S&P 1500 Pension Funded Status Increased by One Percent in January 

The estimated aggregate funding level of pension plans sponsored by S&P 1500 companies increased by one percent in January 2025 to 110 percent as a result of an increase in equity markets and discount rates. As of January 31, 2025, the estimated aggregate surplus of $158 billion USD increased by $23 billion USD compared to a surplus of $135 billion USD measured at the end of December according to Mercer,¹ a business of Marsh McLennan.

The S&P 500 index increased 2.70% percent and the MSCI EAFE index increased 5.21% percent in January. Typical discount rates for pension plans as measured by the Mercer Yield Curve increased from 5.60 percent to 5.61 percent.

“Pension funded status for the S&P 1500 increased 1% in January due to equity markets starting the year strong while discount rates were essentially flat,” said Matt McDaniel, a Partner in Mercer’s Wealth Practice. “As the new U.S. administration took office, international equities had their best month in over a year and domestic equities had positive returns as well.”  

“Markets will be closely watching for the economic impact of the recently announced tariffs and other potential executive actions. The Fed continues to take a ‘wait and see’ approach with interest rates leaving plan sponsors a lot of uncertainty to process to start the new year,” 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 January 31, 2025, 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 December 31, 2024, was $1.72 trillion USD, compared with estimated aggregate liabilities of $1.58 trillion USD. Allowing for changes in financial markets through January 31, 2025, changes to the S&P 1500 constituents, and newly released financial disclosures at the end of January, the estimated aggregate assets were $1.74 trillion USD, compared with the estimated aggregate liabilities of $1.58 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.}