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Tax deductions for employers' contributions to pension funds and tax-deferral on the funds' investment income have long been sacrosanct.

And thanks largely to the booming 1980s stock market, the pension system is flush: Nearly half of private pension plans have $1.50 for every $1 they need to satisfy future obligations. Those riches may be too much for tax policy-makers to ignore.

Sens. Robert Dole and Nancy Kassebaum (both Kansas Republicans) believe the tax-free status encourages pension managers to trade stocks and other assets too often.

That, they contend, exacerbates market volatility and retards long-term corporate planning.

Their remedy: a 10 percent tax on gains from the sale of assets held 30 days or less; 5 percent on profits from assets held 31 to 180 days.

And, some officials within the Treasury Department question whether pensions merit such special tax treatment, reports Robert Shultz, an Atlanta consultant who has managed pension assets for IBM and RJR Nabisco.

"Were I trying to balance the government's books, the biggest revenue loss certainly could not pass unnoticed," says Shultz.

A tax on pension contributions or other employee benefits would reduce inequities between low-income workers, who get mostly wages, and those whose pay includes big fringes and lots of deferred income, argues Alicia Munnell, senior vice-president of the Federal Reserve Bank of Boston.

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