Government and industry leaders yesterday demanded that the federal agency insuring private pensions make some fundamental policy changes, including cutbacks in worker protection, as a condition of receiving an increase in insurance premiums.

Making his first appearance before a Senate subcommittee as executive director of the Pension Benefit Guaranty Corp., Edwin M. Jones asked Congress to raise the annual premium of $2.60 per employe paid by corporations with defined benefit pension plans to $6. He claimed the increases were necessary to ensure future benefits and reduce PBGC's deficit, expected to reach $236 million by the end of this fiscal year.

He defended the added $3.40, which works out to an increase of 230 percent, as "not much more than the cost of a decent hamburger." At the same time he warned that the requested increase might not be sufficient if economic difficulties force greater numbers of companies to terminate their pension plans.

While Jones conceded the need for legislative changes affecting PBGC, he emphasized the need to increase the premium by the end of the year. Sen. Don Nickles (R-Okla.) said he would oppose any increase "until we get some reform; otherwise it's just treating the symptoms."

A number of changes are contained in Nickles' bill to close loopholes in the Employee Retirement Income Security Act of 1974 (ERISA). Instead of insuring against pension plan termination, PBGC would insure against plan insolvency, a less costly alternative supported by the administration.

Other changes supported yesterday by industry representatives were elimination of early retirement benefits from PBGC coverage and establishment of risk-related premiums, such as those devised by private insurers. Under the present system soundly funded plans wind up subsidizing poorly managed plans.

Richard O'Brien, assistant treasurer of General Motors Corp., testified that the additional cost of prefunding early retirement supplements costs GM $90 million a year and that the assets needed for the pension fund could be better used to meet the car maker's huge capital requirements. Most other industry witnesses and pension consultants supported the Nickles' bill and called for a redefinition of guaranteed benefits plus a cutback in PBGC's $25 million annual administrative costs.

The sole exception was John J. Sheehan of the United Steel Workers of America. "Without the benefit of plan termination insurance," he said, "thousands of steelworkers would lose not only their jobs, but millions of dollars in pension benefits as well." He cited the case of several thousand workers from the Alan Wood Steel Co. in Conshohocken, Pa., which went out of business in 1977. They will receive more than $38 million in pension benefits which would otherwise have been lost, even though they lost many million more in benefits that were not insured by PBGC.

Sheehan warned against using the proposed $6 premium as a "bargaining chip" to enact cutbacks.