US Pension Plans Set to Increase Contributions in 2025

Approximately 58% of pension funds in the U.S.—including public, corporate and multi-employer plans—reported that their funded status increased in 2024, according to a survey of pension fund professionals commissioned by Ortec Finance.

Approximately 30% of plans reported that their funding status is unchanged, while 12% said their funding status decreased this year.

While funded status is generally increasing, more than two-thirds (68%) of respondents said they will or are likely to increase contributions this year. According to Ortec Finance, of the 68% who said they are planning an increase in contributions, 10% said they will definitely increase contributions, 58% said it is likely they will do so and 22% said it might happen this year.

“When it comes to the long-term health of a pension fund, an improved funded status in one year may not carry over to the long run health of the fund,” said Richard Boyce, Ortec Finance’s managing director for North America, in a statement. “Keeping the door open to increased contributions to sustain the relative value of assets over liabilities is reasonable. There are issues to consider in order to maintain this improvement in their funded status, particularly during periods of volatility, which is why it’s important to keep clear and detailed oversight of both the assets and liabilities of a fund,” Boyce continues.

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Research firm PureProfile surveyed 50 pension fund executives across U.S. public, corporate and Taft-Hartley plans representing $670.4 billion in assets. Ortec and PureProfile conducted the survey in November.

The funded status of corporate pension plans continues to exceed 100%, with many corporate plans in a funding surplus. This has led to an increase in plan sponsors—like Nokia, UPS and Kodak—terminating or outsourcing their plans’ operations, including investments, or sending the liabilities to an insurance company.

Public plans, while seeing an increase in funded status, are more generally underfunded than their corporate defined benefit plan counterparts.

According to Milliman’s Public Pension Funding Index for November, U.S. public defined benefit plans saw their funded status decrease to 81.2% at the end of October, from 82.8% in September. According to Milliman, which also tracks the funded status of corporate plans, the funded status of these plans increased to 103.5% at the end of November, up from 103.2% at the end of October.