New FDIC Rules Prove Perplexing : Retirement: Pension fund managers say they can’t find out if deposits are fully covered under regulations that take effect today.

For all the sense that today’s new federal limits on deposit insurance make to the doctors at Sharlin Radiology Associates, the regulations might as well be Egyptian hieroglyphics.

Dr. Frank Gingerelli, a principal in the Hackensack, N.J., medical practice, says he and a variety of advisers couldn’t figure out what the new rules mean. Even officials at the Federal Deposit Insurance Corp. couldn’t answer such questions as whether the agency will continue to fully insure the retirement accounts for 27 Sharlin employees.

The rules, which take effect today in conjunction with tighter capital requirements for banks, alter deposit insurance coverage only for certain types of retirement, pension and profit-sharing plans. But the changes could strip FDIC protection from thousands of people with only small sums built up in their companies’ benefit plans.

About $955 billion in retirement funds--nearly 19% of all such money--are held in federally insured institutions nationwide, according to David Coughlin of Logos Investment Group, a Century City consulting firm.

“We wanted something safe, so we put our money into certificates of deposits in about two dozen banks,” Gingerelli explains. He now fears that he may have no way of knowing whether those deposits will continue to be safe.

Under current laws, each of Sharlin’s 27 employees is insured for up to $100,000, even though a single retirement account may hold $1 million or more. The coverage is said to pass through the account to each plan beneficiary.

But under the new rules, that pass-through insurance is available only if those managing the funds put the money in healthy banks--those in the top two of the FDIC’s five categories. Only the first $100,000 of accounts in lesser-rated banks is insured.

So, if a $1-million retirement account is put into a bank rated “significantly undercapitalized”--and if the bank failed--beneficiaries of the benefit plan would recover only $100,000 to split up.

Based on about four dozen calls it has been getting every day, the FDIC knows it has a big problem on its hands explaining the new rules. And the agency is ready to be flexible for a while in determining which retirement accounts are fully covered, said Andrew C. Hove Jr., acting FDIC chairman.

Professional money managers who handle multimillion-dollar funds typically have the expertise available to decipher the complicated regulations. But many small companies simply use their treasurers or office managers to place money at local banks.

“There is a concern that the average fund manager just has no way of comprehending this material,” said Caryl A. Austrian, an FDIC spokeswoman. “We’re trying to figure out just how we can get out more information.”

Most of the small business owners and fund managers calling FDIC offices want to know how to find out if their banks meet the requirements for the top two categories: “well capitalized” and “adequately capitalized.”

Hove said each bank is required to notify depositors by the end of June whether it qualifies to offer pass-through insurance.

But what happens if a bank fails without having first warned depositors?

That’s a problem, Hove acknowledges, and it’s why the agency plans to be flexible.