Congress has granted corporate pension plan sponsors some relief from fully funding their underfunded pension plans -- but at a cost. The bill raises the federal insurance premiums for all plans, jacking it highest for the most underfunded plans.

As part of a recently approved federal highway funding bill, which also rescued student loans from rising interest rates, Congress approved a “pension funding stabilization” measure that is expected to reduce the near-term contribution requirements by $40 billion to $50 billion for pension sponsors in the S&P 1500, according to HR consulting firm Mercer

The bill puts guardrails on the discount rate used to determine funding requirements to stabilize the rate from the effects of interest rate volatility, according to an alert from Credit Suisse. The stabilization measure is only used to determine funding requirements, not to determine the accounting liability to be reported in financial statements.

The effect, according to Mercer, is to reduce short-term contributions and to smooth over the volatility companies have seen in recent years. The relief could total more than $100 billion through 2014, according to Mercer's estimate.

While the bill relieves immediate cash funding requirements, it doesn't relieve the ultimate obligation to fully fund any underfunded pension plan. “It merely gives them more time to address their plans' current funding shortfalls, many of which are the result of today's low interest rate environment,” the firm says.

In exchange for reduced cash outlays to fund pension plans, companies will be required under the stabilization measure to pay increased premiums to the Pension Benefit Guaranty Corp., which backs all defined-benefit pension plans in the event of the plan sponsor's default. According to Mercer, the increase will be substantial for all plans, with underfunded plans particularly hit with higher variable-rate premiums.

The latest data from Mercer suggests the aggregate deficit in S&P 1500 pension plans grew $59 billion in the first half of 2012 to $543 billion. The averaged funded ratio is 74 percent, Mercer said.