Mention the word Australia and the images that come to mind are "shrimp on the barbie," Koala bears and kangaroos. We'd like to add another image: Baby boomers who can actually afford to retire.

A report issued in July 2007 by a firm managing Australian retirement funds notes that Australians "on average will eventually retire with total superannuation [Australia's version of our 401(k) plan] and other assets of $535,036."

How does this half-a-million-dollar-nest-egg figure compare to its American counterparts? The average American has saved less than one-fifth of what he or she needs for a secure retirement. The average American head of household between ages 62 and 65 only has about $110,000, if you add the median 401(k) account balance to the median rollover IRA balances. That is less than twice the median salary of $61,600 for that age group.

Australian employers contribute 300% more to employee accounts

The reason Australians' nest eggs are fuller than Americans'? Simply, Australian employers are required to contribute to workers' accounts. The current contribution rate is 9% of salary, up to a ceiling of $145,880. Compare that to America's 401(k) system, in which employers aren't required to contribute. When they do contribute, it's usually only a match to an employee contribution - typically 50 cents for every dollar up to 6% of compensation or, at best, only 3% of pay, compared to 9% Down Under.

Unlike the U.S. Congress, Australian lawmakers constantly are tweaking the system to incentivize employee contributions, based on their calculations as to whether citizens have achieved retirement readiness. Australian workers aren't subject to the counterintuitively low employee contribution limits that exist here: $15,500 a year for individuals under age 50 and another $5,000 for the over-50 population in 2008. Australia's joint employer-employee contribution tops out at $50,000 a year, and those over age 50, or turning 50 before June 2012, can contribute up to $100,000 each year.

Our proposal for reform

We propose requiring companies with10 or more workers to contribute 9% of pay to employee accounts. For small employers with nine or fewer employees, we propose a program that features a matching government contribution, along the lines of the Universal 401(k) Plan proposed by Michael Calabrese of the New America Foundation (Disclosure: Calabrese is a member of the Retirement Solutions board). Not surprisingly, Australia has a similar government-matching program for low-income employees. Our recommendations:

• Implement a coverage mandate. Every American employer with 10 or more employees that doesn't offer a defined benefit plan (or with a plan that is frozen to new hires) must offer a 401(k) plan and contribute 9% of pay.
• Disclose necessary employee contribution "copay." Participants must be informed of their required contribution rate, based on their age when they start to save. For example, even with a 9% employer contribution rate, individuals who start contributing to their accounts at age 25 should contribute an additional 4% of salary, another 7% if they wait to contribute until age 30, etc.
• Provide employees of small companies with fewer than 10 employees a government matching contribution. Families earning below $40,000 a year would receive a dollar-per-dollar matching credit on their first $2,000 in savings; families earning above that level would receive a 50-cent-per-dollar match on the first $4,000 in savings.
• Enable realistic catch-up contributions. To encourage participants in their 40s and 50s to make realistic catch-up contributions, there should be no ceiling on tax-deductible employee contributions, so that a spouse can contribute 100% of her pay in the event that a couple is falling behind.

We need to create a new bipartisan dialogue on retirement readiness. The pension paternalism approach favored by Democrats has failed because ERISA makes the requirements for maintaining a defined benefit plan so onerous that it results in shrinking pension coverage rather than expanding it.

On the other hand, the Republican tax-break approach also has failed because Americans are spenders, not savers. Even if we were savers, the most prudent savers still can't afford to bankroll their retirement "bill" without help from their employer, especially the vast majority of us who wait until our 30s, 40s or later to start saving.

Australian lawmakers have created an employer-employee pact, saying, "We're all in this together," and continually tweak the system to improve it, based on their perception of retirement readiness. The country that perfected democracy should be able to do at least as well.

Jane White is the president of the Retirement Solutions Foundation. Rick Meigs is president of the 401khelpcenter.com. Download Editor Kelley Butler's "Five Minutes With..." podcast featuring White at ebn.podhoster.com.