Multiemployer Pensions Hit Record 106% Funded at Midyear 2026

The aggregate funded ratio for U.S. multiemployer pension plans reached 106% as of June 30, 2026, up from 103% at year-end 2025. That is the highest level recorded in the 19-year history of Milliman's Multiemployer Pension Funding Study, and the aggregate surplus grew to approximately $55 billion (Milliman, August 2026).

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. Strip it out and Milliman estimates the system would sit closer to 97% funded.

Key Takeaways

• Multiemployer plans hit a record 106% aggregate funded ratio at June 30, 2026, with a $55 billion surplus, up from 103% at year-end 2025.
• Roughly $78 billion in ARPA Special Financial Assistance across 161 plans added about nine percentage points; excluding it, the system sits near 97% funded.
• 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 remains far below the headline.
• SFA-funded and organically funded plans report similar ratios but are not the same credit: segregated SFA assets carry federal spending and investment restrictions that organic surplus does not.
• Withdrawal liability is compressing as funded status rises, but the Supreme Court's May 21, 2026 M&K ruling lets plan actuaries update assumptions after the measurement date, a timing variable exiting employers cannot control.

The Midyear Numbers

Milliman's Multiemployer Pension Funding Study is an interim update to its annual analysis of the funded status of all U.S. multiemployer defined benefit plans. It draws assumptions and asset and liability data from the latest Form 5500 filings for the 1,176 plans in the study universe. The midyear 2026 edition was authored by Tim Connor, Rex Barker, Timothy Herman, and Nina Lantz.

Returns and Cash Flow

The study reported an estimated 5.6% return for the six-month period on Milliman's simplified portfolio benchmark. That benchmark blends:

• 40% public equity
• 28% investment-grade debt
• 9% real assets
• 9% other alternatives
• 8% private equity
• 4% high-yield debt
• 2% cash

Reported contributions across all plans totaled $37 billion against $25 billion in benefit payments and administrative expenses (Milliman, August 2026). That $12 billion annual surplus flow keeps compounding on top of investment gains.

"Multiemployer plans continue to benefit from strong investment markets and contribution levels that outpace plan costs," said Tim Connor, MPFS co-author (Milliman, August 2026).

The Discount-Rate Caveat

The study's liability side uses each plan's own assumed return on assets as the discount rate. Milliman reports that assumption ranges from 6% to 8% across the universe, 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 one reason multiemployer funded ratios have historically run higher than a mark-to-market comparison would show.

The Zone-Status Distribution

The plan-level distribution underneath the aggregate number is lopsided. Of the 1,176 plans in the study, 872, or 74%, are certified in the IRS green zone, defined by the Internal Revenue Code as plans that are not endangered or critical. That green-zone cohort carries an aggregate funded ratio of roughly 111%.

The remaining plans pull the blended average down to 106%. Under IRC Section 432(b) they spread across:

• Yellow: endangered, 65% to 80% funded
• Orange: seriously endangered
• Red: critical, below 65% funded

A plan-count average and an asset-weighted average tell different stories here. The largest, best-funded plans dominate the surplus dollars, while a long tail of smaller, distressed plans remains far below the headline figure.

What SFA Actually Did to the Balance Sheet

A One-Time Infusion, Not a Loan

The Special Financial Assistance program, created by the American Rescue Plan Act of 2021 and administered by the PBGC, is a one-time cash infusion, not a loan. It went to financially troubled multiemployer plans that met specific insolvency-risk criteria.

As of the PBGC's most recent published tally, 196 SFA applications from 161 plans, covering 1.8 million participants, had been approved, totaling approximately $77.9 billion (PBGC, 2026). Milliman's midyear study credits the program with adding nine percentage points to the aggregate funded ratio since its inception. That is the arithmetic gap between the reported 106% and the roughly 97% the system would show on an SFA-excluded basis.

Segregated Assets, Restricted Spending

The mechanism matters for how that number should be read. SFA funds are held in a segregated account and invested conservatively, generally in investment-grade fixed income. They sit separate from a plan's other assets, which are typically invested more aggressively across the return-seeking allocation Milliman uses in its simplified portfolio.

