Retirement funding should be a big issue.

WHY aren't 401(k)-type plans one of the top issues in the U.S. presidential election?

The 401(k) is at the nexus of a looming crisis in retirement funding and a silent centerpiece of President Bush's "ownership society." The problem is, we don't truly control our 401(k)s. And the way they are designed, few people take full advantage of their tax-deferred savings power.

That doesn't mean the 401(k) is a useless vehicle. On the contrary, it can be enhanced to meet future savings needs if employers and lawmakers ever get on the same page.

"Talk of 401(k) reform sounds great," says Adrian Nenu, an investor and deputy sheriff from Tampa, Fla. "But the huge, fatal flaw remains: Employers and plan vendors control the-accounts. This means that investors must negotiate, beg and plead with employers and vendors to offer better diversification and lower fees."

"Unfortunately," says Nenu, who has been battling his employer for years to offer a better retirement plan, "most investors are totally clueless and/or too intimidated to demand real plan reform."

Originally designed as a supplement to other pension plans, 401(k)-type plans now cover 70 percent of all workers, according to the U.S. Department of Labor.

As 401(k)s have grown from covering 7.5 million workers in 1984 to more than 42 million today, its counterpart--the guaranteed defined benefit pension--has gone from covering more than half the workforce to only 35 percent.

That means the majority of the workforce is fending for itself in the realm of retirement planning with little or no investment education.

Meanwhile, retirement planning and Social Security have become political dodge balls. Congress has yet to agree on a plan to address either issue for the next generation.

By 2030, the number of elderly U.S. citizens is projected to increase 80 percent. Social Security and Medicare will need to increase spending by 75 percent to meet the crunch of 77 million baby boomers. Under the present pay-as-you-go funding structure, benefits will either have to be cut or taxes and retirement ages raised if these programs are to stay solvent for retiring baby boomers, who will start hitting age 65 in 2011.

Because Social Security won't meet the needs of future under-saving retirees by itself--it was never designed to be a full pension plan--it's essential that defined contribution plans like 401(k)s be bolstered.

The major stumbling block with defined plans like 401(k)s, 403(b)s and 457s, though, is that no employer is required to offer them, compel contributions or add matching funds. As a result, many small employers don't have them and almost half of the U.S. workforce has no employer-offered pension at all.

The voluntary nature of the 401(k) has resulted in severe shortfalls in retirement saving. It's estimated that the average 401(k) balance for those 55 and over is $46,000, according to the Vanguard Group, the second-largest mutual fund firm.

A combination of longer life spans and poor retirement savings habits will thrust many into poverty if the current system remains unchanged.

Four essential items for retirement reform would be adding automatic contribution features, fixed asset allocations (you don't have to pick the funds), customized advice and guaranteed accounts.

Employers are slowly adding customized professionally managed investments to their 401(k)s, which are still a rarity. Some 21 percent of employers offered these options in 2003, up from 13 percent in 2000.

The savings shortfall is easily addressed by making retirement contributions automatic through employer plans. Yet only 8.4 percent of companies offer this feature.

Even with the "free money" of employer matching funds, employees aren't saving as much as they might. Each year workers fail to take matching contributions worth some $30 billion.

With personal income not keeping up with the cost of living, retirement savers are clearly falling behind. The U.S. Census Bureau reports that since 2000 the median family income fell by $1,535 to $43,318. Simply carving individual accounts from Social Security contributions won't solve the savings shortfall.

Improving existing retirement programs and helping lower-income savers makes more sense.

Mandatory automatic enrollment should be required by law, along with new subsidized accounts for those without employer-based accounts or those falling below the poverty line.

If you find the political process disappointing, try your employer. Your company could add an "autopilot" option to automatically enroll you in the plan with set contribution levels, diversify your holdings between low-cost stock and bond index funds and offer you basic financial planning to see if you're on course for your age and risk tolerance.

It's time to move ahead and get serious about the 401(k) since it will increasingly become the only employer-offered pension program. Retirement security issues are like most chronic maladies if left untreated. They only get much worse over time.

John F. Wasik, author of "The Bear-Proof Investor," is a Bloomberg News columnist.