America has some demographic and economic headwinds facing it. In short, the U.S. needs to boost its birthrate and better secure a retirement system that is running out of means and therefore money to fund it. In the next decade, Australia’s retirement savings pool is set to become the second largest globally, surpassing Britain and Canada, but still falling short of the US. President Trump’s administration is exploring ways to address both concerns. In fact, it is  “seriously” considering an Australian-style retirement plan for Americans in an attempt to do just that. According to the latest annual report from the Social Security and Medicare Trustees, the trust funds face significant financing challenges, and without major reforms, Social Security’s Old-Age and Survivors Insurance program will only be able to pay full scheduled benefits until 2033. Roughly 70 million Americans relied on Social Security benefits in September. Addressing the sustainability of retirement security has become a central policy challenge amid concerns over the U.S. birthrate and national savings levels. The retirement system in the U.S. differs starkly from Australia’s: the latter system is based on compulsory employer superannuation payments, amounting to 12 per cent of workers’ salaries, to generate a “nest egg” that is generally accessible at retirement. How Australia’s Superannuation Works Superannuation, or “super” for short, is Australia’s flagship retirement savings program. Employers are required to fund employees’ savings accounts, which are invested in select funds (i.e. “super funds”) that are restricted until retirement. Employer-funded contributions are made in addition to paying employees their wages, and the latter may contribute to their own savings account. Employers must contribute the equivalent of 12 percent of an employee’s income into these super funds — up from 3 percent in 1992 when the superannuation program was established. “There is no opt out,” Tim Jenkins, partner at consulting firm Mercer adds. “If you are employed, your employer must pay 12 percent of your pay to your retirement savings, and it’s locked up until you’re approaching retirement age with a few ways to access on the way, but very limited indeed.” Employees can choose from different super funds managed by financial institutions, regulated by the government, and invested across a variety of global assets from stocks to private equity. Australian super accounts are transferable between employers and don’t require the same rollover process as with American defined-contribution accounts. The average Australian currently holds a little more than AU$172,000 in superannuation, while those aged 65-69 have an average of AU$420,936. Among the strengths of the system are the fact that it captures nearly all employees with its universal coverage, and it creates a large asset pool, with more than AU$4.3 trillion ($2.83 trillion) in assets as of mid-2025, making it one of the largest pension systems globally. There are also tax advantages because contributions and investment earnings are taxed at concessional rates (15 percent), and retirement-phase earnings can be tax-free. Moreover, since the moneys in the “supers” become the personal property of the employees, Australians can pass on their superannuation (retirement funds) to their children, typically through a super death benefit, which can be paid to nominated beneficiaries upon the account holder’s death. On the other hand, the system involves complex legislative changes, contribution caps, and compliance requirements that can confuse members. Funds are restricted until retirement age, limiting financial flexibility for emergencies. Their defined-contribution structure also means individuals assume market volatility risk, meaning poor investment choices can negatively affect retirement results. In the next decade, Australia’s retirement savings pool is set to become the second largest globally, surpassing Britain and Canada, but still falling short of the US. By 2035, it is forecast to grow to $7.2 trillion in assets. US Model In the United States, employer-sponsored retirement programs like 401(k)s — first established in 1978 — are optional. Employers who offer 401(k) plans can decide whether they will match employees’ contributions. Social Security, which was established in 1935 under President Roosevelt, serves as the primary vehicle for retirement income. U.S. workers pay Social Security tax, which pools into a fund that is distributed to current retirees. Concerns have been mounting that Social Security funds are on shaky grounds as the U.S. population ages. In general, Australia’s compulsory employer-funded investment savings plan stands in contrast to the U.S. system where voluntary 401(k)s are paired with the long-standing Social Security program. As of June, U.S. retirement assets totaled $45.8 trillion, according to the Independent Directors Council. Americans held $18 trillion in individual retirement accounts (IRAs) and $13 trillion in all employer-based retirement plans, according to the council. Unfortunately, millions of Americans are missing out, with many employers not offering retirement benefits. According to the Economic Innovation Group, 42 per cent of full-time working Americans do not have access to retirement plans, 44.1 per cent do not participate and 50.5 per cent receive no employer match (employers’ matching contribution to an employee’s retirement plan are voluntary). Overall, 53.7 million full-time and part-time American workers aged between 18 and 65 lack access to any employer-provided retirement plans. “The United States retirement system is in desperate need of reform,” Economic Innovation Group states on its website. “Tens of millions of workers — especially low-income workers — lack access to any type of retirement account.” Why Superannuation Is So Popular “With an aging population and declining birth rates, a system like this takes the fiscal burden off future generations,” Jenkins said. Australia’s retirement system is ranked B+ on the Mercer CFA Institute Global Pension Index for 2025. Meanwhile, the United States is ranked C+. There is also an Australian government pension program that serves as a safety net for people who need additional support. However, “super” is increasingly the primary retirement savings vehicle. Trump’s comment about Australia’s retirement system isn’t the first time it has been mentioned in his administration. Australian super funds are major investors in U.S. assets, and Treasury Secretary Scott Bessent spoke at a superannuation summit in Washington, D.C., in February, where he touted the program’s success. Matthew Linden, executive general manager of strategy and insights at Super Members Council, who attended the summit in February, said: “What has struck U.S. 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.” Supporters argue a compulsory private savings system could ease future pressure on Social Security and give workers larger, individually controlled retirement funds. The White House has offered no timeline or detailed proposal, but Trump described the Australian approach as “very unique,” and stressed that strengthening retirement savings remains “very important” to his administration. “We’re looking at it very seriously,” Trump said. “It’s a good plan. It’s worked out very well.” READ MORE from F. Andrew Wolf Jr.: Thanksgiving — Beyond the First Feast While Humans Were Tuning Their Guitars — AI Created America’s No. 1 Country Song From Orwell to Brussels: The EU’s ‘Ministry of Truth’ Arrives