Jan. 3 (Bloomberg) — 3M Co. and Deere & Co. are among U.S. employers seeing pension costs drop from a $76 billion peak, freeing up cash to spend or return to investors, as the Federal Reserve's pullback on bond buying boosts interest rates.

The drain on company cash is easing after rising rates and surging stock prices helped increase the pension funding levels to 93 percent last year for 418 large companies with U.S. plans, from 77 percent a year earlier, consultant Towers Watson said yesterday in a report.

Pension expenses for Standard & Poor's 500 Index companies jumped fourfold in 2012 from $19 billion in 2008, according to data compiled by Bloomberg. Now, 2013's increases in interest rates and equities probably will continue this year as the Fed begins to taper bond purchases, pushing defined-benefit plans closer to full funding levels, Towers Watson said.