Nationwide — President Trump is exploring an Australian-style retirement system to help Americans save for retirement, saying it has “worked out very well.” The plan would require employers to fund retirement accounts automatically, similar to Australia’s superannuation.
In Australia, superannuation, or “super,” is the main way workers save for retirement. Employers contribute a set percentage of employees’ income into professionally managed funds, which remain locked until retirement. Employees can also add to their accounts.
Currently, employers must contribute 12% of an employee’s pay, a gradual increase from 3% in 1992. These contributions are mandatory, and only limited access is allowed before retirement. According to CNN, the system has grown to hold about 4.5 trillion Australian dollars, making it one of the largest retirement funds globally.
Australia’s system was created to ease the financial burden of an aging population. Experts say it removes pressure from future generations while helping people build their own retirement savings. A government pension acts as a safety net, but “super” is the primary savings vehicle.
In contrast, the U.S. relies mainly on voluntary 401(k)s and Social Security. Employers may match contributions, but participation isn’t guaranteed, and Social Security faces challenges as the population ages. Trump’s administration is studying the Australian model to see if something similar could work in the U.S., though adapting it to a much larger population could be complex.
Australian super funds are also major investors in U.S. markets, which has brought additional attention from Washington officials. Advocates highlight automatic payments, broad coverage, and savings preservation as key factors behind Australia’s high retirement savings rates.