A funny thing happened after President Bush backed away from his effort to replace guaranteed Social Security benefits with private accounts. The U.S. Social Security system, deemed backward and patriarchal by administration critics, suddenly is being pointed to, implicity if not explicitly, as a model safety net—just what countries like Chile and Britain need as they struggle to fix their malfunctioning private account based pension systems.

Reports from distinguished investigators—the World Bank in Chile and the recently released Turner Report in Britain—have suggested independently that those countries need to introduce a universal, guaranteed minimum benefit, financed by general revenues. These investigators conclude that the private account systems that were held up by the Bush administration as examples of how to do it right are really doing it wrong.

What is more, the problems of private accounts in Chile and Britain are exactly the sort of problems critics of privatization predicted.

First, both countries found that the residual government safety net, which they had expected would fade away as private accounts provided handsome retirement income, is as essential as ever. In fact, over time, more and more retirees need public assistance to stay out of poverty.

In Chile, a large proportion of the workforce has entered and left employment repeatedly, accumulating little in private accounts. Coverage of private accounts has settled at about half of the workforce. In Britain, the government projects that the proportion of retirees on public assistance in 2050 will reach 70 percent. Without a continuing public safety net, half of retirees or more would face poverty in Chile and Britain.

Second, one of the principle reasons for the poor record of private accounts is that these accounts proved very costly to set up and manage. Just as critics had warned, small accounts of low earners lose a large part of any accumulation to management fees.

Third, the fact that the residual anti-poverty program in place today in Chile and Britain is means-tested creates a powerful incentive for low income workers not to save. After all, if private account balances simply reduce public assistance, why save for retirement? A universal system, in contrast, does not punish savers by reducing their basic pension.

So Britain and Chile are now studying how to reintroduce universal minimum retirement benefits combined with incentives to accumulate private saving. If they want to send delegations to see how to run a system that provides universal minimum retirement benefits at astonishingly low cost, I am sure our Social Security Administration would welcome them.

Bernard Wasow is a senior fellow at The Century Foundation.