Trump Proposes US Retirement System Based on Australian Model

President Donald Trump announced that his administration is studying Australia's superannuation model to develop a new retirement savings system for American workers. The Australian system, established in 1992, requires employers to contribute 12 percent of a worker's pay into tax-favored, market-invested retirement funds. Trump intends to implement a version of this model that he describes as sharper and even better, envisioning it as a companion to his recently launched Trump accounts program for children.

Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick are leading the study of the model to create a proposal for Congress. While the proposed accounts would supplement Social Security rather than replace it, the initiative comes as reports indicate Social Security funds may be exhausted by 2033. Unlike the U.S. system, the Australian model allows funds to be passed to heirs, though it introduces higher market risk.

Critics from the Cato Institute and experts from the Center for Retirement Research warn that adopting this model may not resolve fundamental U.S. retirement issues, specifically the long-term solvency of Social Security. The plan remains a conceptual proposal with no formal legislation yet drafted.