Should KiwiSaver be compulsory?
KiwiSaver providers are divided on whether it is appropriate for the scheme to be made compulsory.
Monday, January 19th 2026, 6:17AM
In November, NZ First said it wanted to make KiwiSaver compulsory, and to boost the contribution from employers and employees to 10%, with a tax break to offset it.
But some providers said they were not convinced that compulsion was appropriate.
Dean Anderson, founder of Kernel KiwiSaver, said it was not the right move now.
“Membership and contribution rates are already strong among people in their 30s and 40s. The priority should be making KiwiSaver more attractive - not mandatory - by lifting contributions and incentivising participation for those not yet in the scheme.
“That means smarter settings, such as improved tax incentives, high contribution rates, or redirecting government contributions to 0–18-year-olds to drive early engagement and long term savings habits.
“We need to pull the levers that make KiwiSaver work for everyone, while preserving flexibility for different socio economic needs.”
He said financial stability would need to come first.
“Financial stability must come first. Paying down high interest debt is often a better outcome for Kiwis than being compelled into savings they can’t readily access.”
Rupert Carlyon, founder of Koura, said if it was compulsory without any additional upside being added for members, people would just see it as another tax.
“You need incentives to make people want to contribute, though we can’t afford the current retirement system so we need people to start saving more and maybe compulsion is the only way to achieve this. Compulsion will be seen, and rightly so, as a precursor to means testing [of the pension]… I see compulsion as inevitable but it can’t be done without incentives.”
But Greg Smith, investment specialist at Generate, said making KiwiSaver compulsory would ensure more people had a more comfortable retirement.
“There are currently over 3.3 million New Zealanders enrolled in KiwiSaver with total funds now exceeding $100 billion. But there are still around a third who are not contributing. Making KiwiSaver compulsory would bring over a million more people into the fold.”
He said the national appetite for an obligatory superannuation scheme was likely to have improved since the last referendum on the issue in 1997, when 91.8 percent voted against it.
“There were significant flaws with that proposal, with workers required to contribute up to 8 percent of their income, but it was primarily employee-funded and widely perceived as a pay cut.
“An initial poll conducted of our followers on social media, conducted in September, shows that a clear majority are in favour of lifting minimum compulsory KiwiSaver contributions to 10 percent.
“Perhaps no greater advertisement of the merits of a compulsory superannuation scheme, with elevated minimum contribution rates, can be seen than across the Tasman. In Australia, compulsory super is the primary retirement system, and is a pool which exceeds A$4 trillion. It has made Australia the fifth-largest holder of pension fund assets in the world. Compulsory super has been a huge factor in Australia’s economic resilience over recent decades.”
At the recent ASSET magazine round table discussion, Pie Funds chief executive Ana-Marie Lockyer said she supported compulsion but agreed there would need to be a pathway to achieve it.
ANZ managing director for funds management Fiona Mackenzie said it should be compulsory but said there would need to be affordability considerations. Some people may not be contributing because they cannot afford to do so.
The providers said there would need to be a cross-party agreement about the approach so that the issue did not become a political football.
Chris Wilson, co-chief executive of Harbour Asset Management, said there should be more attention paid to people who were not getting the benefits of KiwiSaver, such as those who were self-employed or not working.
“The superannuation cliff is only getting bigger and we're not doing things to change KiwiSaver to pick up that part of market …compulsory gets you part of the way. But actually it doesn't cover those things where you're not in the traditional workforce with an employer.”
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