While Mr Buttigieg's proposal falls short of the compulsory nature of Australian super - it would only apply if US workers opt into the scheme - it shares a number of similarities.

An American employee could decide to contribute 1.5 per cent of their pay into a "rainy day account", prompting an automatic matching contribution of 3 per cent from an employer that would go into a "retirement account".

The Buttigieg campaign believes that there would be a high take-up rate under the scheme because the "rainy day account" portion could be withdrawn by its owner at any time without penalty.

"Under Pete's proposal, a middle-earning American worker participating in full over their lifetime would be able to retire with over $US500,000 ($737,000) in retirement savings," the mayor's electoral platform says, assuming a "worker who begins saving at age 22 in 2021".

That figure is based on an assumed inflation rate of 2 per cent and fund returns that gradually slide from 5 per cent to 3 per cent over the worker's lifetime of employment.

From then on, if the fund generated a 3 per cent return from retirement onwards, the owner would enjoy income of around $US11,000 a year, which is comparable with the average social security (or pension) payment, Mr Gotbaum said.

"However, the critical issue is that you need to save relatively reliably for a relatively long period of time," he said.


While retirement policy falls below issues such as health insurance or infrastructure in voter polls of what concerns them, Buttigieg has tapped into one of America's most difficult long-term issues.

Social Security - as the American pension is known - faces a staggering $US13.9 trillion shortfall between 2035 and 2093, according to the Social Security Board of Trustees.

Democratic presidential candidate Pete Buttigieg eats lunch with folks from Denison, Iowa. Recent polls show he leads the other Democratic candidates in the state with first primary caucus. AP

Furthermore, it's expected to exhaust some $US2.9 trillion in reserve assets by 2035, by which time pension payments would need to be cut by about 20 per cent.

The Buttigieg plan would help bridge that gap, partly by extending taxes that fund social security to wages above the current ceiling of $US133,000, as well as encouraging more workers to build their own retirement nest eggs.

Given the size of America's workforce, the potential figures are gargantuan, and would quickly dwarf Australia's current stock of super assets, which stood at $2.9 trillion in the June quarter, or 150 per cent of gross domestic product.

An equivalent ratio for the US would be around $US30 trillion.

Mr Buttigieg's plan would ensure that savings would be invested in "broad-based funds with fees that are required by law to be nearly zero".


A default system would send retirement account dollars into "life-cycle index funds that combine stocks and bonds in proportions that vary with a worker's age".

Workers who want a different mix will have other options to hand.

The federal reform would reflect changes that are already gathering pace across many of Ameria's states, including Maryland, California, Connecticut, Illinois, Massachusetts and New Jersey.

Under the Buttigieg plan, states would be able to retain their existing schemes.

"Hats off to Pete Buttigieg this week," said Teresa Ghilarducci, an economist and author of recent book, with Blackstone executive vice-chairman Tony James, on the need for urgent retirement reform.

"The current employer-based system is broken," she wrote for Forbes on Tuesday (Wednesday AEDT).

"It is the result of a failed 40-year experiment in voluntary plans that employers are not encouraged to sponsor even if they wanted to."

Mr Buttigieg regularly polls among the top four Democrat 2020 contenders.