KiwiSaver is a voluntary, opt-out, portable retirement savings scheme that operates mainly through contributions the employer deducts directly from salary and wages and sends to Inland Revenue. (Non-salary and wage earners can also enrol directly with a scheme).
The OECD refers to retirement income schemes as either tier 1, 2, or 3 schemes based on the objectives they aim to achieve. Tier 1 benefits aim to protect from poverty in old age (NZ Superannuation is classified as a Tier 1 benefit). KiwiSaver is a Tier 3 benefit, a voluntary scheme that aims to raise the individual income replacement rate in retirement. There is no Tier 2 scheme in Aotearoa New Zealand – these are mandatory workplace schemes.
An introduction to KiwiSaver and how it operates, including enrolment and default providers, and policy settings can be found in our recent policy paper.
The following infographic outlines key moments in the history of KiwiSaver from 2007 to 2021.
KiwiSaver is one form of retirement saving scheme but there are others across the OECD. See how NZ’s retirement income system compares to other countries. Download the paper.
KiwiSaver Contributions
Research conducted by the New Zealand Policy Research Institute at AUT revealed a 36% gap between the amount men and women are putting into KiwiSaver each year. The research indicates that this 36% gap is primarily caused by the gender pay gap, rather than a difference in contribution rates, as women and men on average contribute the same percentage of their salaries to KiwiSaver.
KiwiSaver Balances update
Research conducted by MJW revealed that there is now a 25% gender gap in average KiwiSaver balances, up 5% in one year from the 20% gap identified in 2021.The research found gender gaps in every age group category widened, with larger gaps opening in younger ages groups.
KiwiSaver total remuneration
KiwiSaver policy settings are designed to provide incentives for people to contribute, but there is less incentive for an employee to contribute to KiwiSaver under a total remuneration model, as they will receive less ‘in their hand’ as current compensation. Te Ara Ahunga Ora undertook research to collect previously unknown data on employers’ use of a ‘total remuneration’ approach to KiwiSaver.
KiwiSaver non-contributors
KiwiSaver membership is high, with over 3 million members, representing around 96% of the working age population of New Zealand. However, ‘non-contribution’ rates are also high. Te Ara Ahunga Ora undertook research on those people who are not currently contributing to their KiwiSaver.
KiwiSaver Balances
Research conducted by MJW, revealed 40% of KiwiSaver members have a balance of less than $10,000, with women on average having lower KiwiSaver balances than men across all age groups.
KiwiSaver in the 2022 RRIP
In the 2022 RRIP, Te Ara Ahunga Ora was required to look at the impacts on temporary migrants not being able to contribute to KiwiSaver until their residency status changed. The AUT report found migrants could be missing out on up to $50,000 worth of retirement savings by not being able to access KiwiSaver.
KiwiSaver research from previous RRIPs
A report prepared for the 2019 RRIP provides some insights into KiwiSaver member behaviour as at 2018. Download the report
This commissioned report for the 2019 RRIP looks at ethical investments in KiwiSaver. Download the report
The 2016 RRIP looked at KiwiSaver from a number of perspectives, including surveys, reports and interviews with the public.
Additional information and resources
Monthly and annual reports on KiwiSaver demographics, methods of joining and payments to providers can be found on the IRD website.
The FMA produces a KiwiSaver annual report and other KiwiSaver research that is available on their website.
Other publications
The research listed below does not represent the views of TAAO. Different approaches, methods, and samples were used in these studies and this should be taken into account when interpreting the results.
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Hobbs, B., & Feld, J. (2021). What would happen if people could choose automatically increasing KiwiSaver contributions?. New Zealand Economic Papers, 1-15.
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Gilbert, A., Scott, A., & Xu, S. (2019). Economies of scale: the case of KiwiSaver fees. Pacific Accounting Review.
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Law, D., & Scobie, G. M. (2018). KiwiSaver and the accumulation of net wealth. New Zealand Economic Papers, 52(1), 1-20.
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Townsend, W. (2018). Behavioural economics and retirement savings: improving Kiwisaver. Policy Quarterly, 14(4)