FREE NEWSLETTER

Is The Australian Superannuation Program the Answer to US Retirement Problem?

Go to main Forum page »

AUTHOR: David Lancaster on 3/30/2026

In some of my previous posts I have touted the Australian Superannuation program as a possible solution to America’s retirement funds problem. I admit that this was based on limited knowledge. This is Morningstar’s take on if this is the answer to our problem:

https://www.morningstar.com/retirement/what-us-could-learn-australias-retirement-savings-system?utm_source=eloqua&utm_medium=email&utm_campaign=MorningDigest&utm_content=None_73036&utm_id=38090

I would be interested in our Aussie HD readers take on this assessment of their system, and whether they agree with the conclusions about their system.

Subscribe
Notify of
5 Comments
Newest
Oldest Most Voted
Inline Feedbacks
View all comments
greg_j_tomamichel
greg_j_tomamichel
2 minutes ago

This was an interesting article, thanks.

From an Australian perspective, a few thoughts:

  • To say that the Australian superannuation system is 3 decades old is a little off the mark. The system is only now reaching the 12% contribution level for all employees, after starting at 3%. So it will actually be another 3-4 decades before we see the full affect of the Australian superannuation system on aged pensions etc.
  • Tax incentives are an integral part of the super system, to encourage retirement saving. However this also incentivises wealthier Australian to use super as a tax minimisation scheme, which was not it’s intent.
  • Our super system seems to be most closely compared to the 401K system in the US. The simplest way forward, in my very humble opinion, would be steps to broaden the 401K system to a greater proportion of the population, with a final target of 100% coverage.
0
Michael Flack
Michael Flack
2 hours ago

Not sure the benefit of another government run retirement savings program. We already have one in the US called Social Security. Instead of adding a second how about just fixing the first?

1
Mark Gardner
Mark Gardner
3 hours ago

I am not sure if this will practically work in a such a large economy/country like the US that is so divided across several fault lines. To achieve this:

  1. Labor will have to agree across the board. Highly unlikely since it a tax on labor for small businesses, gig workers, contract work, etc.
  2. Very costly to implement given all the other retirement savings programs the US already has.
  3. Very hard to implement given the high job churn Americans endure.

More useful steps could be:

  1. Mandatory 401K enrollments for all workers with a government plan as the default if the employer cannot afford to offer one.
  2. More access to deferred annuities and QLACs in retirement plans.
  3. Tax credits rather than deductions for retirement savers.
  4. Maybe Medicare “buy-in” option for younger workers to allow them to weather the high churn job market.
1
R Quinn
R Quinn
3 hours ago

Supposedly the average balance for 65 year old males is $422,000 and individuals select investments. That’s better than 401k balances and savings in general, but it’s not great and still at risk.

Of course, it’s heavily employer funded, but that must come in part from compensation.

I doubt we will ever see it in the USA. I suggest the the employer share of SS taxes be raised to help funding, but I doubt that as well.

1
Dan Smith
Dan Smith
6 hours ago

I read the article, and have attempted to learn more about Australia’s system. It seems both US and Australia systems tackle savings and the insurance aspects such as survivor and disability situations, albeit differently from each other. I’m not smart enough to determine which system is superior. 
If we can’t figure out the tweaks necessary to get SS back on track, how in the world could we start from scratch with a new system. My gut is telling me that we need to fix what we have, and get on with our lives.

4

Free Newsletter

SHARE
How To
Follow Us