OHIO — President Trump announced on July 6, 2026, that his administration is considering employer-funded retirement accounts modeled on Australia's superannuation system. He stated that he plans to discuss the idea with Congress.

As of July 2026, no legislation exists regarding Australia-style retirement accounts. Australia's superannuation system mandates that employers contribute approximately 12% of a worker's pay into a personal retirement account, which is owned by the worker and invested in markets.

The proposed retirement accounts are intended to supplement the existing Social Security program, not to replace it. Social Security is a pay-as-you-go social insurance program, funded by current workers' payroll taxes. It currently replaces an average of approximately 40% of pre-retirement income.

The ratio of workers to retirees supporting Social Security has changed over time. In 1950, approximately 16 workers supported each Social Security retiree. As of 2026, this number has decreased to approximately 2.7 workers per retiree.

Why It Matters

This proposal to consider employer-funded retirement accounts comes as the U.S. Social Security system faces demographic shifts. The decreasing ratio of workers to retirees, from 16 in 1950 to 2.7 in 2026, indicates a change in the funding dynamics of the existing program. An employer-funded system, similar to Australia's, could introduce an additional stream of retirement savings for individuals, potentially increasing personal retirement funds beyond Social Security's average replacement of 40% of pre-retirement income. The plan aims to supplement current provisions, which could affect future financial planning for retirees.