Retooling Ford gets break from pension boost Ford Motor can be grateful for a silver lining in what could be a tough year. The U.S. car maker's pension obligations have become less daunting. That's freeing up an extra $3-billion (U.S.) of cash in 2014 even after the company's recent dividend hike. Ford managed to beat estimates of its earnings in the final three months of last year, but profit excluding one-offs was still lower than in the last quarter of 2012. And executives reiterated that this year would be tougher than last with pretax earnings, operating margin and operating cash flow all expected to be lower than in 2013, largely thanks to preparations for new products. They told investors on Tuesday that Ford would halt production of its best-selling F-150 truck for 13 weeks to ready the launch of the new, aluminum-shell version. The pension picture, however, looks brighter. Globally, Ford's plans are now underfunded by $9-billion, a $10-billion improvement in 12 months. Part of that is driven by accounting: with interest rates on the up, Ford has lifted the discount rate used to calculate its pension liabilities to 4.74 per cent, almost a percentage point higher than before. The company also contributed $5-billion of cash last year. Merrill Lynch reckons Ford's U.S. plans are now 95-per-cent funded. It is not alone in improving its pension position. The aggregate funded status of companies in the Russell 3000 Index has probably jumped to 96 per cent of liabilities at the end of last year from 77 per cent at the end of 2012 , according to JPMorgan Asset Management. The timing is, however, opportune for the Motown manufacturer. Now Ford will only need to pump around $1.5-billion into its pension plans this year. Even after allowing for the 25-per-cent increase in its dividend payout announced earlier this month, that leaves the company with $3-billion in extra cash to play with. Ford could use that for research and development, to pay down debt or even at some point to increase the dividend further. That would only make sense if profitability recovers somewhat next year. In the meantime, a pension breather is welcome in what may be a taxing year.