Funded status of largest US corporate pension plans now well over 100% for year-end 2025

Core Insights - The funded status of the largest corporate defined benefit pension plans in the U.S. improved significantly to 104% in 2025, up from 101% in 2024, driven by strong market returns and stable interest rates [1][2][5] Group 1: Funded Status Improvement - The aggregate pension funded status for 349 Fortune 1000 companies reached an estimated 104% at the end of 2025, with pension obligations decreasing from $1.16 trillion in 2024 to approximately $1.11 trillion in 2025 [2][5] - The historical trend shows a steady increase in funded status from 77% in 2008 to 104% in 2025, indicating a positive long-term trajectory for pension plans [4] Group 2: Investment Performance - Pension plan assets remained robust, totaling $1.16 trillion at the end of 2025, with overall investment returns averaging 11% for the year [5] - Domestic large-cap equities saw an 18% increase, while small/mid-cap equities rose by 12%, and long corporate and government bonds gained 8% and 6% respectively [5] Group 3: Challenges and Strategies - Despite the overall improvement, there is a notable divide between well-funded and underfunded plans, with underfunded plans facing challenges in improving their status [6] - Plan sponsors of underfunded plans are advised to monitor potential required contributions and consider a holistic approach that combines investment, funding, and risk transfer strategies for 2026 [6]