In 1989, the acting inspector general of the Labor Department warned that mismanagement of private pension funds amounted to a "potential S&L." It's fashionable in Washington to say that every financial crisis could be the next equivalent of the savings and loan debacle, but Raymond Maria knew what he was talking about.

With only a handful of regulators policing nearly $2 trillion in private pension plans, Maria felt there was a disaster in the making. He was accused of being alarmist and he was not appointed to keep the inspector general job.

Today, pension funds are as vulnerable as ever. Outgoing Labor Secretary Elizabeth Hanford Dole last fall proposed to Congress a series of changes to toughen up the Employee Retirement Income Security Act of 1974 (ERISA) that governs pension plan enforcement. Those proposals will be taken up in the current session of Congress, but even if passed they will provide employees little security.

Where do 65 million American pension plan participants go for protection? To court. Uncle Sam has decided to leave most of the enforcement of pension plans to the workers themselves. When the Labor Department doesn't catch mismanagement or doesn't punish the pension plan managers, then the only thing left for workers to do is sue.

Dole suggested changes to the law when she realized that the 300 federal investigators who keep track of pension plans could not possibly police nearly 900,000 private plans amounting to one-third of all the nation's investment capital.

Pension rights advocates say the changes are "a drop in the bucket." Pension lawyers complain that the proposals overlook glaring inadequacies in the system. Karen Ferguson, who heads the Pension Rights Center here, says, "They don't even begin to deal with the problem."

Pension lawyer Jeff Lewis told our associate Dean Boyd that the Labor Department proposals for change don't give workers the silver bullet they need to fight pension abuse. ERISA lets workers sue employers over pension fraud, but the courts won't award punitive damages that could act as a deterrent to future abuse. The Labor Department considered the notion of punitive damages but backed down. Some insiders blame industry lobbying.

Another hole in the proposals involves outside consultants to a pension fund. Under ERISA, a worker can't sue them if they give bad advice or even if they conspire with trustees of the plan to embezzle money.

To their credit, the proposed changes would allow lawyers' fees and expert witness fees for the workers who are suing over embezzlement and mismanagement. But they don't do the same for simple benefit dispute cases, which are far more common.

In sum, there aren't enough Labor Department investigators to stop fraud and mismanagement as it happens, and the punishment for those who do get caught is mild. When workers sue after the fact to recover their money, they're handicapped by the law.

If the government wants to leave the enforcement up to average citizens, "it has to give them more tools to fight with," Ferguson said.