Many companies used the threat of loss of a retirement pension as a deliberate strategy to bind workers to their companies and prevent labor mobility. Under the Clark Amendment, for companies who opted-out of Social Security, this traditional problem would continue to afflict their employees. The third concern with the Clark Amendment again involved the issue of universality. Another virtue of the national Social Security system is that the eligibility rules are the same for everyone, in every industry, in every part of the company. This is certainly not the case for company pensions.
Companies can design pension systems with all sorts of idiosyncratic eligibility rules.
Indeed, there was a history in America of abuse of this freedom by companies who deliberately crafted their eligibility rules in such a way as to make it virtually impossible for their workers to ever actually qualify for a pension. There were also many reports of companies who, on some pretext or other, would dismiss older workers who were on the verge of qualifying for their pensions. This sort of problem would continue to be present for workers in companies which opted-out of Social Security under the provisions of the Clark Amendment. In insurance programs the insurer has to worry about claimants for benefits who present phony claims. Indeed, this issue was the focus of the debates over the Clark Amendment in the Conference Committee.