A plan that received SFA therefore reports a blended funded ratio: a low-volatility segregated pool averaged against a market-sensitive legacy pool. The SFA 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 employer contribution rates.

That restriction is a structural difference from organic surplus. Trustees can direct organic surplus toward benefit restoration, contribution stabilization, or additional risk-taking without a federal spending constraint attached.

The PBGC Backstop

Before ARPA, the PBGC's multiemployer insurance program itself was projected to run out of money by 2026 (PBGC, prior projections). The SFA program is credited with extending the program's projected solvency well beyond the original projection period. That removed the near-term insolvency scenario that had driven years of PBGC premium increases and legislative negotiation.

That program-level rescue is the backdrop for the plan-level 106%. The aggregate number is real, but a meaningful share of it is federal money sitting in a segregated account, not return generated by the plan's own investment strategy or an improved contribution base.

Two Balance-Sheet Routes to the Same Ratio

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

A plan that reached its funded position through ARPA rescue money and a plan that reached the same ratio through a decade of contribution discipline and favorable markets are not the same credit. The SFA plan was, by statutory definition, in critical and declining status or already insolvent before the assistance. Its improved ratio reflects a federal backstop layered on a legacy benefit structure that had already been trending toward failure.

The organically funded plan never needed the backstop, and its trustees retain full discretion over how to deploy the surplus. Milliman's study groups both into the same 106% headline. A plan actuary certifying zone status, or a contributing employer's finance team evaluating withdrawal exposure, needs to know which route a given plan took before drawing conclusions from the aggregate number.

Glidepath Flexibility

The split also shapes investment glidepath decisions. A trustee board overseeing an organically surplus plan can consider de-risking the legacy portfolio toward the SFA account's conservative posture, locking in the gain the way a corporate DB sponsor might reduce equity exposure after a funded-status improvement.

A board overseeing an SFA-recipient plan has less room to maneuver. PBGC's SFA rules constrain how those specific dollars are invested, and the plan's non-SFA assets may still carry legacy return targets set when the plan was in far worse shape. Funded-ratio convergence at the aggregate level masks a divergence in actual investment policy flexibility at the plan level.

The PBGC Premium Angle

Premium exposure adds a further wrinkle that distinguishes multiemployer plans from their single-employer counterparts even at similar funded levels. Multiemployer plans pay a flat-rate premium per participant to PBGC, a rate this site has previously noted runs at roughly a third of the single-employer flat rate. They also carry no variable-rate premium tied to underfunding the way single-employer plans do.

That structural difference means the PBGC-premium arithmetic pushing well-funded corporate sponsors toward pension risk transfer, where premium drag on a surplus plan can itself justify de-risking, does not translate directly to the multiemployer system. A multiemployer trustee board sitting on surplus has less premium-cost incentive to shrink the plan than a corporate sponsor does. That is one reason benefit restoration and contribution relief, rather than plan termination or risk transfer, are the live policy questions on the multiemployer side of the ledger.

What a Surplus Reopens

Zone-status rules under the Pension Protection Act and its multiemployer amendments were built for scarcity. A plan in critical status faces mandatory benefit reductions and contribution-increase schedules under a rehabilitation plan. A plan in endangered status operates under a funding improvement plan with its own restrictions. Those rules did not anticipate a system-wide surplus.

A green-zone plan at 111% funded, the aggregate level Milliman reports for that cohort, has statutory room that a critical-status plan does not. Trustees can consider three paths, each with real tradeoffs:

• Benefit restoration for cuts made during the plan's earlier distress. It raises the plan's liability and reduces the funded cushion, but it addresses participant equity concerns that built up during the difficult years.
• Contribution stabilization or reduction for participating employers. It improves employer competitiveness and can reduce withdrawal pressure, but it slows the pace at which the plan builds additional buffer against a market downturn or adverse demographic experience.
• Additional funding buffer, with no change to benefits or contributions. It is the most conservative path, but it does nothing for participants or employers who bore the cost of the plan's earlier underfunding.

The choice among those options is itself an actuarial question. Green-zone trustees making this call now, with a 111% cohort average behind them, face a genuinely different governance problem than the survival-mode decisions that dominated multiemployer plan administration for most of the 2010s and early 2020s.

