AK Steel Holding Corp., West Chester, Ohio, will reduce its 2013 pension contribution by $100 million as a result of pension funding changes passed last week in the federal highway bill, the company said Monday in a regulatory filing.
The company now expects pension contributions to be about $200 million next year.
The bill, signed by President Barack Obama on July 6, allows corporations to use longer-term interest rates to discount pension liabilities; thereby taking advantage of lower contributions in the short term in light of depressed interest rates after numerous rounds of monetary easing by the U.S. Federal Reserve.
The company expects to make contributions of $170 million this year.
AK Steel had defined benefit assets of $2.4 billion as of Dec. 31 with a funded status of 62.2%, according to its latest 10-K filing. Asset allocation was 59.3% equities; 38.8% fixed income; 1.8% cash and 0.1% private equity.