Bush signs law to ease pension rules

WASHINGTON - President Bush yesterday signed into law legislation providing businesses and the elderly with short-term relief to help counteract effects of the recession.

The new law eases pension funding requirements by eliminating some penalties on companies whose funding falls below federal guidelines.

Pfizer Inc., International Business Machines Corp., United Parcel Service Inc., and dozens of other companies said the 40 percent drop in the stock market this year would have forced them to make larger-than-normal contributions to the plans to meet federal guidelines.

Bush was reluctant to support the measure, spokesman Tony Fratto said, because it will increase the costs of near-term claims on the Pension Benefit Guaranty Corp. It also could lead to some benefit losses to workers over the long term, he said at a White House briefing.

"Our concerns with the legislation remain, but we do believe that, in this current economic environment and current economic circumstances, that the benefits of the legislation outweighed our objections," Fratto said.

The bill also suspends for 2009 a federal requirement that people aged 70 1/2 begin taking out assets in individual retirement accounts and 401(k) and 403(b) savings accounts.

Critics said rigid withdrawal requirements would force the elderly to sell retirement assets at depressed values.