is the same distinction running underneath the headline number in every other direction it is read.