Trump floats Australian-style retirement system for the US

[Morphine Prince 109,709]

The Trump administration is looking Down Under for inspiration on how to improve the United States’ retirement savings system.

President Donald Trump on Tuesday said at the White House that his administration is looking into an Australian-style retirement program.

“We’re looking at it very seriously,” Trump said. “It’s a good plan. It’s worked out very well.”

Australia’s primary retirement savings program — known as “superannuation” — might have caught the attention of Washington officials.

How 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 — known as super funds — that are locked up until retirement. The employer-funded contributions are made on top of paying employees their regular income. Employees can also contribute to their own savings account.

Employers must contribute the equivalent of 12% of an employee’s income into these super funds — a gradual increase from 3% when the modern superannuation program was established in 1992.

“There is no opt out,” Tim Jenkins, partner at consulting firm Mercer, told CNN. “If you are employed, your employer must pay 12% 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.”

Australia’s super funds are the fourth-largest retirement savings pool in the world despite the country’s ranking as the 55th largest country by population size, according to JPMorgan Chase.

The total superannuation investment pool has roughly 4.5 trillion Australian dollars in assets (roughly $3 trillion).

Source: https://finance.yahoo.com/news/trump-said-looking-australian-style-172648870.html

 

[Ladle Ghoulash 53,971]

I mean, why not just work on making sure Social Security is solvent lmao 

[Morphine Prince 109,709]

Just now, Ladle Ghoulash said:

I mean, why not just work on making sure Social Security is solvent lmao 

I mean, I'm sure this system works great in Australia, but I see huge hurdles with trying to pass this in the US.

Currently you have employers paying Social Security at 6%, no way they'd want to double that to 12%. 

Even companies who offer 401k matches at like 4-5% don't get to the 12%.

I saw a comment pointing out that Australia has universal healthcare and why this system works.

If the US adapted universal healthcare and therefore deducted that cost from employers, then I can see something like this working.

 

[Lord Mayhem 3,448]

That's waaay too much here in the U.S. for most employers to be FORCED to pay...

[sarahb 17,207]

Look idk if this would translate to the US but I'm definitely in favour of the US government adopting more Australian policies. 

Sincerely, an Australian enjoying universal healthcare, decent gun control and preferential voting. 

Spoiler

And I think compulsory voting would be very useful too...

[zevthepaparazzo 2,453]

Bros never had an original thought IN HIS LIFE 

[Joshie S 6,557]

As an Australian I actually hate paying super.

I have 40k right now just sitting there that I can't touch. It means I have to make it to retirement age of 67 before I have a chance of actually spending it.

There is no gaurantee that I'll make it to that age (unfortunately) so I'm working all these years and will never get to see that money, ever.

If I die tomorrow it all goes to first pay off any debts (which I don't have) and then the rest is I believe given to nominated beneficiaries. 

That's wild to me.