The House subcommittee charged with reforming Social Security will hold a hearing this morning to explore how other countries have transformed their ailing public pension programs. What the subcommittee hears is likely to make many Americans jealous. We’re missing out on opportunities workers in other countries have been enjoying for years.

At least 19 countries have shifted to some version of the personal-account system President Bush has proposed. A few of these programs have been up and running for two decades, but the pace of reform has quickened noticeably in recent years. And all kinds of countries are doing it, from nations like Britain (1986) and Sweden (2001) to developing countries like Chile (1981) and Lithuania (2004).

Australia has adopted a strong mandatory personal account system. Sweden reformed its traditional “pay-as-you-go” plan to more closely resemble personal accounts and added an option to assign a small portion of payroll taxes to investment accounts. Kazakhstan has completely privatized its pension system. The United Kingdom has a hybrid system. As more countries cope with graying populations, even the World Bank advocates reforms that include a personal account component.

The gold standard of pension reform is Chile, which has the oldest personal account system, and thus offers the most insight into how well one would work. In response to a mounting crisis in the overly generous old state-run program, Chile in 1981 started giving workers the option to shift their payroll taxes into private accounts. According to Ian Vasquez of the Cato Institute, who will testify at the hearing, most workers opted for the private alternative, so that today only about 3% of Chileans still participate in the remnant of the old system.

Switching was a wise decision for workers. The average annual return on personal accounts has been 10.2% above inflation. That rate isn’t sustainable over the long term; it reflects the rapid growth of Chile’s economy. But economist Estelle James noted in a February Washington Post column that even if one assumes a more realistic real return of 4.9% and real wage growth of 2%, Chileans retiring at age 65 still cash out 60% of their final wages plus a survivor benefit for their spouses. That compares to the 42% of final wages American Social Security currently pays.

Americans enjoy several key advantages over other countries that have already reformed their pension systems. We have highly developed capital markets capable of absorbing the new investment. We also have a platform of professionals experienced with this type of account, thanks to our booming market in 401(k) retirement accounts. That’s no small consideration, since many of the criticisms the House subcommittee will hear of these foreign programs are likely to stem from problems other countries have had in setting up the administrative apparatus for personal accounts.

But, in crafting a reform proposal, American lawmakers have the advantage of learning from the mistakes of others, notes David John, a research fellow at the Heritage Foundation who is on the witness list today. Such mistakes include providing a bewildering array of more than 600 plans (a Swedish problem) or not properly regulating brokers selling individual account investments (the cause of a scandal in Britain in the early 1990s).

One thing that is clear is that, while many countries continue to grapple with the insolvency of their old pay-as-you-go pension systems, countries that have reformed are on a solid footing. The Democrats are always talking about how America ought to copy the policies of other countries when it comes to things like health care and taxes. Let them take a look at pensions, where foreign countries are breaking successful ground.