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In all the debate over Enron, no one is confronting a much larger issue raised by the scandal: the day is quickly approaching when millions of Americans will not have enough money when they retire, even if they escape the losses that so many Enron employees suffered.

Americans have traditionally relied on Social Security and, whenever possible, company-paid pension plans to support them in old age. Social Security still holds up its end. But the company plans are disappearing, and their replacement, 401(k) accounts, which people use to save for their own retirement, are falling short. Many Americans are simply not saving enough.

The Enron debacle made painfully clear how easy it is for employees to lose their 401(k) savings, particularly if the money is invested in one company's stock and the stock tanks. Congress is considering legislation that would prevent such risk.

What Congress is not considering, however — at least not publicly — is whether 40l(k) savings are enough, even when they are well invested. In fact, Labor Department data show that the average balance in such accounts is too meager to pay for more than two or three years of retirement.

Is there a better way? Most pension experts and many economists say there is. The political winds, however, are blowing hard against them. After all, Democrats and Republicans alike have embraced the view that too much of the national income already goes to older people, mainly through payroll taxes for Social Security. Better to divert some of this money to education, the military, highways and the like, the thinking goes, and make up any retirement shortfall by pushing people to save enough on their own.

Corporate America has certainly lobbied for this approach; companies have found that 401(k) accounts are less expensive to support than the old company-guaranteed pensions, even allowing for company contributions to the 401(k) plans. And the Bush administration, pushing to convert some of Social Security into private savings accounts, issued a report recently that encouraged people to increase their savings and learn to invest them wisely.

"We as a nation have chosen to have a voluntary retirement system" as the second-tier pension on top of Social Security, said Alicia Munnell, director of the Center for Retirement Research at Boston College. "The problem is, there are a lot of ways to fall through the cracks."

That second tier has mushroomed. Congress authorized 401(k) accounts in 1978, allowing workers to defer taxes on retirement savings. The intent was to supplement company plans, not displace them. But that is what is happening. By 1998, the latest year for which Labor Department figures are available, 27 percent of the more than 100 million privately employed Americans had 401(k) accounts to supplement Social Security in retirement. An additional 15 percent had both 401(k)'s and company-paid pensions. Yet the percentage of workers with only a company-paid pension on top of Social Security plummeted to 7 percent in 1998, from 28 percent in 1979.

During this period, no group has had more time to accumulate savings in 401(k)'s than people now in their late 50's and early 60's. Some in this age group have built their accounts into rich nest eggs, but many others have not. Inadequate incomes, imprudence, unlucky investments, college costs, alimony, layoff, self-indulgence — all these factors help explain the failure to save enough. By 1998, the average amount accumulated by this group in 401(k) accounts was only $57,000. That represents less than four years of monthly pension payments paid out in a typical company-paid plan.

"I have looked at people who have exactly the same income, and the amount of variation in what they save is enormous," said James P. Smith, a labor economist at the RAND Corporation, a research organization. "There are people with low incomes who save more than people with high incomes. The fact is that some people are prudent and others are not."

For Mr. Smith, the combination of Social Security and individual retirement accounts is sufficient to get 80 percent of the population through retirement with pensions equal to 50 percent or more of preretirement income, a standard for an adequate retirement. The 20 percent who are falling through the cracks are the only issue for Mr. Smith. "That is the debate that is not taking place," he said.

But other economists and pension experts argue that the answer to the unasked question, "Is there a better way?" should provoke a much broader debate. While Mr. Smith wants to talk about encouraging saving and providing a safety net for the destitute, other experts favor an alternate approach in which employees would pool their retirement savings. From these pooled savings, pensions would be paid in fixed amounts promised in advance.

Social Security already operates this way, in effect pooling savings through payroll taxes. Company-paid pension plans are also pooled systems in which companies commit themselves to pay the promised pensions to retired employees, drawing on money that would otherwise go into wages. These pools can also be set up by occupation or industry — all lawyers or all carpenters, for example.

Still another idea is to enrich Social Security, creating a pension system similar to those in Europe.

The greatest advantage of pooled savings is almost never mentioned in public debate: these pools essentially operate as insurance plans. When a retiree dies at, say, age 68, the money accumulated in the pool to pay his pension is channeled to retirees who live longer. People who depend on individual 401(k) accounts, in contrast, must each save enough to finance many years of retirement.

Teresa Ghilarducci, an economist and pension expert at the University of Notre Dame, has made a rough calculation of the lower costs embedded in pooled savings plans. If 10 people who reflect the life spans of the general population were to pool their savings, she says, the required amount would be 23 percent less than if each of the 10, expecting to live past 80, saved for retirement in individual accounts. Projected nationally, that amounts to hundreds of billions of dollars that would not have to be raised for retirement.

What people do hear about, on the other hand, are the costs borne by taxpayers — not only to sustain Social Security but to guarantee that pooled private pension plans pay off as promised. By law, companies are required to pay insurance premiums to federal agencies so that in emergencies — a bankruptcy, for example — pensions can be paid out of federal coffers.

The company-paid plans first appeared during World War II. Wage controls limited raises and the pension plans became an indirect way to increase pay packages. The plans flourished and spread in the prosperous decades after the war, and so did Social Security coverage. Then, in the late 70's, the 401(k) appeared, and with it the growing pressure for people to save for their own retirement.

"Common sense dictates that we are going in the wrong direction and everyone in the pension business knows this," said Karen Ferguson, director of the Pension Rights Center, "but it is not in anyone's political interest to say so publicly."

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