S&P 1500 pension funded status increased by two percent in 2024 

The estimated aggregate funding level of pension plans sponsored by S&P 1500 companies as of December 31, 2024, increased to 109 percent from 107 percent as of December 31, 2023.

Over the course of 2024, there were double-digit gains in domestic equity markets and an approximately 61 basis point increase in interest rates used to calculate corporate pension plan liabilities. The estimated aggregate surplus of $135 billion USD as of December 31, 2024, increased by $17 billion USD compared to a surplus of $118 billion USD measured at the end of 2023 according to Mercer,¹ a business of Marsh McLennan.

Mercer’s main findings for 2024 include:

• Funded status fluctuated throughout the year, moving between 105% and 110% before settling at 109% to end the year.
• The surplus of $118 billion at 2023 year-end changed to a surplus of $135 billion at 2024 year-end.
• The percentage of plan sponsors that were over 100% funded increased from 48% at year-end 2023 to 49% at the end of 2024.

The S&P 500 index increased 23.31 percent and the MSCI EAFE index increased 1.15 percent in 2024. Typical discount rates for pension plans as measured by the Mercer Yield Curve increased from 4.99 percent to 5.60 percent.

“Funded status remained flat throughout December but achieved a two percent increase year over year. Despite a fair amount of interest rate volatility in 2024, rates ultimately ended higher compared to the beginning of the year, contributing to the increase in funded status,” said Scott Jarboe, a Partner in Mercer’s Wealth Practice.

“While international equities were only slightly higher at the year-end, domestic equity markets boomed, prompting plan sponsors to question their next steps as valuations remain very high compared to historical norms. With considerable activity in the pension risk transfer space this year, 2025 could be another strong year as pension funded status remains generally high in aggregate,” Jarboe 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 December 31, 2024, in line with financial indices. The estimates include US 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, 2023, was $1.83 trillion USD, compared with estimated aggregate liabilities of $1.71 trillion USD. Allowing for changes in financial markets through December 31, 2024, changes to the S&P 1500 constituents and newly released financial disclosures at the end of December, the estimated aggregate assets were $1.72 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.}