US weighs Australia’s superannuation model to overhaul retirement savings
The US government is exploring a major shift in retirement policy by considering an Australian-style superannuation system. President Donald Trump’s administration has shown interest in adopting elements of Australia’s mandatory savings model, which stands in stark contrast to America’s current voluntary 401(k) and Social Security setup. The move follows long-standing praise for Australia’s approach, including from Treasury Secretary Scott Bessent.
Australia’s superannuation program, often called 'super', requires employers to contribute 12% of an employee’s income into professionally managed investment funds. These funds, which hold around AUD 4.5 trillion (USD 3 trillion), form the world’s fourth-largest pension pool. The system is compulsory for all employed individuals, with savings invested globally by professional managers.
If implemented, an Australian-style retirement system in the US would mark a significant departure from the current voluntary approach. The change could increase national savings and ease pressure on Social Security, but its success would depend on addressing key structural and demographic differences. Policymakers will need to balance efficiency with fairness to avoid leaving behind those most in need of support.
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