Larry Fink, CEO of global investment firm BlackRock, has proposed reforming the U.S. Social Security system by adopting a model similar to Australia’s superannuation program. In Australia, employers are required to contribute a percentage of each employee’s salary into a superannuation fund, which is a long-term investment designed to save for retirement. The current contribution rate stands at 11.5% of an employee’s salary, with employees having the option to make additional contributions up to a certain limit.
Superannuation funds offer various investment options, allowing employees to choose where their contributions are invested. While contributions and earnings are subject to tax, the rate is generally lower than standard income tax rates. Similar to Social Security, the funds are typically not accessed until retirement.
🚨NEW: @BlackRock CEO Larry Fink in an interview happening now with @business says we’re going to see ‘more evidence of a slowdown in the economy’ in the coming months. He says ‘we are probably in a recession right now’ and CEOs he’s talking to say that we’re already in a…
— Eleanor Terrett (@EleanorTerrett) April 7, 2025
“I would not be taking money off the table right now. It’s a great entry level. The macro trends are not gonna change (eg US tech innovation, AI etc).” – Larry Fink
— Eric Balchunas (@EricBalchunas) April 7, 2025
Fink proposes pension reform
Fink criticizes the current U.S. Social Security system, arguing that it is an inferior retirement savings model compared to the Australian superannuation program. He believes that Social Security has become so politicized that meaningful discussion on its reform is stifled, with politicians too afraid to address changes to the system.
“Most CEOs I talk to say we’re in a recession right now” – Larry Fink on @BloombergTV right now
— Eric Balchunas (@EricBalchunas) April 7, 2025
In Australia, private companies manage millions of superannuation accounts, whereas in the U.S., the Department of the Treasury manages the Social Security trust fund. Given BlackRock’s management of a global portfolio worth $11.5 trillion, Fink’s preference for the Australian system likely stems from his belief that private investment firms are better suited to manage and grow retirement savings. Australia’s superannuation system offers several notable benefits, including lower taxes on contributions, discounted insurance rates, government contributions for low-income workers, free professional advice, exclusive deals and discounts, and tax-free access to funds in retirement.
Social Security has been a lifeline for Americans since 1935, and a recent Navigator Research report found that 85% of Americans oppose cuts to the program they have spent years contributing to. Whether any future changes will incorporate aspects of the Australian system remains to be seen, but what is clear is that people want certainty that Social Security will be available when they need it.
Image Credits: Photo by Essow K on Pexels
