Is Trump considering superannuation? What to know about Australia’s retirement plan

President Donald Trump has another idea for your money. 

During a White House news conference on Monday, Trump suggested his administration is looking into an Australian retirement program known as “superannuation.” 

Trump was initially discussing the “Trump Accounts” when a reporter asked if there were other policy proposals that he and his administration was looking into that would encourage people to have children. 

“Well, we are looking at programs . . . there’s a certain Australian plan that people are liking that they’re talking about,” he said. “There’s a plan where, not for children necessarily, but it’s for people, working people and we are looking at other things different from this.”

According to reports, Trump did not elaborate on what he meant about the superannuation or “super” retirement plan. 

So what exactly is superannuation and why should Americans care about how Australian’s save for retirement? 

Superannuation is a retirement savings plan in Australia that’s funded by employers and employees and can either guarantee a set benefit or grow in value.

A superannuation, or super, is an Australian pension program created by employers for employees, akin to U.S. pension plans. There are two main types of superannuation funds: defined-benefit and accumulation funds. Accumulation funds grow based on contributions and market performance, while defined-benefit plans provide fixed payouts. Funds allow for investment choice and can have lower fees compared to other retirement options. Australian superannuation funds are subject to specific tax conditions depending on the contributor’s circumstances.

Per Investopedia, unlike most retirement plans, superannuation benefits follow a set formula rather than relying on investment returns.

Here are some differences: