US Public Pension Funded Ratio Falls to 87.4% in September as a 1.4% Loss Widens the Deficit by $112 Billion to $877 Billion

The funded ratio of the 100 largest US public pension plans fell to 87.4% at 30 September 2026 from 89.0% at the end of August, as the plans' investments lost 1.4% in the month. The deficit, which is liabilities less assets, widened by $112 billion to $877 billion from $765 billion. For a GP raising from pension funds, the month is a reminder that funding levels move with markets and that the plans are also paying out more than they take in.

The figures

Total assets fell to $6.067 trillion from $6.162 trillion, a drop of about $95 billion. Market losses accounted for about $87 billion of that and net negative cash flow for about $8 billion. Total pension liabilities rose to $6.944 trillion from $6.927 trillion, an increase of about $17 billion. The $95 billion fall in assets plus the $17 billion rise in liabilities gives the $112 billion widening in the deficit, which is our own arithmetic from the published totals. Plan returns for the month ran from -3.4% to -0.5%, so no plan finished September with a gain.

By plan count

Across the 100 plans, 47 were at least 90% funded at the end of September, down from 51 in August. In percentage terms that is 47% of plans against 51%. The middle band, plans between 60% and 90% funded, held 42 plans, up from 39, and 11 plans were below 60% funded, up from 10. By count that is 42% and 11%, against 39% and 10% a month earlier. The split of the $6.067 trillion by funding band was not given, so we cannot state these shares by capital. The funded ratio itself fell 1.6 percentage points in a single month.

What it means for GPs

This section is our reading, not a statement from the plans. Net negative cash flow means a plan's contributions no longer cover its benefit payments, so it has to find cash from its portfolio each month. That is why a manager's record of returning capital through DPI matters more to such a plan than a headline return, a point we take up in our playbook for pitching a pension that needs distributions. The figures measure funding, not allocation, so nothing here says plans are cutting private markets. Our earlier coverage found that US public pensions committed $100.9 billion to private equity in 2025, and a one-month dip does not change that picture by itself.

Watch the October reading for whether the ratio recovers or the count of plans above 90% falls again. FundLinx members can see which pensions are allocating in your strategy, including plans by US region and state.

FundLinx Intelligence | FundLinx.ai