The retirement accounts have had less appeal and spottier success than Bush plan's projections.

Bush has argued in campaign-style events from Fargo, N.D., to Blue Bell, Pa., that Social Security account holders could make more money for retirement on their own than they can count on from the New Deal-era fixed-benefit program. 

But when Nebraska's state and county workers were given do-it-yourself accounts, they made so many investment errors that they ended up making less than colleagues with fixed-benefit pensions - and less than what analysts have said is needed for old age. Their poor performance led the Nebraska Legislature two years ago to junk the accounts for new employees.

While Americans are just beginning to grapple with the president's proposal for private accounts, employees and retirement officials in Michigan, Montana, Washington, West Virginia and other states have discovered that the accounts can fall far short of their promise. Their experiences sound a cautionary note for Bush as well as for California Gov. Arnold Schwarzenegger, who has proposed switching public employees to private accounts starting in 2007.

The accounts Bush is proposing are not a precise match to the ones states have offered in recent years. And the low signup rate for accounts among state workers may be partly because more of them are covered by generous pensions than are American workers generally, so they may feel less need for the accounts. But the tepid response to accounts in some places casts doubt on one of the central premises of the Bush plan: that Americans are clamoring to join the investor class.

The poor performance of many of the accounts leaves experts to wonder whether most people, even among those who want to make their own retirement investments, have the time or knowledge to do so successfully. 

"If people have private accounts in Social Security and they're left to make the decisions themselves, the results likely will not be positive," said Anna Sullivan, executive director of the Nebraska Public Employees Retirement Systems, which replaced its private account system with a centrally managed plan in 2003.

Joseph Jankowski, executive director of the West Virginia Consolidated Public Retirement Board, said: "The vast majority of people don't have the inclination or comfort level to be responsible for their own retirements." West Virginia board officials are debating whether to drop the state's private account plan as Nebraska did.

The president's plan assumes that two-thirds of working Americans under 55 - an estimated 90 million people - would quickly choose to take a substantial chunk of the payroll tax money that now goes to Social Security and shift it into private investment accounts beginning in 2009. (Those 55 and older would not be eligible for the accounts.) 

But of more than 1.5 million public employees offered the choice of accounts at various points in the last decade, about 125,000, or 8%, have signed up. The lion's share of those were during the stock market boom of the late 1990s. The sign-up rate in many of the states has been about 5%.

White House aides said the two-thirds estimate was based on a 2001 Social Security Administration analysis of an account arrangement similar to, if somewhat more generous than, Bush's current proposal. But they said they saw no problems if the accounts were to draw a lower sign-up rate.

"The president has made it very clear these accounts would be strictly voluntary," said deputy White House spokesman Trent Duffy. "If an individual wants to pursue the benefits that we believe are present . that's fine," but the White House plan doesn't require high participation.

The White House argues that Social Security will probably require painful cutbacks to avert financial ruin. And it hopes private accounts would help ease the pain when benefits from the traditional part of the system are reduced.

"The personal accounts are the only thing that makes this whole effort worth doing," said Grover Norquist, a leading proponent of private accounts, who is president of the advocacy group Americans for Tax Reform.

Social Security and traditional pensions are "defined benefit" systems, meaning that the worker is entitled to a predetermined level of benefits; the employer or the government - not the individual - manages the money, bears the economic risks and makes sure people get certain, fixed benefits in retirement.

By contrast, the accounts that Bush and Schwarzenegger are proposing would be "defined contribution" arrangements similar to today's 401(k) plans. In these plans, the employer's responsibility ends with a fixed contribution to a worker's account. From there on, it is largely up to individuals to bear the risks and reap whatever rewards result by the time they retire.

Among the states, by far the biggest test of private accounts' popularity in recent years has come in Florida, where Gov. Jeb Bush, the president's brother, proposed replacing public employees' defined benefit pensions with a mandatory defined contribution plan.

Although the governor eventually compromised on a voluntary plan, state officials still predicted a stampede. Early surveys of Florida's 600,000-plus public employees suggested that more than half would go for accounts. But since the accounts' introduction in 2002, 43,000 employees, or about 7%, have enrolled.

"The stock market can't be trusted the majority of the time," said John Miller, a 44-year-old clerk with the state's Department of Highway Safety and Motor Vehicles in Tallahassee who chose not to take up the governor's offer.

A review of other states' experiences turned up a pattern strikingly similar to Florida's. Even when states offered big inducements, the response to accounts has been generally anemic.

. When Michigan quit offering its traditional pension program to new employees in 1997 and replaced it with defined contribution accounts, it gave existing workers the right to switch to the new plan. Despite the state offering to contribute generously to the accounts, about 3,000 workers out of 57,000 signed on, according to state officials.

