"Perhaps more disconcerting for potential members is that KiwiSaver's rules have been changed again by the Government, which starts to chip away at certainty around retirement planning arrangements."
Stubbs made the comments as default KiwiSaver provider Tower released its monthly analysis of the IRD's KiwiSaver member count for May.
"May saw continued overall increase in KiwiSaver sign-ups, with net total membership rising 1.5% for the month to break through the 1.73 million mark," Stubbs said.
"Opt-in via KiwiSaver provider grew the strongest at 1.8% increase, to take membership counted by that joining type to more than 860,000.
"Coming in just behind for growth rate was the automatically enrolled by employer category, which grew by 1.4% to over 640,000, and after that opt in via employer, which lifted less than 1% to 230,000."
Stubbs said that if monthly KiwiSaver membership growth rates continue to average around 1.5% for the rest of the year, over 26,000 new members will sign up per month, taking total membership to around 1.8 million by the end of the year.
However, the Budget changes have created uncertainty around future membership numbers.
"The wild card was changes to KiwiSaver announced in the Government's Budget on the 19 th of May," Stubbs said.
"There was some evidence of slowdown in KiwiSaver sign-up rates over Budget month, but the most affected categories were opt in via employer and automatically enrolled by employer, and these categories may be more expressive of labour market conditions.
"Opt-in via provider would have been the category most likely to have shown up as a bellweather for public concern over the impact of the Budget on KiwiSaver, but the monthly sign up rate for May was similar to April's."
While Stubbs said the Budget changes may make the scheme less attractive in the short run, "its financial impacts on KiwiSaver member accounts do not flow through until 2012 in the form of taxation of employers' previously tax-exempt minimum contributions and halving payments of the Government's Member tax Credit subsidy."
He said Government rule changes to the scheme could dent confidence in KiwiSaver as a vehicle for long-term savings, but "we probably won't know for a few months yet whether the growth rate of sign-ups to KiwiSaver has been seriously impacted by the Budget."
Despite the recent changes, Stubbs remains convinced of the scheme's worth.
"Even with KiwiSaver becoming less generously supported by the Government, it is still an efficient, low-cost, well-regulated retirement savings vehicle."
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