Members are able to withdraw some or all of their KiwiSaver funds to purchase a first home after at least three years' saving.
That has been criticised in the past by those who said it worked against the aim of the KiwiSaver product, which is to provide money to help fund retirement.
As more people buy homes later in life, they have less time to recover from wiping out their retirement savings to fund a deposit.
In 2013, AMP said the Government should review the first-home scheme.
It argued savers should only be able to withdraw any savings they have made above the minimum salary contribution.
"The first-home withdrawal feature of the KiwiSaver scheme is incongruent with the concept of a long-term retirement savings vehicle," AMP wrote in a submission to the Ministry of Business, Innovation and Employment on the KiwiSaver default fund system.
But AMP's general manager of investments and insurance, Therese Singleton, said she believed it was a necessary function of the scheme.
"You've got to remember that before we had KiwiSaver, we had nothing. It allows people to experience the value of saving and it's reflective of the reality, particularly in the Auckland market, of how hard it is to save for the down payment on a house. While it's not purist the sense it is a retirement savings scheme, it does have a lot of value in educating people on the value of saving."
She said it was then up to the provider to ensure they continued the relationship with people who withdrew money, so they would not stop saving once the house was bought.
David Beattie, of Grosvenor, agreed. He said it might encourage some people to join and it was likely that they would start contributing again once they were in their first home.
"On balance it's not a bad function. If they did not have KiwiSaver, they would be saving frantically in another vehicle and not contributing anyway, at least this way they get top-ups and tax credits. It establishes the discipline."
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