The Trump administration’s sweeping changes to U.S. tariff policies and subsequent market plunges have wiped out roughly $169 billion from the nation’s top 25 state and local pension funds, according to a report from Equable Institute released April 9.
The market losses, which occurred from April 3 to April 8 following the administration’s announcement of global tariffs, come on top of losses sustained from financial market turbulence earlier in the year. All told, the nation’s 25 largest public pension funds have lost an estimated $249 billion in public equities since the start of 2025.
“Pension funds should brace for cash flow challenges if the current market turmoil leads to a recession,” Equable, a nonprofit, warned in the report.
The most immediate portfolio losses were from public equities, but losses have occurred across all asset classes, the report said.
Since April 2, the Bloomberg U.S. Aggregate Bond index has fallen 1.3%, while the share prices of private equity firms such as KKR & Co. and Apollo Global Management have dropped 18% to 22% each, according to the report.
Equable has not yet estimated how the losses from assets other than public equities have affected pension funds, saying only that total losses are deeper than just the initial public equity declines. It estimates that state and local pension funds have 58% of their assets in asset classes other than public equities, such as fixed income and private capital.
The nonprofit was unclear on whether the new tariff policies would increase or decrease the value of pension fund real estate holdings. State and local pension funds held 9% of their assets in real estate at the end of 2024, Equable said.
Equable also warned that should the U.S. economy go into a recession it would put additional pressure on already stressed pension funds. A recession would reduce state and local government revenues, which in turn would reduce pension funds’ ability to increase contribution rates needed to respond to investment losses. It would also lead to public-sector workforce cuts.
Equable warned that anemic cash flows would be especially worrisome for pension funds with high retiree-to-active participant ratios and those with low funded status levels.
“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,” the report said.
