Madeline S., 58, has been working more than 20 hours a week for a New York bank for 23 years, but she is not going to get a penny from the bank's pension system when she retires in seven years, she told the Senate Special Committee on Aging yesterday.

The witness, who declined to give her name for fear of being fired, said she has been told that a loophole in the federal law regulating private pensions let her company exclude her even though she worked far more than the time normally required for pension coverage.

Margery Boley, 69, of Columbus, Ohio, was enrolled in the J.C. Penney & Co. pension plan for 20 years, but she received nothing when she retired as a sales clerk, she testified. She said the Penney pension plan included provisions reducing any retiree's pension by an amount equal to a part of the individual's Social Security benefit. This is permitted by federal law, but it wiped out her pension.

Cases like these, said Committee Chairman John Heinz (R-Pa.), illustrate the gaps in private pension coverage, even though such pensions have $700 billion in assets. They also illustrate remaining loopholes despite the 1974 Employe Retirement and Income Security Act, which laid down minimum rules for companies with pensions.

The problems, as described by Heinz and numerous witnesses, are these:

While Social Security covers well over 90 percent of workers, employer pension systems that supplement it (or in the case of some government workers substitute for it) cover only 56 percent of the nonfarm labor force. That is a big increase over 30 years ago, but in recent years the proportion has not been rising.

The percentage of workers covered by private pensions may be permanently stuck at around one-half of workers because most new jobs are in service industries and small businesses where coverage is traditionally low because of financial pressures, according to Dallas Salisbury, president of the Employe Benefit Research Institute, a nonprofit research group. Even where an individual is in a covered job, he or she may never receive a benefit because of failure to "vest" (earn a permanent right to benefits). This usually requires at least 10 years in a job covered by a pension. Job mobility is great, with the average worker holding 10 jobs during his lifetime. Unlike Social Security, where the individual's work record travels with him, private pension credits earned in one job are not portable when the worker goes elsewhere. Even where one does stay long enough in one job to vest, years worked there may not be enough to build a sizable private pension. Unlike Social Security, few private pension systems (about 3 percent) pay automatic annual cost-of-living increases, so inflation quickly erodes the value of even a high initial pension. There are numerous loopholes, such as described by Madeline S. In addition, the type of "integration" with Social Security described by Margery Boley can rob the individual of most of the expected benefit. As a result of these gaps, Heinz said, three quarters of people 65 and over receive no pensions other than Social Security. And of the total income of the aged, only 7 percent comes from private pensions and 7 percent from government pensions. Social Security provides 40 percent, wages from those still working 25 percent and income from assets 18 percent.

Salisbury said those receiving benefits include people who retired before systems were widespread. Among recent retirees, according to U.S. studies, 56 percent of married couples and 42 percent of unmarried persons had some pension income other than Social Security, about two-thirds from private jobs and the rest from government.