Teacher Crystal Mendez was in the staff lunchroom at 42nd Street Elementary in Los Angeles when an investment broker introduced herself and started talking up a retirement plan.

Mendez thought she could trust the woman because the investment company had been endorsed by the teachers union. Mendez agreed to put $400 a month into a retirement account. She assumed her money would be invested in stocks. Just 22, she figured she had time to ride out dips in the market.

Two years later, when her boyfriend bragged about returns he was earning on his 401(k), Mendez looked at her own account.

"He was earning 15 percent a year and I was earning 3 percent," she recalled. "I thought, 'There's something wrong here.' "

Mendez's money was languishing in a fixed-rate annuity, an investment ill-suited to someone in her early 20s. Worse, she would have to pay 10 percent to bail out, which she did, reluctantly.

Public-school teachers across the country are in similar predicaments. And many have their unions to thank for it.

Some of the United States' largest teachers unions have joined forces with investment companies to steer members into retirement plans that frequently have high expenses and mediocre returns. The unions endorse investment providers, even products, and the companies reciprocate with financial support. They sponsor union conferences, advertise in union publications or make payments to union treasuries.

The investment firms more than recoup their money through sales of annuities and other high-fee products to teachers for their 403(b) plans — personal retirement accounts similar to 401(k)s.

New York State United Teachers, for instance, receives $3 million a year from ING Group for encouraging 525,000 members to invest in an annuity sold by the Dutch insurance giant.

The National Education Association, the largest teachers union in the U.S. with 2.7 million members, collected nearly $50 million in royalties in 2004 on the sale of annuities, life insurance and other financial products it endorses.

Teachers unions across the country — including statewide teacher associations in Pennsylvania, Michigan and Oregon — have struck their own endorsement deals. Unions in Dallas, Miami, Phoenix, Seattle and Atlanta, among others, refer members to products approved by the NEA and receive a share of endorsement revenue in return.

Many teachers presume an endorsement means their union has used its clout to get the best price, as unions do on products ranging from eyeglasses to automobiles. But when it comes to retirement accounts, union backing is often a sign that the product will cost more, not less.

Buyers of an NEA-endorsed annuity sold by Security Benefit Life Insurance Co. pay annual fees totaling 1.73 percent of their savings — 10 times as much as they would pay with 403(b) plans available from Vanguard Group, T. Rowe Price and other low-cost mutual fund providers. The costliest option in the NEA-endorsed plan charges 4.85 percent a year. An investor would have to earn a return of nearly 5 percent just to break even.

Union leaders defend the endorsement deals and high-fee annuities. They say that teachers get advice from brokers and financial advisers, and that the companies' contributions to unions pay employee salaries and other expenses.

Yet no one disputes that this money comes out of teachers' pockets.

"The nature of the marketplace is such that you have these little under-the-table payments, or whatever you want to call them, and a good-old-boy network that really works against the teachers," said Mark Fischer, who designs and manages retirement plans.

The 403(b) accounts are key to teachers' financial security. Most count on receiving pensions when they retire, but many are not covered by Social Security.

For that reason, Congress in 1958 allowed teachers and other nonprofit employees to establish savings accounts under section 403(b) of the tax code. Today, an estimated $607 billion is invested in these accounts.

As with a 401(k), the nest egg grows tax free until the owner retires and starts making withdrawals. But there is a key difference. In the private sector, employers sponsoring 401(k) plans are required to screen investment options and make sure employees have good choices. School districts are under no such obligation. Most leave it to teachers to find their own investments.

As a result, insurers, mutual fund companies and financial planners compete for teachers' money, touting a bewildering array of products. A union endorsement confers an advantage, allowing a provider to stand out from the crowd.