U.S. Military Retirement Fund
Overview
The Military Retirement Fund (MRF) finances the retirement, disability, and survivor benefits of the United States uniformed services on an actuarial basis. It is administered within the U.S. Department of Defense, styled the Department of War in current official reporting, and it covers members of the Army, Navy, Marine Corps, Air Force, Space Force, and Coast Guard. The Fund was established on 1 October 1984 to pre-fund benefits rather than pay them purely as they come due.
The MRF held $1.79 trillion in assets as of 30 September 2025 and made benefit payments to approximately 2.38 million military retirees and survivors during the year. In this directory it ranks third by AUM, behind the U.S. Social Security Trust Funds and Japan's Government Pension Investment Fund.
Like the Social Security Trust Funds, the MRF invests only in U.S. Treasury securities and does not use external managers or invest in public equity or private markets. Unlike Social Security, it runs an active fixed-income strategy across a range of Treasury instruments, weighted heavily toward inflation-protected securities. The Fund has received a clean audit opinion for 30 consecutive years through fiscal 2024, the longest such record among Defense Department components.
Investment Mandate
The mandate is statutory, set under Chapter 74 of Title 10 of the U.S. Code. The Fund invests solely in nonmarketable, market-based U.S. Treasury securities, whose value tracks equivalent marketable Treasuries, and it holds them to maturity. It does not allocate across asset classes, use external managers, or invest in equities, private markets, or non-Treasury instruments.
Within that Treasury-only universe, the Fund follows a disclosed strategy: it targets a portfolio of 60 to 80 percent U.S. Treasury Inflation-Protected Securities (TIPS) to hedge against future inflation in retiree cost-of-living adjustments, with the balance in nominal bonds, zero-coupon bonds, and overnight securities for liquidity. The DoW Investment Board sets the strategy, advised by an Investment Advisory Committee of reservists with civilian investment expertise.
The matching-relevant fields are not applicable: there is no asset-class allocation across equities or alternatives, no external manager use, no sector or geographic focus, and no policy on unsolicited proposals. The Fund is not a discretionary allocator to outside strategies of any kind.
Financial Position
Figures from the FY2025 Military Retirement Fund Audited Financial Report, for the fiscal year ended 30 September 2025.
- Total assets: $1.79 trillion (book value) as of 30 September 2025, up about 13 percent during the year. Market value of the securities was $1.5 trillion, lower than book value because the held-to-maturity portfolio carries unrealized losses after the rise in interest rates.
- Investment income: $68.7 billion in FY2025. Effective fund yield: 3.9 percent.
- Actuarial accrued liability: $3.05 trillion. Unfunded portion: $1.37 trillion. Funded ratio: 58.6 percent, up from 57.1 percent a year earlier.
- Benefits paid: about $80.5 billion in FY2025.
- Funding sources in FY2025: $23.7 billion in normal-cost contributions from the services, $177.0 billion from the U.S. Treasury (unfunded-liability amortization plus concurrent-receipt normal cost), and $68.7 billion in investment income.
The Fund is designed to reach full funding over time. The initial unfunded liability of $529 billion, dating to the Fund's creation in 1984, was amortized over 42 years, with the final payment made on 1 October 2025, and is expected to be fully funded through Treasury contributions by fiscal 2026. The Fund's own 20-year projection shows the balance growing from about $2.0 trillion in 2026 to roughly $4.0 trillion by 2045, and it is projected to remain solvent well beyond that horizon.
Beneficiary population (September 2025)
| Group | Count |
|---|---|
| Non-disability retirees from active duty | 1.461 million |
| Reserve retirees | 460,000 |
| Survivors | 311,000 |
| Disability retirees | 146,000 |
| Temporary Early Retirement Authority | 70,000 |
All figures from the FY2025 Military Retirement Fund Audited Financial Report (7 November 2025) and the DoD Office of the Actuary valuation. Book value of assets is $1.79 trillion; market value of the securities is $1.5 trillion.
Governance and Leadership
Oversight of the Fund is shared across several bodies. Public officers and governing bodies, as published, include:
- The DoW Board of Actuaries, an independent, three-member federal advisory committee appointed by the Secretary. It approves the actuarial methods and assumptions, determines how unfunded liabilities are amortized, and reports to the President and Congress at least every four years.
- The DoW Office of the Actuary, which calculates the Fund's actuarial liability and funding requirements.
- The Defense Finance and Accounting Service (DFAS), responsible for the Fund's accounting, investing, benefit payments, and reporting.
- The DoW Investment Board, established in 2003, whose members are the Director of DFAS, the Deputy Chief Financial Officer, and a senior military member. It meets twice a year to set investment objectives, policies, and strategy.
The Secretary directs the Secretary of the Treasury to make the required Treasury payments into the Fund. The Fund does not have a designated Chief Financial Officer and is overseen operationally by the Military Retirement Fund Financial Management Committee.
How to Engage
Not applicable. The Military Retirement Fund does not accept external capital, does not select investment managers, and does not entertain unsolicited investment proposals. Its assets are invested solely in U.S. Treasury securities under a statutory mandate, managed internally through the Defense Finance and Accounting Service and the DoW Investment Board. There is no RFP process, no investment consultant, and no manager registration. This fund is a reference entry in the directory and is not a target for capital raisers or the fit-matching tool.
Sources and Documents
- FY2025 Military Retirement Fund Audited Financial Report. Published 7 November 2025. Source for assets, liabilities, funded ratio, investment income, holdings, benefits, and beneficiary counts. comptroller.war.gov
- DoD Office of the Actuary, Valuation of the Military Retirement Fund. Source for actuarial liability, funded status, and assumptions. actuary.defense.gov
- DoD Board of Actuaries, meeting minutes. Source for governance and board decisions. actuary.defense.gov
- U.S. Government Accountability Office, DOD Financial Management (GAO-25-108052). Source for the clean-audit record and FY2024 asset figure.
- DEEP Disclosure Rating methodology. /deep-disclosure-rating/
Data Notes and Methodology
The Fund reports on a federal fiscal year ending 30 September. Assets are stated at book value (amortized cost), the basis on which the Fund and this directory rank it. The market value of the securities, $1.5 trillion, is lower because the portfolio is held to maturity and carries unrealized losses after interest rates rose. Funded ratio is total assets to actuarial accrued liability, as reported by the Fund. The DEEP Disclosure Score was assessed against the published rubric on the Fund's own disclosures, with not-applicable items listed above.
- Last updated: August 2026
- Next expected update: FY2026 Audited Financial Report (around November 2026)
- DEEP Disclosure Rating last assessed: August 2026