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.