NZ Super will have to change. Are you saving enough for what’s coming?

Sunday, 22 March 2026

At the 2026 New Zealander of the Year Awards, sustainability winner Mike Casey (founder of Rewiring Aotearoa) noted we can’t wait for the Government to lead. While the slow wheels of bureaucracy turn, individuals and business owners must also do their part

Casey was discussing electrification, but his logic applies equally to KiwiSaver.

In a recent document proposing policy changes to politicians, former Mercury Energy CEO Fraser Whineray was emphatic: “For KiwiSaver to materially support retirement, total contributions need to reach approximately 12% of income.”

New Zealand currently sits at 6% (with the employer and employee each contributing 3%). While the employer and the employee minimum contribution will rise to 3.5% each this April and again in 2028, the timeline is tightening.

In the 1970s, we had seven workers per retiree, and that ratio is projected to trend toward 2:1 in the coming decades.

Something’s got to give. The government will either have to cut other services or superannuation will have to change. Whether it’s means-testing or an increase in the eligibility age is yet to be seen, but the runway is shortening.

Currently, almost two-thirds of New Zealanders contribute only the bare minimum to KiwiSaver. A further million Kiwis don’t contribute at all.

So while we wait for incremental improvements from the Government, Kiwis and business owners need to start questioning whether they’re saving enough to weather the changes that could eventuate in the future.

Escape the default trap

Sophia Blair, a research director at insights agency TRA, tells me many people fall into the default trap when it comes to KiwiSaver.

She says we tend to treat defaults “as advice from the system,” leading to a complacency issue where we lock in the starting point but then never revisit it.

By confusing a default for expert advice, we convince ourselves that we’re doing the right thing even if that isn’t really the case.

Blair says this complacency presents an opportunity for employers to step in at strategic moments.

She says the best time to have a conversation with an employee would be at a moment when personal finance is already top-of-mind.

A pay rise offers a good opportunity for an employer to open the discussion with an employee, she says.

“At that point, people are already in the mindset, so asking them to review their KiwiSaver contribution probably doesn’t feel as big as it normally might.”

Normalising money talk

Kiwis don’t like to talk about money, but Blair argues that the awkwardness can be reduced if the conversation is framed as a standard part of employee wellbeing.

“An employer could set up conversations with financial services providers to get people talking about their finances,” she says.

There’s also an opportunity here to use data in an interesting way by showing employees how they should be tracking, based on their age or life stage.

It’s about making those barbecue conversations happen, so employees can rethink their complacency.

The onus still rests on the employee to act, but businesses can nudge their staff to consider their options.

Onboarding rethink

David Boyle, the general manager of KiwiSaver at Fisher Funds, thinks the issue could be addressed even earlier in the employee journey.

He’d like to see more employers offer better information at the onboarding stage.

A 2024 Money Month survey showed that 84% of New Zealanders have not had any formal financial training, and 58% said their primary source of financial education was making a mistake.

To avoid a simple mistake like a low contribution rate compounding over decades, Boyle says he’d like to see more employers explain basic investing terms to any new staff introduced to the company.

“Compound interest, investing over time, not trying to time the market—all of these concepts should be in the onboarding pack, and it should be in plain English,” says Boyle.

Employers strapped for time could alternatively partner with a preferred KiwiSaver provider that steps in to offer a financial refresher to staff from time to time – and, in doing so, keeps the conversation going.

The total remuneration question

In a total remuneration package, an employer’s KiwiSaver contributions are included as part of the worker’s gross salary rather than on top of their salary. In these contracts, both the employer’s contribution and the employee’s contribution are taken out of the worker’s salary.

Whineray wants to see employers move away from this practice. He understands why some employers might do it, but worries it will hurt employees once contribution rates start to increase.

His hope is that employers using total remuneration contracts don’t just deduct April’s 0.5% employer KiwiSaver contribution increase directly from staff when it comes into effect, because it will function as 1% decrease in take-home pay (when combined with the employee contribution). This, says Whineray, will do little to encourage employees to contribute more to KiwiSaver. If anything, it could lead to staff pulling back on contributions.

Under his policy recommendations, Whineray suggests the eventual removal of total remuneration clauses and the introduction of compulsory employer contributions. But this won’t happen overnight.

In the meantime, he says, there’s an opportunity for employers to rethink how they’re applying these clauses – particularly because they affect almost half the working population to some degree.

Economic strain

None of these conversations are easy. Kiwis and our businesses have been through a tough few years, and we’ve seen this in the rising number of hardship withdrawals and contribution suspensions in recent years.

Employers are uniquely placed to see this strain in their staff. In response to permanent staff suspending their contributions, ASB has made the call to continue employer contributions for a set period of time as the staff member gets back to a position of being able to contribute.

“We believe KiwiSaver is one of the most important tools for building financial security,” a spokesperson from ASB said, adding that the bank also matches employee contributions up to 4%.

ASB is, of course, a large employer and not every business could afford to this. But it’s an example of what some employers could do.

Small steps like this won’t automatically bridge the savings gap with Australia, but it’s a good example of how company policy can play a role in ensuring that retirement savings continue even during the rougher patches for staff.

As we wait for our politicians to make changes, there are many opportunities for both businesses and individuals to make small decisions that feed into big results down the line.

What are your thoughts on this issue? Do you have any ideas on we can increase our contribution rates? And are you worried about how NZ Super might change in the future? Let us know in the comments section below.