Deferred policy acquisition cost. Excluding the impact of realized investment gains, deferred policy acquisition cost amortization decreased $89.7 million to $210.7 million in 2011. This decrease in amortization was attributable to the unlocking of assumptions as a result of annual comprehensive reviews of assumptions in the third quarters of 2011 and 2010. The unlocking resulted in an overall decrease in amortization of $2.9 million in 2011, compared to an acceleration of amortization of $46.4 million in 2010. In 2011, the unlocking primarily related to changes in assumptions for universal life policies which resulted in a decrease of $35.8 million from higher expected fees partially offset by an increase of $34.0 million from lower premium persistency. In 2010, the unlocking was primarily driven by increased lapses in portions of our universal life business, which resulted in $36.6 million of additional amortization. Excluding the impact of the unlocking, amortization was lower by $41.4 million primarily related to universal life as a result of less favorable mortality experience during 2011.
it is probable we will be unable to collect cash flows sufficient to recover the amortized cost basis of the security.
Net realized investment losses increased $6.5 million to $16.4 million in 2011, compared to $9.9 million in 2010. The increase in net realized investment losses was primarily a result of a decline in net transaction gains of $28.3 million. In addition, realized losses related to fair value options were $0.6 million in 2011 compared to realized gains of $3.5 million in 2010. These declines were offset by $23.9 million of lower impairment losses for 2011 compared to 2010. Realized losses on derivative assets and liabilities improved $2.0 million during 2011. This improvement was primarily attributable to $17.2 million of lower realized losses on a surplus hedge, which utilizes futures and options to hedge against declines in equity markets and the resulting statutory capital and surplus impact. This improvement was offset by a $16.6 million increase in realized losses on embedded derivative liabilities and a $2.5 million decrease in realized gains on derivatives associated with variable annuity guarantees. Realized gains associated with variable annuity guarantees included a gain of $15.9 million for 2011 associated with the non-performance risk factor compared to a gain of $1.4 million for 2010.
We have a comprehensive, enterprise-wide risk management program. Our Chief Risk Officer reports to the Chief Financial Officer and monitors our risk management activities. The Chief Risk Officer provides regular reports to our Board of Directors without the presence of other members of management. Our risk management governance consists of several management committees to oversee and address issues pertaining to all our major risks-operational, market and product-as well as capital management. In all cases, these committees include one or more of our Chief Executive Officer, Chief Financial Officer, Chief Investment Officer and Chief Risk Officer.
We sponsor defined benefit pension plans for our employees. For GAAP accounting purposes, we assumed an 8.0% long-term rate of return on plan assets in the most recent valuations, performed as of December 31, 2011. To the extent there are deviations in actual returns, there will be changes in our projected expense and funding requirements. As of December 31, 2011, the projected benefit obligation for our funded and unfunded defined benefit plans was in excess of plan assets by $186.7 million and $141.2 million, respectively. We made contributions totaling $17.4 million and $25.7 million to the pension plans during 2011 and 2010, respectively. Over the next 12 months, we expect to make contributions of approximately $16.4 million, of which approximately $3.4 million will be made in the first quarter of 2012.
See Note 17 to our consolidated financial statements under “Item 8: Financial Statements and Supplementary Data” in this Annual Report on Form 10-K for more information on our employee benefit plans.
Cash used for operating activities decreased by $79.0 million during the year ended December 31, 2011 compared to the year ended December 31, 2010. This was primarily attributable to a $244.0 million decrease in policyholder benefits consistent with favorable persistency and mortality. While operating cash flows remain negative as of December 31, 2011, this was primarily driven by cash surrenders of deposit-type contracts for which funds are readily available in segregated separate accounts or liquid general account assets.
Cash flows used for investing activities decreased $767.0 million during the year ended December 31, 2010 compared to the year ended December 31, 2009. This was primarily attributable to the decline in sales and maturities of available-for-sale debt securities. In addition, outflows for policyholder loan advances decreased by $215.2 million as a result of repayment of outstanding loan balances primarily associated with one large surrender in the second quarter of 2009. Cash proceeds of $32.9 million were received from the sale of PFG and PLARNY.
Cash flows provided by financing activities were $167.5 million for the year ended December 31, 2010, an increase of $364.3 million compared to cash flows for financing activities of $196.8 million for the year ended December 31, 2009. This was primarily the result of a decrease of $253.8 million in policyholder withdrawals as a result of lower surrenders. In addition, policyholder deposits increased $95.6 million as a result of new sales of fixed indexed annuities. See Note 9 to our consolidated financial statements under Item 8 “Financial Statements and Supplementary Data” in this Annual Report on Form 10-K for more information on financing activities.
The increase in total investments was the result of purchases of securities associated with positive cash flow generated by our annuity business as sales continue to increase. In addition, the value of available-for-sale debt securities improved as a result of favorable impacts on fixed income securities as treasury rates have declined. Fair value option investments decreased primarily as a result of the sale of securitized financial assets for which an irrevocable election had been made to use the fair value option.
The changes in the projected benefit obligations of the supplemental plans at December 31, 2011 as compared to December 31, 2010 were principally the result of accrued interest cost and actuarial losses due to assumption changes.
As of December 31, 2011, we did not have any significant off-balance sheet arrangements as defined by Item 303(a)(4)(ii) of SEC Regulation S-K. See Note 12 to our consolidated financial statements under “Item 8: Financial Statements and Supplementary Data” in this Annual Report on Form 10-K for more information on variable interest entities.