The Trump administration is looking to Australia for insights to improve the retirement savings framework in the United States. On Tuesday, President Donald Trump announced at the White House that his administration is evaluating the implementation of a retirement program modeled after Australia’s system. “We’re examining it with considerable seriousness,” Trump remarked. It signifies a robust approach. It has demonstrated considerable efficacy. Australia’s primary retirement savings program, known as ‘superannuation,’ could have captured the attention of policymakers in Washington. Superannuation, often known as ‘super,’ functions as Australia’s leading retirement savings program. Employers are required to contribute to employees’ savings accounts, designated for particular investment vehicles known as super funds, with access limited until the individual reaches retirement age. The contributions provided by the employer are supplementary to the standard remuneration received by employees. Employees are afforded the opportunity to contribute to their individual savings accounts. Employers must now allocate 12% of an employee’s income to superannuation funds, a notable increase from the original 3% contribution rate established with the introduction of the modern superannuation framework in 1992. “There is no opt out,” remarked Tim Jenkins during an interview.
“If you are employed, your employer is mandated to contribute 12% of your salary to your retirement savings, which remains inaccessible until you approach retirement age, with only a few, albeit very limited, options for access along the way.” Reports says Australia’s super funds constitute the fourth-largest retirement savings pool in the world, a significant accomplishment considering the nation is ranked 55th by population size. The total superannuation investment pool consists of around 4.5 trillion Australian dollars in assets. Employees are afforded the opportunity to choose from a range of superannuation funds. The funds are managed by professional investors, including regulated financial institutions, and are distributed across a varied spectrum of global assets, which includes both equities and private equity investments. Australia’s superannuation program was created to address challenges associated with an aging population and to assist individuals in achieving financial independence in retirement. “With an aging population and declining birth rates, a system like this alleviates the fiscal burden on future generations,” Jenkins stated.
Australia’s retirement system has received a B+ rating on the Mercer CFA Institute Global Pension Index for 2025. In the interim, the United States maintains a C+ rating. A government pension program serves as a safety net for individuals in need of additional support. However, “super” is increasingly emerging as the primary mechanism for retirement savings. In the United States, employer-sponsored retirement programs, including 401(k)s, which were introduced in 1978, continue to be optional. Employers that offer 401(k) plans possess the authority to decide whether to match the contributions made by their employees. Social Security, instituted in 1935 during the administration of President Franklin Delano Roosevelt, serves as the primary system for retirement income. In the United States, both workers and employers make contributions to the Social Security tax, which is subsequently accumulated in a fund designated for current retirees. Concerns have been escalating regarding the stability of Social Security funds as the demographic shift towards an aging population in the United States continues.
Australia’s mandatory employer-funded investment savings scheme stands in contrast to the US framework, where voluntary 401(k) plans are supplemented by the established Social Security program. The viability of the United States implementing a program similar to the superannuation model is questionable, especially considering the political intricacies involved in modifying retirement plans. Australia’s population is currently 27 million, whereas the United States has a population of around 343 million. Trump’s mention of Australia’s retirement system signifies an ongoing dialogue that has emerged throughout his administration. Australian superannuation funds constitute a substantial allocation towards assets in the United States. Treasury Secretary Scott Bessent spoke at a superannuation summit in Washington, D.C., in February, emphasizing the program’s accomplishments. Matthew Linden, executive general manager of strategy and insights at Super Members Council, who attended the summit in February, remarked: “What has struck US officials and investors is how the strength of Australia’s super system policy settings — automatic super payments, near universal coverage and preservation of savings until retirement — have helped Australians grow world-leading retirement nest eggs.”