In Australia, Retirement Saving Done Right

When President Barack Obama delivered a speech to Australia’s Parliament in late 2011, he joked about bits of slang he’d picked up Down Under, including “earbashing”—the tendency to go on and on about a topic. “I really do love that one, and I will be introducing that into the vernacular in Washington,” the president said, to laughter.

Here’s another Aussie term D.C. lawmakers should get to know: superannuation. That’s what Australia calls its retirement savings system, which in just two decades has become one of the most highly regarded in the world. Since its introduction in 1992, the Superannuation Guarantee program has grown to $1.52 trillion, more than the country’s gross domestic product, with more than 90 percent of workers putting money into the system. By comparison, Americans have about twice that, $2.8 trillion, in their 401(k) accounts, with a population 14 times larger. “I believe that superannuation is as much a source of national advantage and pride as the Australian Olympic team,” Bill Shorten, the minister in charge of the program, said last year. “Super” funds supplement the national pension, a means-tested program funded by taxes that provides benefits to three-quarters of people over 65.