. When Ohio offered its teachers in 2001 and later its state and local workers the choice of a pension, an account or a hybrid plan (combining a pared-down pension with an account), fewer than 5% picked accounts.

. When Montana made a similar offer to 30,000 state workers in 2002, it spent $1.5 million to set up the new system, conducted more than 600 seminars and gave people a year to decide. The result, according to Michael J. O'Connor, executive director of the state's Public Employee Retirement Administration: 900 chose accounts. 

"Generally, people don't like risk," O'Connor said of the poor showing in Montana.

Other states, such as Oregon, North Dakota and South Carolina, have also turned to accounts recently. But in these instances employees were either required to sign up or the accounts were offered only to comparatively small groups.

Asked about the cold shoulder given accounts by public employees, account advocate Trevor Martin, an official with the conservative American Legislative Exchange Council, said: "There's no harm in offering them the option." 

Sooner or later, Martin predicted, workers will "want to be in control of their own money and can do a better job of taking care of it than the government."

In California, Schwarzenegger's chief aim is to get the state out from under future pension obligations. The governor wants to terminate pensions for all those hired after mid-2007. But to cut expenses in the short term, he also is counting on 15% of existing employees to opt into private accounts.

In switching to investment accounts, many states have hoped to save money, as Schwarzenegger is proposing. But some, including West Virginia and Michigan, have seen no savings or have lost money so far on the switch.

And when it comes to people's investment abilities, state retirement officials have plenty of stories about how ill-prepared most workers are to handle the financing of their own futures.

"We get individuals into our training sessions and ask them about basic investment terms - What is a stock? What is a bond? - and they rate themselves as practically unknowledgeable," said Washington state retirement director John F. Charles. 

The result, Charles and others said, has been a series of investment choices that officials fear will leave many workers without adequate funds after they retire.

In Washington state, workers' decisions on accounts seem to have been heavily influenced by stocks' immediate performance, rather than a long-term perspective on their investments.

In 1996 and 1997, when the stocks were climbing, more than 75% of teachers picked a hybrid plan that included an individual account, rather than sticking with traditional pensions.

In 2002 and 2003, after the market had crashed, about 14% of public employees signed up for the hybrid plan.

In West Virginia, teachers who shifted from pensions to accounts plowed 40% of their money into investments so conservative that they effectively ensured that they would get a pension-like payment in old age - but at a lower benefit level than in the system they had left behind.

In Montana, those who chose accounts allowed the majority of their money to flow into a default investment set by the state, a balanced fund of half stocks and half bonds.

While that may seem like a sensible decision, O'Connor said that it showed account holders were not actively managing their money. That freedom was one of the chief arguments for setting up the accounts in the first place.

But it is Nebraska that has provided perhaps the most telling experiment in private account investing.

The state pioneered accounts for public employees in 1964 but restricted them to state and county workers. Teachers, judges and others were left in traditional pensions, where, in contrast to the accounts, their assets were professionally managed. 

Three and a half decades later, in 2000, a consultant working for the state discovered that individual account holders were making 6% to 7% a year on their money while the investment professionals who handled the state's pension assets earned 10.5% to 11%. 

The Nebraska Legislature reacted by dropping the accounts for all employees hired after January 2003, in favor of a centrally run "cash balance" plan that guarantees a minimum of 5% a year and can deliver higher returns depending on how its managers do. During the first year, the accounts earned 8%.

"People weren't eating, sleeping, drinking investment all the time, so they didn't get the results the professionals did," said Sullivan, the state retirement director.

"Our lives are so full. Who has time to pay a lot of attention to . everything that goes into investing?"

*
Unpopular option

Given the choice of state-managed pensions or individual retirement accounts, public employees have tended to reject the accounts. Here's how the individual accounts option has fared in several states:

Montana: 30,000 public employees were given the two options; after a one-year enrollment period and hundreds of seminars, 3% chose individual accounts. 

Nebraska: The state, which first offered individual retirement accounts in the mid-1960s, found account holders were doing substantially worse than those with pensions. It dropped the accounts in favor of a more traditional arrangement.

West Virginia: After switching teachers' retirement from pensions to accounts in 1991 to cope with a funding problem, the state is now debating whether to switch back. It found the original change did nothing to solve the funding shortage and ultimately cost more money.

Washington: Given the option of trading traditional pensions for a hybrid plan - a combination of a pared-down pension and a private account - 75% of teachers chose the hybrid when the stock market was climbing; 14% of public employees chose it after the crash.

Michigan: Of 57,000 workers eligible to pick between traditional pension plans and individual accounts, about 3,000 chose accounts. 

Ohio: About 5% of eligible state workers have opted for retirement plans based partly or entirely on individual accounts.

Florida: Given the choice of keeping a traditional pension or moving to an investment account or a hybrid plan (an account with a pared-down pension), 7% of workers picked the account-only option. 

Source: Times interviews with state retirement officials