U.S. Looks to Australia for Retirement Savings Solutions

The Trump administration is exploring ideas from Australia to enhance America’s retirement savings framework.

During a recent White House address, President Donald Trump indicated that his team is contemplating an Australian-style retirement system.

“We’re seriously considering it,” Trump noted. “It’s a solid plan that has proven effective.”

It seems that Australia’s primary retirement savings initiative, known as “superannuation,” has piqued the interest of officials in Washington.

Superannuation—or “Super” for short—is the cornerstone of retirement savings in Australia.

In this system, employers are mandated to contribute to their employees’ savings accounts, which are invested in designated funds known as super funds and are generally inaccessible until retirement. Importantly, these employer contributions are additional to the employees’ regular wages. Employees can also add to their own accounts, which is worth mentioning.

Employers are required to pay an amount equivalent to 12% of an employee’s salary into these funds. This percentage has seen a gradual rise from 3% since the system’s modern implementation in 1992.

Tim Jenkins, a partner at the consulting firm Mercer, shared with CNN, “There’s no opting out. If you’re employed, your employer has to pay 12% into your retirement savings. That money is locked away until retirement, and while there are limited opportunities to access it early, they are quite restricted.”

Notably, Australia’s superannuation system is recognized as the fourth-largest retirement savings pool globally, even though the country ranks 55th by population. According to JP Morgan Chase, the total assets in this pension investment pool amount to approximately A$4.5 trillion (about $3 trillion).

Employees can select from a range of super funds. These funds are overseen by professional investors and are regulated by the government, with investments spanning various global assets—from stocks to private equity.

The superannuation initiative was designed, in part, to address challenges stemming from an aging population and to ensure that people can support themselves in retirement.

“Given the aging population and falling birth rates, implementing such a system would alleviate the financial strain on future generations,” Jenkins pointed out.

According to the Mercer CFA Institute’s 2025 Global Pensions Index, the Australian Retirement System has a rating of B+, whereas the U.S. falls at C+.

Moreover, state pension programs exist as a fallback for individuals requiring extra assistance, yet ‘super’ is increasingly taking precedence as the main retirement savings method.

In contrast, retirement plans in the U.S., like the voluntary 401(k) program established back in 1978, allow employers discretion in matching employee contributions.

Social Security, set up in 1935 during FDR’s presidency, remains a vital source of retirement income. U.S. workers contribute taxes to this fund, which are then distributed to current retirees. However, with an aging U.S. population, concerns about the viability of the Social Security Fund are rising.

Generally, Australia’s compulsory employer-funded retirement savings plans stand in stark contrast to the U.S. system, where voluntary 401(k) plans coexist with Social Security.

Whether the U.S. can realistically adopt something akin to the superannuation model remains uncertain, particularly considering the political hurdles involved in overhauling retirement plans. It’s important to note that Australia has a population of around 27 million, while the U.S. boasts about 343 million.

Trump’s reference to Australia’s retirement system isn’t a new development under his administration. Australian super funds are significant investors in U.S. assets, and back in February, Treasury Secretary Scott Bessent praised the program’s success at the Superannuation Summit in Washington D.C.

Matthew Linden, Executive General Manager of Strategy and Insights at the SuperMembers Council, emphasized the insights U.S. officials gleaned from the meeting. “What impressed U.S. officials and investors was how robust policy settings—including automatic super payments, nearly universal healthcare, and a focus on saving until retirement—led to Australians establishing a world-class retirement nest egg,” he remarked.