WASHINGTON—The head of a benefits lobbying group is urging congressional leaders to act quickly to approve legislation that would ease pension funding rules but says more study is needed for a proposal by Senate Majority Leader Harry Reid, D-Nev., to boost premiums levied by the Pension Benefit Guaranty Corp.

Sen. Reid, in a letter previously sent to Senate Minority Leader Mitch McConnell, R-Ky., and House Speaker John Boehner, R-Ohio, said changes in pension funding rules and increases in PBGC premiums could be used to fund a one-year extension of the current student loan interest rate and reauthorization of the nation's surface transportation programs. Without an extension, the interest rate used in the federal student loan program will double.

All employers with defined benefit plans pay a flat rate of $35 per participant premium to the PBGC, which has a $26 billion deficit. In addition, employers with underfunded plans pay an additional premium of $9 per $1,000 of plan underfunding.

But American Benefits Council President James Klein said careful congressional consideration of a PBGC premium hike is necessary before any changes are made.

“Many questions have been raised as to whether PBGC actually has a deficit, inasmuch as the historically low interest rates overinflate its reported deficit, just as they do for the pension system itself,” he wrote to Sens. McConnell and Reid, Rep. Boehner and House Minority Leader Nancy Pelosi, D-Calif.

“Without congressional scrutiny of PBGC's actuarial work and possible governance reform of the agency, it is impossible to justify large new obligations on businesses and nonprofit organizations that sponsor pension plans,” he added.

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Mr. Klein, though, urged prompt passage of a proposal—now part of a Senate-passed transportation bill—that effectively would allow employers to use higher interest rates in valuing pension plan liabilities, reducing the amount of their tax-deductible contributions. In all, the congressional Joint Committee on Taxation estimates that the measure would increase federal revenues by $9.25 billion through 2018.

The House-passed transportation funding bill, though, lacks a comparable provision. Congressional negotiators have been trying to come up with a compromise transportation bill, with little progress.