Give Total Rem the flick if KiwiSaver compulsory
KiwiSaver providers want more clarity on how total remuneration packages will be treated with any move towards compulsion.
Tuesday, June 23rd 2026, 6:00AM 
6 Comments
National said on Sunday that, if re-elected, it would make KiwiSaver contributions compulsory from 2028, and move to a 12% contribution by 2032.
Koura founder Rupert Carlyon said that would be a significant increased burden on people with total remuneration packages, who are currently funding contributions of 7%.
“Personally I think total rem has got to go.”
Pie Funds chief executive Ana-Marie Lockyer had a similar concern.
“As KiwiSaver moves toward a compulsory model understanding how employer contributions will be treated within remuneration packages will be important for both employers and employees. In addition, the principle of helping more people save is sound, but the implementation details around hardship exemptions, contribution suspensions and support for lower-income households will be important to get right.”
Booster cheif executive Diana Papadopoulos says "proposed higher contributions from both employees and employers would make an even bigger difference to grow the future wealth of New Zealanders, but the issue of total remuneration arrangements needs to be addressed."
"If they’re not used appropriately it can have a really negative impact on people who will miss out on the contributions they deserve."
The Retirement Commission estimates 45% of employers use a total rem arrangement for at least some of its employees.
Kernel founder Dean Anderson agreed the government needed to look at total remuneration agreements. He said it would not be practical for people to lose up to 12 percent of their salary in contributions.
Matt Mackpherson, Sharesies general manager of funds, said it was not clear whether National’s plans included an end to total rem. “These packages go against the spirit of KiwiSaver and employees who receive these packages are not protected by law when minimum contribution levels increase.”
Polling for Simplicity had shown support for compulsion, but economist Shamubeel Eaqub said that was on the basis that it was the employer contributions that were made compulsory.
“My preference would be to make the employer contribution compulsory, keep the employee contribution voluntary and unlink the two.”
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Comments from our readers
Remuneration should be strictly a commercial decision because employers are the ones paying the wages. NOT for some "expert" preference.
Well, an employer's budget permit a $100k package, he can pay either
a) $88k salary + employer contribute $12k KS, or
b) $94k salary of which $6k deducted for KS + employer contribute $6k.
Depending how PC you guys want to be, and how much time and taxpayers' money you want to waste arguing about the structure.
And yet still we wonder why those pesky younger generations of potential customers wholesale refuse to engage with traditional financial services.
Couldn't be because our mindsets are stuck in the 1950s - no, it must be the kids who are wrong.
National will lose my vote as a serious investor if they continue down the Total Remuneration path. No question...
Im a little confused about the statement, total rem has got to go?
Even more confused by am mentat... blatant wage theft? Confused about young people not thinking about retirement or insurance?
I have had the unfortunate experience at times working for multi national insurance companies and I do not recall them trying to get their mits on my wages, when did this happen?
For centuries young people have not been able to picture themselves retired or believe that they will be multi-millionaires by this time. By the way, i bet they have a bank account.
Hopefully am mentat works it out or, if he is a prosperous employer just continues to give give give to his employees with wild abandon and continues to cheer on any political parties that place more financial burdens on small business where generally the owner has risked all to try and get ahead. Employing people and helping in this way to provide for there families also.
Look beyond just the structure/s. Currently, both employee and employer's contribution are taxed. So, even if I add a 3rd option - $100k salary of which $12k deducted for KS and no employer contribution. It made no difference financially whether it is option a, b or c, assuming law says $12k of the $100k pay package must go to KS.
It will make a difference if a new tax law says, employer's contribution is tax free, then option "a" is a no brainer.
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Total cost of rem is of vital concern to firms. It has always amazed me how politicians of all stripes seems to think it is OK to keep loading costs onto employers.