Pension asset portfolios gained 9.3 percent in 2012, but declining discount rates drove the funded ratio of pension plans lower. The good news is that for the past four years, pension fund returns have exceeded their expectations, even as funded status worsened due to lower discount rates, according to new research by Milliman.

The funded status increased by $53.7 billion during December 2012, ending a volatile year on a positive note for the 100 largest corporate defined benefit pension plans measured by the Milliman 100 Pension Funding Index.

Historically low interest rates were the dominant factor in the $74.4 billion deficit increase during 2012. While higher-than-expected investment returns produced a solid $90.4 billion gain, pension liabilities increased by $164.8 billion. The funded ratio was 76.4 percent as of Dec. 31, 2012, down from 78.7 percent at the beginning of the year but still above the historical low funded ratio of 70.5 percent set in May 2003. Improvements in the December 2012 metrics may be realized by higher-than-expected cash contributions, which will be disclosed as the 100 companies publish annual SEC filings in the first quarter of 2013.