Why the world wants to copy Australia’s $4.2 trillion super system

Australia’s super system is now so successful that other countries are looking to copy it.

The key difference with our system – and the reason it will soon support some of the richest retirees in the world – is that it is a defined contribution rather than a defined benefit system.

That can leave some retirees worried about the eventual amount they will retire with but it also allows for a more aggressive investment performance over time, which results in startlingly better outcomes.

For example, calculations by the Super Members Council show that our super assets will surpass the UK’s in 2030 and Canada’s by 2031.

Heading for number two in the world

That would put our national nest egg into second place around the world behind the United States, even though in population terms we sit at number 55.

The analysis also showed that between 2001 and 2023, Australia’s cumulative superannuation contributions were the highest among OECD countries and were well above the OECD average.

One of the really strong benefits flowing from that is that our spending on the age pension is actually falling and should continue to fall, even as our super system keeps growing at double the rate of most international competitors.

Some serious interest in the US

The recent “super summit” in Washington attracted some serious interest from US players including including Treasury secretary Scott Bessent, JPMorgan Chase CEO Jamie Dimon, Blackstone CEO Stephen Schwarzman, Citigroup CEO Jane Fraser, Australian treasurer Jim Chalmers, US ambassador Kevin Rudd and a host of executives from Australia’s banks and superannuation providers.

Unlike Australia, the US social security system for all workers is a major drag on government spending, with the large retiring Baby Boomer cohort drawing down en masse and with the majority of that money having being invested in poorly performing government bonds.

When you include private pensions the US is in a much better position but not when you look across different socio-economic groups, given that many private “top up” pensions belong to wealthier workers.

Big investors welcome

Of course, the other reason that the US is interested in superannuation is that Australian super funds are increasingly invested in the massive US share market, with the current  $US400 billion of assets expected to double over the next decade to $US1 trillion.

That makes Australia a seriously big investor in the US and worth courting.

Australian superannuation assets have jumped an incredible 500% over the last 20 years and they are spread across the majority of the workforce due to super payments being withdrawn directly from pay packets.

Looking at the full picture Australia’s superannuation assets reached more than US$2.6 trillion ($4.2tn) at the end of 2024, making it fifth largest out of 22 global pension systems in the 2025 Global Pension Assets Study.

The US has the biggest market with US$38 trillion ($60.6tn) in retirement savings, followed by Japan and Canada with US$3.3 trillion ($5.3tn) respectively, and the UK with US$3.1 trillion ($5tn).

Australia closing in on number one

The leading country with the highest ratio of pension assets to GDP is Switzerland at an amazing 152% but Australia is not far behind with 146%.

Our super system continues to grow faster than others, mainly due to our above average equity allocations which is at 52% compared to 50% for US funds.

By contrast, the Netherlands, UK, and Japan have above-average exposure to bonds, while Switzerland has the most-balanced allocation.

The countries with higher defined contribution rankings are growing their pension pools the fastest, with Australia topping the defined contribution rankings with 89.2% of assets, followed by the US (69%) and Canada (44%).

After the success of the super summit in Washington, Sydney will stage another global superannuation summit in the second half of this year.