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KiwiSaver – what would you do?

KiwiSaver – what would you do?

Two and a half million of us have joined KiwiSaver since it began, but not everyone is benefiting or getting the most out of it. The Commission for Financial Capability has been asking why and what can be done about it, as part of a review of retirement income policies.

We spoke to KiwiSaver providers, government agencies and carried out research involving more than 2,000 New Zealanders. We’ve now developed a shortlist of eight ideas and want to hear from everyone else, whether they are KiwiSaver members or not.

It’s part of Retirement Commissioner Diane Maxwell’s three-yearly policy review and the public’s views and comments will help develop some recommendations for the government.

The Commission’s GM Investor Education, David Boyle, said: “We know that any changes need to be considered very carefully before they are made. New Zealanders tell us they have been put off joining KiwiSaver because of the number of amendments that have happened since the scheme began in 2007.

“Internationally, it is recognised as a leading workplace-based savings scheme, however a few tweaks could make it even better.”

Suggestions include changing the levels of contributions that people can make, to offer more flexibility, and introducing the option to automatically increase contributions by 0.5% or 1% annually up to a pre-set maximum.
Members currently have the choice of paying 3%, 4% or 8% of their salary.

David Boyle said: “People have told us that the jump from 4% to 8% is too big and they would like to have other choices. If that encourages people to contribute more to their retirement savings, then it’s worth looking at.

“But there are also people who find 3% is too high and we wonder if a lower rate of 1% or 2% for a limited period would reduce the number of people taking contributions holidays and help more people get started.”

Last year, out of all the KiwiSaver members who had opted for a contributions holiday, 83% were on a five-year break. While some people may need an extended period, a five-year suspension could be too long.

Instead, a one-year maximum holiday period, with the ability to renew it one year at a time, could help people start or resume regular savings sooner.

Other suggestions include allowing people over the age of 65 to join.

David Boyle added: “We’re not saying that all of the suggestions should be introduced, we want to know what New Zealanders think.

“Overall there was a general consensus from providers and government agencies that we have highlighted some key ideas that could have a significant impact without adding too much to the overall cost. However, there would still need to be more work around the practicalities of implementing them.”

The full list of ideas the Commission has drawn up is attached and can be completed online at:


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