updated 12/23/2008 2:23:38 PM ET 2008-12-23T19:23:38

President George W. Bush signed legislation Tuesday that frees businesses from having to pump billions into pension plans in the coming year, another sign of the nation's deepening economic crisis.

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The legislation has been a priority of business groups, which contend that some companies will have to freeze pension plans, lay off workers or even go bankrupt without the relief.

Congress approved the bill this month in one of its final acts of the year.

Many businesses with defined-benefit plans have absorbed a double blow: abiding by a 2006 law that they fully fund the plans, and seeing the value of the plans eroded by declines in markets where the pension funds are invested. The new law does not erase the companies' funding obligations but, given the current economic downturn, does adjust some payment schedules set up under 2006 law.

The measure enacted Tuesday also suspends for 2009 a requirement that people 70 1/2 and older must withdraw a minimum amount from their retirement plans or IRAs. Those who do not are subject to a 50 percent penalty on the amount that should have been withdrawn.

Bush spokesman Tony Fratto said the White House had concerns with the legislation, including that workers might lose benefits in the long term. But the benefits outweighed the drawbacks, Fratto said, given "this current economic environment."

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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