Trump Administration Looks to Australian Retirement System

The Trump administration is exploring the Australian retirement savings model as a potential improvement for America’s system.

During a press conference at the White House, President Donald Trump expressed that his team is seriously considering adopting an Australian-style retirement program. He mentioned, “It’s a good plan. It worked very well,” suggesting that they are taking a close look at it.

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

Superannuation, or “Super” for short, requires employers to fund their employees’ retirement savings accounts. These accounts, known as super funds, are invested and typically locked until retirement. The contributions from employers are above and beyond regular salaries, and employees can make their own contributions as well.

Employers are mandated to contribute 12% of an employee’s income to these super funds, a significant increase from the initial 3% introduced when the program began in 1992.

Tim Jenkins, a partner at Mercer consulting firm, remarked, “There’s no opt-out. If you are employed, your employer must pay 12% of your salary into retirement savings. This savings is locked up until you approach retirement age.” Although there are limited circumstances to access the funds early, they are generally hard to access.

Remarkably, despite having a population that ranks 55th globally, Australia’s superannuation system has become the world’s fourth-largest retirement savings pool, with total assets reaching around A$4.5 trillion (approximately $3 trillion).

Employees have the ability to choose from various super funds, which are managed by professionals and governed by regulations. These funds invest in a plethora of global assets, from stocks to private equity.

The superannuation program was created to address worries surrounding an aging population and the necessity for individuals to have adequate retirement support.

“With an aging population and declining birth rates, such a system would ease the financial burden on future generations,” Jenkins noted.

In comparison, the Australian Retirement System has earned a B+ rating in the Mercer CFA Institute’s 2025 Global Pensions Index, while the United States stands at a C+.

Additionally, although there are state pension programs offering a safety net for those in need, “super” has become the main avenue for retirement savings.

In the U.S., employer-sponsored retirement plans like 401(k)s are voluntary. Companies can choose whether to match employee contributions, marking a sharp contrast to Australia’s mandatory system.

Social Security, established in the U.S. in 1935, serves as the primary source of retirement income, with concerns growing about its sustainability as the population ages.

Whether the U.S. can implement a similar program to superannuation remains uncertain. The political landscape complicates changes to retirement plans, especially given the significant differences in population size—27 million people in Australia compared to about 343 million in the U.S.

Trump’s reference to Australia’s retirement system isn’t entirely new for his administration. The super funds have been notable investors in U.S. assets, and Treasury Secretary Scott Bessent previously spoke of the program’s success at a Superannuation Summit in Washington in February.

Matthew Linden, Executive General Manager of the SuperMembers Council, shared insights from the summit, highlighting that U.S. officials were struck by how features like automatic super payments and a nearly universal healthcare system have helped Australians build a substantial retirement fund.