The Trump administration is examining Down Under for guidance on how to better the United States’ retirement savings structure.
President Donald Trump stated on Tuesday at the White House that his administration is investigating an Australian-style retirement scheme.
“We’re looking at it very seriously,” Trump remarked. “It’s a sound plan. It’s panned out very well.”
Australia’s main retirement savings program — known as “superannuation” — may have captured the notice of Washington officials.
How superannuation operates
Superannuation, or “super” for brevity, is Australia’s premier retirement savings mechanism.
Employers must finance employees’ savings accounts, which are put into chosen funds — termed super funds — that are inaccessible until retirement. The employer-funded deposits are made in addition to paying employees their standard earnings. Staff members may also add to their own savings accounts.
Employers must deposit the equivalent of 12% of a staff member’s earnings into these super funds — a progressive rise from 3% when the current superannuation program was introduced in 1992.
“There is no opting out,” Tim Jenkins, principal at consulting firm Mercer, informed CNN. “If you are employed, your employer must remit 12% of your salary to your retirement savings, and it’s inaccessible until you’re nearing retirement age with a few avenues to access along the way, but quite restricted indeed.”
Australia’s super funds represent the fourth-largest retirement savings reserve globally despite the nation’s standing as the 55th largest country by population figure, per JPMorgan Chase.
The aggregate superannuation investment reserve holds about 4.5 trillion Australian dollars in holdings (roughly $3 trillion).
Workers can select among diverse super funds. The funds are administered by expert financiers such as monetary entities, overseen by the government, and are placed across a variety of worldwide holdings from stocks to private equity.
Why it is favored
Australia’s superannuation initiative was launched to tackle worries regarding an aging populace and how to enable individuals to sustain themselves in later life.
“With an aging populace and diminishing birth rates, a framework such as this relieves the fiscal strain on subsequent generations,” Jenkins commented.
Australia’s retirement framework is rated B+ on the Mercer CFA Institute Global Pension Index for 2025. Comparatively, the United States is rated C+.
There exists also a governmental pension program that functions as a safety barrier for those needing added backing. Nevertheless, “super” is increasingly the chief retirement savings instrument.
The US approach
In the United States, employer-backed retirement schemes like 401(k)s — which were initially set up in 1978 — are voluntary. Employers offering 401(k) options have the discretion to decide whether to equal employee contributions.
Social Security, established in 1935 under President Franklin Delano Roosevelt, acts as the main means for retirement income. US laborers remit Social Security tax, which accumulates into a reserve that is dispensed to current retirees. Worries have been growing that Social Security reserves are on uncertain footing as the US populace ages.
Generally, Australia’s mandatory employer-funded investment savings arrangement contrasts with the US structure where voluntary 401(k)s are paired with the long-standing Social Security undertaking.
It remains unclear whether the United States could institute a comparable plan to the superannuation method, particularly given the political environment surrounding the alteration of retirement programs. Australia also has a populace of 27 million, whereas the United States has a populace of approximately 343 million.
Trump’s reference to Australia’s retirement structure was not the first occasion it has surfaced in his administration. Australian super funds constitute significant financiers in US assets, and Treasury Secretary Scott Bessent addressed a superannuation conference in Washington, D.C., in February, where he praised the program’s success.
Matthew Linden, executive general manager of strategy and insights at Super Members Council, who attended the rally in February, observed: “What has impressed US officials and investors is how the robustness of Australia’s super system policy arrangements — automatic super remittances, almost universal coverage, and safeguarding of savings until retirement — have aided Australians in building world-leading retirement reserves.”
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