Declining discount rates in 2011, including an historic year-end low of 4.8%, drove the pensions of the Milliman 100 companies to a record year-end 2011 funding deficit of $326.8 billion, according to a new report.

Milliman Inc., Seattle, Wash., published this finding in its 2012 Pension Funding Study, which covers 100 U.S. public companies with the largest defined benefit pension assets whose 2011 annual reports were released by March 5, 2012. The study’s results are based on the pension plan accounting information disclosed in the footnotes to the companies’ annual reports for the 2011 fiscal year and for previous fiscal years.

The $326.8 billion deficit in 2011, the study says, represents a $94.7 billion increase over the year-end 2010 funding deficit of $232.1 billion. The total is also the largest deficit in the 12-year history of the study.

Pension expense, the charge to company earnings, also registered a record level of $38.3 billion during fiscal year 2011, the report says. This is a $7.8 billion increase over fiscal year 2010, which had been the previous 11-year high.

Cash contributions of the Milliman 100 companies totaled $55.1 billion. The study says that Milliman had expected an increase exceeding the record level of $60.3 billion contributed in 2010.

The disappointing 2011 investment experience and $55 billion in contributions, the report adds, were not enough to offset liability losses. The 9.3% increase in liabilities generated by the decrease in discount rates that are used to measure pension plan liabilities (median rate of 4.8% at year-end 2011, down 62 basis points from 5.42% at year-end 2010) offset the cash contributions and modest 5.9% investment experience.

The Milliman 100 companies had set an expectation that 2011 investment returns would be, on average, 7.8%.

The report says the deterioration in funded ratio was a reversal of the investment gains made in 2010. The funded ratio dropped to 79.2% at year-end 2011, down from 83.9% at year-end 2010 and 81.7% at year 2009.