Expanded pension coverage is sought by White House Idea is to get 42 million Americans into private retirement programs.

May 01, 1991|By New York Times

WASHINGTON -- Secretary of Labor Lynn Martin has proposed changing the nation's pension laws to encourage the creation of retirement programs for about 42 million workers who are currently not covered.

In general, the administration proposes simplifying the rules and reducing the administrative burden for employers, particularly small businesses.

But critics, including groups representing retirees, say the changes would do little to encourage employers to make more generous pension contributions and would mainly benefit highly paid employees who rely on their own savings.

"They are purporting to increase pension coverage, but they're not," said Karen Ferguson, director of Pension Rights Center, a public interest group in Washington. "What they're doing is increasing the availability of tax-sheltered savings plans. Tax-sheltered savings plans are great for yuppies, but they don't work for most American workers."

Martin said yesterday she was not proposing a specific bill to Congress, but was instead trying to start a dialogue on the basic features of a plan.

The proposals come after recent efforts in Congress to deal with growing concern that 45 percent of all full-time employees in the United States have no pension plan, according to Department of Labor statistics.

Many of them are similar to proposals made last year by Sen. Lloyd Bentsen, D-Texas, chairman of the Senate Finance Committee, and Sen. David Pryor, D-Ark., and consequently Martin's overall plan is thought to have a good chance of gaining the bipartisan support needed for enactment.

Business groups generally support the proposals, contending that they would eliminate paperwork that now discourages many small companies from offering retirement programs for workers. But business lobbyists also noted that the biggest obstacle for many employers is the cost.

"Generally speaking, this is a very positive step, but I'm not sure how much change it will create in the marketplace," said John Satagaj, president of the Small Business Legislative Council, which represents dozens of trade associations that lobby for small companies. "In the end, the biggest issue is whether a small business has the money."

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