Full Breakdown
Trump Looks to Australia’s Superannuation Model to Revamp U.S. Retirement System
7/13/2026, 4:12:25 AM
Core Proposal and Immediate Action
President Donald Trump directed Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick to examine Australia’s employer-funded superannuation system as a template for expanding U.S. retirement coverage. The directive follows a July 6 meeting with BlackRock CEO Larry Fink, a longtime advocate of the Australian model. Trump indicated the study will be presented to Congress for possible implementation.
Background of the Australian Model and U.S. Retirement Gap
Australia’s “superannuation” scheme obliges employers to contribute a gradually rising 12 % of employee wages—including for part-time staff—into privately managed funds. The system, now valued at about $3.1 trillion, is projected to become the world’s second-largest retirement plan within a decade. By contrast, the U.S. Social Security trust fund is projected to be depleted by 2032, and median balances in Vanguard-administered 401(k) plans were only $44,115 last year, with roughly 40 % of private-sector workers lacking any comparable plan.
Official Statements & Responses
Trump praised the Australian approach, noting its popularity and success. Texas Senator Ted Cruz endorsed the idea in an July 8 X post, calling Trump’s comments “exactly right” and announcing legislation to broaden wealth-building opportunities for all workers. A White House official cautioned that any U.S. version would be “maybe making it a little bit sharper, a little bit better,” signaling that a direct copy is unlikely.
Criticism & Opposition
Retirement scholars warn that Australia’s system is not a simple fix. Gopi Shah Goda, director of the Retirement Security Project at the Brookings Institution, highlighted the difficulty of reconciling a sovereign-wealth-fund solution with existing payroll-tax-funded Social Security obligations. Alicia Munnell, senior adviser at the Center for Retirement Research, argued the U.S. system already blends private 401(k) accounts with inflation-adjusted Social Security and suggested reforms should focus on expanding enrollment rather than mandating high employer contributions. Business groups have warned that compulsory contributions could divert funds from wages and raises.
Verbatim Quotes
- “They have a plan in Australia, which people really like. It’s really worked out very well,” — Donald Trump
- “We’re going to be talking about that with Congress and see if we can implement it.” — Donald Trump
- “I’m authoring legislation to ensure every American — from bartenders to gig workers — has the opportunity to build wealth, own a piece of the American Dream, and share in our nation’s prosperity,” — Ted Cruz, U.S. Senator
- “My view is that our system is better designed,” — Alicia Munnell, Senior Adviser, Center for Retirement Research, Boston College
- “taking that, and we’re going to be maybe making it a little bit sharper, a little bit better.” — Donald Trump
