Employers and workers yesterday criticized proposed rules meant to make it easier for companies to change their traditional retirement plans.

On the first of two days of hearings before a panel of Treasury Department and Internal Revenue Service officials, representatives of large employers called the proposed rules on "cash-balance" plans too rigid. They said the regulations would harm many other types of widely used benefit plans. The proposed regulations are so narrowly drawn that they would invalidate the retirement plans of at least half the Fortune 100 companies, said Kathy Cissna, director of retirement plans at R.J. Reynolds, representing an employer group called the Coalition to Preserve the Defined Benefit System. "The flaws in the proposed regulations will trip up pension plans that have never before been questioned and are clearly not discriminatory," she said.

Employees and several members of Congress said rules would lead to significant cuts in retirement benefits. But in a departure from the outpouring of criticism that has hit cash-balance plans since they became popular in the late 1990s, some opponents said they regard the plans as reasonable as long as workers aren't hurt in conversions.

Cash-balance plans "are a good thing," said Rep. Rahm Emanuel (D-Ill.). "They should be permitted," but only "without doing damage to older workers."

Emanuel was a White House aide when the Clinton administration imposed a moratorium on cash-balance conversions. The proposed rules would clear the way for new conversions.

"We are not opposed outright to cash-balance plans," said Rep. George Miller (D-Calif.). "All we are saying is there has to be a transition rule" to protect workers.

The hearings are part of the public comment process on the proposed rules, which would establish that cash-balance plans are not age-discriminatory as long as they meet certain tests.

The Treasury Department and the IRS this week withdrew some of the proposed rules after complaints that they would make it harder for companies to protect older workers in a conversion.

Traditional pensions typically pay benefits in retirement related to an employee's pay and years of service with the company. Such formulas generate substantial benefits for longtime employees, but very little for workers who stay with a company only a few years.

In a cash-balance plan, benefits accumulate more evenly, giving younger and shorter-term workers relatively more and long-serving workers relatively less.

Backers of cash-balance plans argue that in traditional plans, fewer than 20 percent of the workers get 80 percent of the benefits. They say cash-balance plans distribute benefits more democratically and better serve today's workers, who are likely to change jobs many times.

Critics say companies implement cash-balance plans to cut costs, and often rely on the complexity of pension calculations to hide that fact from workers.

"A lot of workers do not know what is happening to them," said Rep. Bernard Sanders (I-Vt.). Sanders and other members of Congress proposed legislation that would require employers that convert to cash-balance plans to give workers the option to remain in old plans.

Workers from companies such as International Business Machines Corp. and AT&T Corp. testified that when their employers implemented cash-balance plans, their retirement benefits were reduced by as much as half.