In an effort to boost retirement savings, President Clinton proposed a series of reforms Thursday to make it easier for small businesses to create pension funds.

In the Rose Garden, surrounded by small-businessmen, the President urged Congress to create a small-business 401(k) plan, raise the earnings cutoff to $100,000 for individual retirement accounts, and eliminate rules that make it tough for employees to roll over pension accounts when they switch jobs.

"We have to create an environment where ordinary American workers can look forward to the future," Mr. Clinton said.

The President said such legislation should enjoy broad bipartisan support. But while banking industry officials welcomed the plan, they gave it little chance of passing in an election year.

"Any proposal encouraging long-term savings is good for the banking industry because you have a shot to develop new core deposits," said Kenneth Guenther, executive vice president of the Independent Bankers Association of America.

But Mr. Guenther said passage would depend upon Bob Dole, the Senate majority leader and presumptive Republican presidential nominee. Sen. Dole must decide whether working with the President would help his campaign, the trade group leader said.

"It is within the realm of possibility that this could become an all- encompassing legislative package," Mr. Guenther said. "The odds don't favor it, but you can't rule it out."

Aides to Sen. Dole declined to comment. But Rep. Bill Archer, chairman of the House Ways and Means Committee, said the GOP has advocated similar proposals for years. "I welcome the President to another Republican dance, although he has shown up late once again," the Texas Republican said.

Edward L. Yingling, executive director of government relations at the American Bankers Association, cautioned that the proposals might be derailed if they get caught up in the larger battle over tax reform.

Despite their dim legislative prospects, the proposals should get banks' support, according to Judy McCormick, the ABA's senior trust counsel. Banks likely would capture much of the new pension business because they already have lending relationships with small companies, she said.

But some bankers questioned whether small businesses generate enough revenue to afford pension plans.

"It is always in our business interest when the government creates additional avenues for retirement savings," said Theodore A. Miller, a principal at State Street Global Advisors in Boston. "But people would have to study the details and see if small business would take advantage of it."

The small-business 401(k) would let employees contribute up to $5,000 a year tax-free right away. Current law requires an employee to work for a year before being allowed to contribute to a plan. Employers could either contribute 3% of the worker's salary outright or match employee contributions up to 5% of salary. The 401(k) provision also would replace reams of forms with a single page.

The plan also would permit workers to dip into IRAs to pay tuition, buy a first home, or cover major medical bills. It also would require plan administrators to report missing funds promptly, and it would ensure that employees don't lose pension benefits when they change jobs.

Pension reform is not a new topic. Many of Thursday's proposals have appeared in previous legislation. For example, the expanded IRA was part of President Clinton's middle-class tax cut proposal, and the small-business 401(k) came out of Vice President Al Gore's Reinventing Government initiative.

Banks supply back-office support, investment advice, and custodial service to retirement plans. They also manage $3.8 trillion of pension funds.

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