U.S. President Donald Trump pointed to Australia's superannuation as a model for reforming the U.S. retirement system.
According to Newsweek and the Sydney Morning Herald on the 3rd (local time), Trump mentioned Australia's pension system at a White House fundraising event that day and said, "We are looking at this plan very seriously." He called the Australian model "a very good plan, and it has worked very successfully (in Australia)."
Superannuation is a nationwide retirement pension system that Australia has had in place since 1992. The key is its compulsory nature. By law, Australia requires employers to make mandatory contributions of a set percentage of employees' pay into retirement accounts. The mandatory contribution rate, which was 3% at the time of introduction, rose in stages and reached 12% as of July this year.
Consulting firm Mercer, citing experts, noted that "Australia's superannuation system has no opt-out option," adding, "Wherever you work, employers cannot touch these funds until retirement."
According to the 2025 CFA Global Pension Index compiled by Mercer, Australia received a B+ (76.3 points), ranking among the top countries. The United States, by contrast, was at C+ (66.0 points). Deutsche Bank's analysis estimates that Australia's superannuation asset size is about 4.5 trillion Australian dollars (about $3 trillion), equivalent to 150% of GDP. Globally, it has grown into the fourth-largest pension asset.
By contrast, America's representative private pension, the 401(k), is based strictly on voluntariness. Whether employers adopt the plan, whether employees enroll, and how much they contribute are all optional. This difference has produced a stark "coverage gap." In Australia, virtually the entire population benefits from the retirement pension system. In the United States, roughly half of people ages 25 to 64 fall within the scope of employer-provided retirement plans.
The low-income population, especially those who cannot find steady jobs, is far removed from retirement pensions. According to U.S. Census Bureau data from last year, 40.6% of full-time workers, or 40.6 million people, do not even have access to a retirement plan. Among part-time workers, this figure surges to 79%. The gap by income level is even more serious. Among workers in the bottom 10% by income (annual income under $27,400), 78.7% have no access to retirement plans.
Even so, there is a high chance of a fiscal crisis within seven to eight years. According to the Congressional Budget Office (CBO) and the Social Security Administration, the Social Security trust fund is projected to be depleted as early as 2033–2034. Without separate reform measures, benefit payments would be automatically cut across the board by 20% to 24%.
The Australian-style model has strong defined-contribution (DC) characteristics, with workers directly accumulating their own retirement funds. It places less burden on public finances than the U.S. pay-as-you-go approach, in which the current generation supports retirees. Mercer analyzed, "In a situation of population aging and falling birthrates, such a system is well-suited to reduce the fiscal burden on future generations."
The Trump administration also expects the Australian superannuation system to help boost the birthrate. The logic is that easing anxiety about old age will lead younger people to have more children.
The biggest problem is the difference in economic scale between the two countries. Australia's population is 27 million, while the United States has 343 million. The United States also already has powerful, entrenched systems in the 401(k) and social security schemes. John Lettieri, CEO of the Economic Innovation Group (EIG), said of proposals for mandatory saving that include government subsidies, "(Given how Americans think,) it is unrealistic, overly high in expense, and vulnerable to political abuse."
Some experts predicted that rather than transplanting Australia's pension system wholesale, the Trump administration is more likely to adapt a hybrid approach for the United States by strengthening auto-enrollment in 401(k)s and expanding government support for low-income groups. Citing experts, the Sydney Morning Herald reported that "the Trump administration is focusing on the massive asset accumulation effects created by automatic contributions, universal coverage, and mandatory saving until retirement in Australia's pension system."