Washington ? The Bush administration said Monday that it would scrap — for now — a proposed rule that sought to ensure that highly-paid workers aren’t unduly favored when companies switch to a new type of retirement plan.

The provision was contained in a broader proposal that companies would follow when they convert traditional pension plans to “cash balance” plans. Critics say cash balance plans hurt older workers.

The Treasury Department and the Internal Revenue Service said the broader proposal, which among other things advises companies how to avoid age-discrimination lawsuits when switching to cash balance plans, would not be affected by Monday’s action.

Plan conversions typically mean less money for workers close to retirement and have been the subject of a rash of lawsuits.

The provision jettisoned Monday said companies, in setting up cash-balance plans, “may not provide disproportionate benefits to highly compensated employees.”

Treasury said that the proposal would have made it hard for companies — wanting to make the switchover — to provide certain workers with pension options, such as how they would want to accrue future benefits or whether they would want to be grandfathered under the traditional pension plan.

“The proposed nondiscrimination regulations would have had the unintended effect of making it more difficult for employers to provide workers with transition relief in cash balance conversions,” said Pam Olson, Treasury’s assistant secretary for tax policy.

The government said it intended to rework the provision.

Rep. Bernie Sanders, I-Vt., applauded the decision.

He will introduce legislation today requiring companies that convert to cash balance plans to allow most workers to stay in their traditional pension plans.