New Pillar: Government-Backed Digital Pension Scheme Accounts as a Parallel Alternative to Compulsory Super
A discussion paper evaluating a new, forward-only retirement system funded by non-marketable government bonds, run alongside the existing superannuation pool rather than replacing it. Prepared September 2026 By Deep T, Edited, Gunnamatta Executive summary The original 3 blog critique argued that Australia’s compulsory superannuation system fails on ten counts: it subsidises the wealthy, excludes…
The discussion paper presents a new, forward-only retirement system in Australia that operates alongside the existing compulsory superannuation system. The proposed system, known as the Digital Pension Scheme (DPS), would function as a government-issued, non-marketable bond collateralized by digital accounts for every citizen. The DPS would be funded through a parallel account system, where each citizen's income would be topped up annually and accrue interest linked to inflation and productivity growth.
Under this proposal, compulsory superannuation contributions would be abolished, allowing workers to spend, save, invest, or allocate their earnings into a voluntary superannuation fund. This would eliminate the current system's tax concessions, shifting them to the earnings stage only, thereby addressing the unequal distribution of tax benefits to high earners.
The proposed system also addresses equity concerns, ensuring that those who contribute to the Australian economy are rewarded for their efforts. The extra income generated by the DPS could be used to pay down government debt, while equity and equality would be built into the system.
The DPS is compared to the US Social Security Trust Fund, which has operated on a similar basis for nearly ninety years using special, non-marketable Treasury securities. An actuarial approach to determining pensioner needs could also help address housing inequality, given Australia's projected housing shortage and increased prevalence of renting over homeownership.
By offering a better-designed alternative to the compulsory superannuation system, the DPS aims to let workers decide which system serves them best and promotes a more considered approach to investment and the national interest. Each citizen would receive a government-administered digital DPS account at the implementation date, providing a direct, present value calculation of an adequate retirement income based on individual needs and demographic factors.
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