Companies have won another round of relief on meeting pension funding requirements, but the package includes a catch that may cause some companies to think hard about signing up.

Congress passed and President Obama has signed into law the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act. The measure gives companies some options for stretching out any pension funding requirement over a longer period of years, said Jon Waite, chief actuary and director of investment management advice for consulting firm SEI.

Currently, companies are required to contribute cash to pension plans in a way that would catch up on any underfunding in seven years, said Waite. The recent legislation allows companies to stretch out such contributions in a couple of different ways, he said. They can choose to make interest-only payments for two years, then catch up over the next seven years, or they can stretch the entire amount over 15 years, he said.

Waite said the measure is intended to help companies overcome big asset losses that occurred amid market turmoil especially in 2008, but it’s also intended to free up cash so companies can put it into current operations. “If they have a longer period to pay off (their pension deficits), they aren’t funneling cash to the pension as quickly, so they can use that to help strengthen the organization during the recovery period,” he said.

In a report on the new relief, Credit Suisse said the pension relief provision could reduce 2011 pension contributions among S&P 500 companies by up to $13 billion. The catch, said Waite, is that companies can only take advantage of the extended catch-up provisions if they have no one on the payroll pulling in compensation of more than $1 million.

“The thinking there is if you can afford to pay people over a million dollars, you can afford to fund your pension plan that provides funds to the rank-and-file employees,” said Waite. “It doesn’t allow for the fact that in some places you need to pay people well to get the best talent.”

Credit Suisse points out that while the relief delays when contributions must be made, providing some important upfront liquidity, it doesn’t change the ultimate pension obligation. The temporary reduction in liquidity risk could boost valuations in the short term, the firm said, but it could also lead to larger funding requirements over the long term, creating pension risk that could hurt stock prices in the future.

“It is meaningful relief for most companies, but of course it’s going to require company-by-company analysis to see how much impact these relief provisions will provide,” said Waite. “Does it make sense in the overall corporate finance picture?”