Pension Funding Equity Act of 2004

The Pension Funding Equity Act of 2004 (Public Law 108-218) was designed to provide temporary financial relief to companies that sponsor traditional "defined benefit" pension plans. The law allowed businesses to use more favorable interest rates based on corporate bonds, rather than 30-year Treasury bonds, to calculate their pension obligations, which effectively lowered the amount of cash they were required to contribute to their plans in the short term.

For everyday citizens, this legislation aimed to protect jobs and retirement security by preventing companies—particularly those in the airline and steel industries—from being overwhelmed by massive, immediate pension funding requirements during a period of economic volatility. Additionally, the law increased transparency for workers in multiemployer plans by requiring plan administrators to provide more detailed annual notices regarding the financial health and funding levels of their retirement benefits.