Trump Eyes 12% Australian Super Model for U.S. Retirement Overhaul

3 articles · Updated · The Globe and Mail · Jul 21

Trump said his administration is exploring a U.S. retirement-system overhaul modeled on Australia’s superannuation, where employers pay mandatory contributions into worker-owned investment accounts.
Australia’s system currently requires employers to contribute 12% of wages up to $270,830, while U.S. Social Security is funded by 6.2% payroll taxes from employers and 6.2% from workers.
The push comes as Vanguard says the median 2025 balance in 401(k)-type plans it administers was $44,115, and Social Security’s trust fund is projected to be depleted in 2032, triggering 24% benefit cuts without congressional action.
Retirement experts warn a switch would be difficult because Washington would still need to fund already-promised benefits, and new accounts would take years to build enough savings for retirement.
Businesses could also resist higher compulsory contributions, with critics warning employers might offset the added cost through lower worker compensation.