Trump said he’s looking into an Australian-style retirement program for America. Here’s how it works

The Trump administration is looking to Australia for inspiration in improving the U.S. retirement savings system.

President Donald Trump said at the White House on Tuesday that his administration was looking into an Australian-style retirement plan.

“We’re looking at this very seriously,” Trump said. “It was a good plan. It worked really well.”

Australia’s main retirement savings scheme – known as Superannuation – may have caught the attention of officials in Washington.

Superannuation, or Super for short, is Australia’s flagship retirement savings scheme.

Employers are required to fund employees’ savings accounts, which are invested in selected funds (called super funds), which are locked in until retirement. Employer-sponsored contributions are made on top of regular earnings paid to employees. Employees can also contribute to their own savings accounts.

Employers are required to contribute 12% of employees’ earnings into these pensions – a proportion that has gradually increased from 3% when the modern pension scheme was established in 1992.

Tim Jenkins, a partner at consulting firm Mercer, told CNN there was “no opt-out.” “If you’re employed, your employer must put 12 per cent of your salary into your retirement savings, and those savings are locked in until you’re close to retirement age. There are a few ways to withdraw them, but they’re really limited.”

Although Australia ranks 55th by population size, its retirement savings pool is the fourth largest in the world, according to JPMorgan Chase.

The total assets of the pension investment pool are approximately AUD 4.5 trillion (approximately USD 3 trillion).

Employees can choose between different super funds. These funds are managed by professional investors such as financial institutions, regulated by governments, and invest in a variety of global assets from stocks to private equity.

Australia’s superannuation scheme was introduced to address concerns about an aging population and how to help people support themselves in retirement.

“As the population ages and birth rates decline, a system like this could reduce the financial burden on future generations,” Jenkins said.

Australia’s retirement system is ranked B+ in the Mercer CFA Institute’s 2025 Global Pensions Index. Meanwhile, the United States ranks C+.

There is also a government pension scheme that provides a safety net for those who need extra support. However, “supers” are increasingly becoming the primary retirement savings vehicle.

In the United States, employer-sponsored retirement plans such as 401(k)s (first established in 1978) are optional. Employers who offer a 401(k) plan can decide whether to match employees’ contributions.

Social Security, established in 1935 under President Franklin Delano Roosevelt, is the primary vehicle for retirement income. U.S. workers pay Social Security taxes, which are pooled into a fund and distributed to current retirees. As the U.S. population ages, there are growing concerns that Social Security funds are on shaky ground.

Overall, Australia’s mandatory employer-sponsored investment savings plan contrasts sharply with the system in the United States, where voluntary 401(k) plans are combined with long-term social security plans.

It’s unclear whether the United States will be able to implement a program similar to the pension model, especially given the politics associated with changing retirement plans. Australia also has a population of 27 million, while the United States has a population of approximately 343 million.

Trump’s mention of Australia’s retirement system is not the first in his administration. Australia’s super fund is a major investor in US assets and Treasurer Scott Bessent touted the scheme’s success in a speech at the Superannuation Summit in Washington DC in February.

Matthew Linden, executive general manager of strategy and insights at the Super Membership Council, who attended the February summit, said: “It’s astounding to U.S. officials and investors how the strengths of Australia’s super system policy settings – automatic super payments, near-universal coverage and preserving savings until retirement – ​​have helped Australians accumulate world-leading retirement savings.”

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