The Withdrawal-Liability Math Is Moving Too

Withdrawal liability, the share of a plan's unfunded vested benefits that a departing employer must pay under ERISA Section 4211, moves inversely with funded status. As the plan's unfunded vested benefit pool shrinks, so does the assessment facing an employer that wants to exit.

A system moving from 103% to 106% aggregate funding, with green-zone pockets closer to 111%, is by definition compressing the base that drives that calculation. The exception is plans carrying legacy SFA-related liabilities that some withdrawal-liability formulas treat separately.

The M&K Ruling on Assumption Timing

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, LLC v. Trustees of the IAM National Pension Fund that ERISA does not require a multiemployer plan to freeze its actuarial assumptions as of the measurement date when calculating an employer's withdrawal liability.

Justice Jackson's opinion held that Sections 4211 and 4213 of ERISA impose no deadline for selecting the assumptions used in the calculation. Plans retain flexibility to update assumptions between the measurement date and the date a withdrawal liability bill is issued.

Combined with rising funded status, the ruling cuts two ways for an employer weighing an exit. A higher funded ratio pushes the unfunded vested benefit base down. But the plan actuary's discretion over which assumption set to apply, and when to lock it in, adds a timing variable that a departing employer cannot fully control. A trustee board sitting on a fresh surplus has both the funding cushion and, after M&K, the assumption-setting latitude to shape what an exiting employer actually owes.

For contributing employers, the practical read is that the math has gotten more favorable on the funded-status axis and less predictable on the assumption-timing axis. An employer modeling an exit in 2026 needs a current actuarial estimate, not a stale one built off year-end 2025 or earlier data. It also needs to account for the possibility that the plan's actuary revises assumptions between the employer's decision date and the formal assessment.

The SFA Guardrail on Exits

The direction of that compression also varies by plan type in a way the aggregate 106% obscures. An SFA-recipient plan's withdrawal liability formula generally must account for the segregated SFA assets and the restrictions attached to them. 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, a guardrail meant 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. Its improved funded ratio flows straight into a lower unfunded vested benefit base and a correspondingly smaller withdrawal bill. Two employers weighing exits from plans that both report funded ratios near 106% can therefore face materially different exposure, depending on which route their plan took to get there. It is another instance of the SFA-versus-organic distinction that runs through this study's headline number.

How Multiemployer Compares With Corporate and Public Plans

The 106% multiemployer figure lands in the middle of a wider divergence across U.S. defined benefit systems, one of the more visible cross-sector patterns of 2026.

System	Funded ratio, mid-2026	Primary driver
Multiemployer aggregate (Milliman MPFS)	106%	Markets and contributions, plus roughly nine points from one-time ARPA SFA
Corporate Milliman 100 (Pension Funding Index)	109.5%	Higher discount rates shrinking liabilities plus equity returns
Public plans (aggregate)	~80% range	Constrained by discount methodology and contribution shortfalls

Corporate single-employer plans, tracked in Milliman's separate Pension Funding Index, closed at a 109.5% funded ratio for the Milliman 100 as of June 30, 2026. This site has covered that level in the context of record PBGC premium pressure pushing sponsors toward pension risk transfer. Public pension plans sit well below both: aggregate public-plan funded status has run in the 80% range through 2026 market volatility, a gap of roughly 25 to 30 percentage points versus the corporate and multiemployer systems.

What separates multiemployer plans from both is the mechanism behind the number, not just its level:

• Corporate plan improvement came almost entirely from market-driven forces, higher discount rates shrinking liabilities and equity returns growing assets, with sponsors making few large discretionary contributions along the way.
• Public plan funded status remains constrained by discount rate methodology, chronic contribution shortfalls relative to actuarially determined amounts, and, in many states, statutory limits on how quickly funding policy can change.
• Multiemployer plans owe roughly nine of their 106 percentage points to a specific, one-time federal appropriation that will not repeat and that comes with its own spending restrictions.

None of the three systems is comparable to the others on a like-for-like basis. Treating "106% funded" as equivalent to "109.5% funded" at a corporate plan, or as simply better than an 80%-funded public plan, skips the balance-sheet mechanics that actually determine how much risk each system can absorb in the next downturn.