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While financial experts have been acknowledging the panic many Americans are feeling about their 401(k)s since the stock market plummeted on Monday, after President Trump’s announcement of global tariff increases last week, there are some substantial financial casualties: The top 25 state and local pension funds have lost approximately $169 billion during the four trading days of April 3-8 following the Trump tariff announcement, according to the Equable Institute, a non-profit pension fund institution.
These state and local pension funds have lost at least $248.8 billion in assets in 2025, said Equable. “State and local pension funds have been struggling with pension debt paralysis over the past several years, with some reasonably positive incremental improvements in funded status but still a persistently high level of unfunded liabilities,” said Anthony Randazzo, Executive Director of Equable, in an issue brief.
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“Coming into 2025, state and local pension funds were fragile, with just an average 80.2% funded ratio and $1.37 trillion in pension debt. The financial market shock of the last few days is exactly the kind of negative scenario that fragile pension funds should be concerned about. It will also be very important to monitor individual pension funds that were already distressed in some capacity coming into this year.”
While earlier this year, Hank Kim, executive director and counsel for National Conference of Public Employee Retirement Systems said “public pensions have proven to be resilient as they've adapted to economic shifts while continuing to strengthen their financial footing,” the tariff announcement seems to have changed pension funds, which typically invest more in private assets than 401(k) plans, quite drastically.
Related: Trump’s tariffs: What it means for 401(k) retirement plans
The new tariff policies are now affecting pension funds in the following ways, according to Equable:
“Significant” public equity losses: For all of top 25 pension funds (such as New York City Public Pension Funds, Florida Retirement System and New Jersey Common Pension Fund, to name a few), Equable projected forward the value of their public equities from their last actual assets reported date up through April 8 using an S&P 500 benchmark.
Private capital and fixed income losses: “As of fiscal year 2024, state and local pension funds had 58% of their assets in non-public equities — e.g. fixed income, private capital, real estate, commodities, etc. Therefore, we know that the losses public pension funds have experienced are deeper than just the initial public equity declines,” according to Equable.
Real assets and real estate investments: While existing property prices increase over time as the costs of materials for building new homes or commercial real estate is driven upward by costs on importing construction materials, according to Equable, “in the near-term, the value of real estate investment trusts have on average declined, as reflected in a common benchmark index of all U.S. REITs.”
Cash flow concerns: “State and local pension funds could experience changes in cash flow in the coming years if these tariffs lead to a prolonged economic recession—whether this is related to economic uncertainty, price increases as a reaction to tariff hikes, liquidity constrains due to market declines, or all of the above,” according to Equable.
Fragile pension funds should be concerned, cautions Equable: “It will also be very important to monitor individual pension funds that were already distressed in some capacity coming into this year.”
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Lynn Cavanaugh
Lynn Varacalli Cavanaugh is Senior Editor, Retirement at BenefitsPRO. Prior, she was editor-in-chief of the What's New in Benefits & Compensation newsletter. She has worked for major firms in the employee benefits space, Vanguard and Willis Towers Watson, as well as top media companies, including Condé Nast and American Media.
