IN THE COURSE of hearings before the Senate Special Committee on Aging, Committee Chairman John Heinz pointed out that, despite major reforms in 1974, only half of private sector workers are covered by pensions and many of those will never draw benefits. Social Security is still far and away the major source of income for the retired and the only source of pension income for three out of four elderly people. Although recently retired people are more likely to receive private pensions, fewer than half do.

Partly that's because the big job growth has been in lower-paying service industries and small businesses providing few fringe benefits. But, as witnesses recounted from their own sad experience, the law also allows companies to design plans so that the lowest-paid workers receive few or no benefits except Social Security and to deny benefits to part-time workers or those with relatively short or interrupted employment. Firms may also terminate well-funded plans, walk away from future obligations and pay off past credits under assumptions that may understate workers' real entitlements.

Spokesmen for labor and industry rarely agree, but the hearings produced considerable unanimity that current pension law, which allows companies to deny all benefits to workers with less than 10 years' service, is good neither for the economy nor for workers. Discouraging workers' turnover, as such pension plans tend to do, can be helpful to companies that need a highly skilled, stable work force. But in a rapidly changing economy, labor mobility can be a big advantage -- witness high levels of U.S. job growth compared with the relatively rigid European economies.

It seems clear that government pension laws should at least be neutral with respect to mobility, rather than discouraging it. Requiring companies to guarantee benefits to workers with shorter tenure would cost more unless other pension features were scaled back. But it would greatly increase the chances that workers would end up with some pension.

Those chances would be further increased, and offsetting savings achieved, if pension pay-outs were delayed until retirement. A study by committee staffer Larry Atkins shows that little from early lump-sum pension pay-outs is actually saved for retirement. Sen. Heinz and other senators are currently working on possible pension legislation. The recent hearings should sharpen their ideas.