S&P 1500 Pension Funded Status Decreased by Three Percent in February
The estimated aggregate funding level of pension plans sponsored by S&P 1500 companies decreased by three percent in February 2026 to 107 percent as a result of a decrease in discount rates. As of February 28, 2026, the estimated aggregate surplus of $111 billion USD decreased by $36 billion USD compared to a surplus of $147 billion USD measured at the end of January, according to Mercer1, a business of Marsh.
The S&P 500 index decreased 0.87% percent and the MSCI EAFE index increased 4.50% percent in January. Typical discount rates for pension plans, as measured by the Mercer Yield Curve, decreased from 5.49 percent to 5.33 percent.
“Pension funded status for the S&P 1500 fell 3% in February as interest rates and domestic equities both decreased,” said Matt McDaniel, a Partner in Mercer’s Wealth Practice. “The pullback in domestic equities coincided with inflation reports, indicating continued increases above the Federal Reserve’s target of 2%.”
“February served as a reminder of how sensitive pension funded status is to market movements, with the dual impact of falling rates and U.S. equities. Foreign conflicts escalating may also lead to heightened market volatility, which could further strain pension funded status. To effectively manage ongoing volatility, de-risking strategies are crucial for plan sponsors,” McDaniel added.
Mercer estimates the aggregate funded status position of plans sponsored by S&P 1500 companies on a monthly basis. Figure 1 (below) shows the estimated aggregate surplus/(deficit) position and the funded status of all plans sponsored by companies in the S&P 1500. The estimates are based on each company’s latest available year-end statement2 and by projections to February 28, 2026, in line with financial indices. The estimates include U.S. domestic qualified and non-qualified plans, along with all non-domestic plans. The estimated aggregate value of pension plan assets of the S&P 1500 companies as of January 31, 2026, was $1.67 trillion USD, compared with estimated aggregate liabilities of $1.52 trillion USD. Allowing for changes in financial markets through February 28, 2026, changes to the S&P 1500 constituents, and newly released financial disclosures at the end of January, the estimated aggregate assets were $1.68 trillion USD, compared with the estimated aggregate liabilities of $1.57 trillion USD. Figure 2 shows the discount rates used in Mercer’s pension funding calculation.
Notes for editors
Information on the Mercer Yield Curve is available at Pension Discount Yield Curve and Index Rates in US.
The Mercer US Pension Buyout Index may be accessed at Mercer US pension buyout index.
Unless otherwise stated, the calculations are based on the Financial Accounting Standard (FAS) funding position and include analysis of the S&P 1500 companies.
1 Figures provided by Mercer Investments LLC.
2 Source of financial statement data: Standard & Poor’s Capital IQ. Standard and Poor’s is a division of The McGraw-Hill Companies, Inc. This may contain information obtained from third parties, including ratings from credit ratings agencies such as Standard & Poor’s. Reproduction and distribution of third party content in any form is prohibited except with the prior written permission of the related third party. Third party content providers do not guarantee the accuracy, completeness, timeliness or availability of any information, including ratings, and are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or for the results obtained from the use of such content. THIRD PARTY CONTENT PROVIDERS GIVE NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. THIRD PARTY CONTENT PROVIDERS shall not be liable for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including lost income or profits and opportunity costs) in connection with any use of THEIR CONTENT, INCLUDING ratings. Credit ratings are statements of opinions and are not statements of fact or recommendations to purchase, hold, or sell securities. They do not address the suitability of securities or the suitability of securities for investment purposes, and should not be relied on as investment advice.