Michelle Bachelet is a pediatrician and a Socialist, while Sebastián Piñera is a billionaire businessman and a conservative. They may agree on little as the opposing candidates in Chile's election for president, but they concur on one important point: the country's much vaunted and much copied privatized pension system needs immediate repair.

The Chilean system of personalized accounts managed by private funds has inspired a score of other countries since the pioneer effort to create it here 25 years ago. It is endorsed by President Bush, who has called it "a great example" from which the United States can "take some lessons." Here at home, though, dissatisfaction with the system has emerged as one of the hot-button issues in the election, a runoff that will take place on Sunday.

"Most people perceive the costs of pensions and the pensions themselves as unfair," said Patricio Navia, a political science professor at New York University and at Diego Portales University here. "Many of those who started work when the system was first adopted are realizing that they have not been able to contribute enough to get a significant pension," Mr. Navia said, adding that they resent "overhead costs that are so high" and that have led to record profits for the pension funds that manage contributions automatically deducted from workers' paychecks.

Ms. Bachelet, the front-runner in the race, has described the pension system as being "in crisis" and has vowed to take steps to fix it. Among the ideas being considered in her camp are increasing and expanding the minimum pension, as well as measures to allow individual contributors to "bundle" together into larger groups so as to be able to negotiate better terms with pension funds.
"There are two big issues, coverage and costs," Andrés Velasco, Ms. Bachelet's economic adviser, said in an interview here. "Too many people are outside the system," he said, adding that too many of those in the system have found that "saving via the pension funds is quite expensive."

According to a recent study here, Chile's pension funds, whose number has shrunk to 6 from more than 20 as competition has diminished, recorded an average annual profitability of more than 50 percent during a recent five-year period. Other studies, including one conducted by the World Bank, indicate that pension funds retain between a quarter and a third of workers' contributions in the form of commissions, insurance and other administrative fees.

At the moment, the government pays about 5 percent of gross domestic product, or more than it spends for either health or education, on pensions for the poor, payments into a separate military retirement plan and so-called transition and administrative costs. Supporters of the privatized system argue that the state's burden will diminish as older retirees enrolled in the pay-as-you-go system that prevailed here before 1981 gradually die off.

But skeptics point to another developing problem: many young people, who should be enrolling in the system early to accrue maximum benefit, are staying out or paying in very little. Some cannot afford to contribute beyond the obligatory minimum payment, which is 10 percent of wages, while others are either self-employed or have been hired by companies as low-paid independent contract workers and therefore do not have to contribute at all.
"The bottom line is that this system does not work with this labor market," said Andras Uthoff, an economist who is director of the social development division of the United Nations Economic Commission for Latin America here. If trends continue, he added, "only a small percentage of people are going to be able to finance meaningful pensions. What happens then to the rest?"

As a result of such doubts, attacking the pension system and especially the perceived excesses of the funds has become a surefire source of votes. One of the big winners in the first round of the election last month, for example, was Guido Girardi, a senator-elect and Bachelet supporter who has taken upon himself the role of scourge of the private management funds.

"I am going to do away with these thieves in jackets and ties," Mr. Girardi vowed. "We are going to defend the citizenry from these funds that rob people of their pensions."
But even advocates of an untrammeled free market, like Mr. Piñera, the conservative candidate, are jumping in with criticisms, to the surprise of some here. Mr. Piñera is the brother of José Piñera, the former labor minister who imposed the personal account system during the dictatorship of Gen. Augusto Pinochet. In addition, Sebastián Piñera is backed by the large business groups that control the pension funds and have benefited from the expansion of investment capital the funds have provided.

"Chile's social security system requires deep reforms in all sectors, because half of Chileans have no pension coverage, and of those who do, 40 percent are going to find it hard to reach the minimum level," Mr. Piñera said in a televised debate with Ms. Bachelet on Wednesday. "This has to be confronted now, and we agree with Michelle Bachelet and will, I hope, join forces behind this large undertaking."

One of the changes Mr. Piñera has proposed is a guaranteed pension for housewives, which the Bachelet camp dismisses as populist posturing that will add to government expenditures. He also favors financial incentives to the poor, like matching government contributions, to encourage them to participate in the system; more bargaining power for consumers; and increased competition among the funds to force them to bring down their fees.
"We don't want to dismantle the system; we just want to improve it," said Felipe Larraín, Mr. Piñera's chief economic adviser. But "pensions are very low," he acknowledged, and reform is "not just an issue of fixing the pension fund management system, because there are also people who cannot get an adequate pension" based on the contributions they are making.
José Piñera, who is co-chairman of the Project on Social Security Choice at the conservative Cato Institute, based in Washington, did not respond to e-mail requests for an interview to discuss the changes being proposed here. But his Web site reprinted a recent article in the conservative daily newspaper El Mercurio here that criticized the changes proposed by both candidates as "demagoguery."

Officials in the Bachelet campaign said Ms. Bachelet had already decided to appoint a commission to examine the social security system and recommend changes if she is elected. They predicted that legislation to overhaul the system would be presented to Congress within six months of her taking office in March."It's a big reform, not just patching a few things up," Mr. Velasco said. While the rest of the world is still enamored of the original Chilean model, he noted, "we are moving to a Chile II model, and there is no blueprint for us to follow. We have to create from scratch."