The NZ Super maths facing every Kiwi worker – and what you can still control

Saturday, 28 March 2026

NZ Super could remain the universal benefit we have today that rewards everyone equally for a lifetime of hard work – but this would come at a cost.

To pay for this, the average tax rate paid in this country would have to increase from around 21% today to 32% in 2065.

If that doesn’t sound like a great idea, we could incrementally lift GST to 32%.

Alternatively, to offset the increase in health spending and superannuation, we’d have to decrease our expenditure in other areas (like education and law and order) from about 13% of GDP today to less than 5% by 2065 – and it would have to keep going down from there.

These are just some of the suggestions put forward by Treasury in its long-term fiscal statement published in 2025.

If you’re interested in building enough wealth to achieve the objective of a good retirement and perhaps even having enough to set aside for your loved ones in this country, then these numbers matter. They will inform the strategies we use to build wealth in the coming decades.

At the November 2025 release of the Retirement Commission’s triennial report on the state of the sector, outgoing Retirement Commissioner Jane Wrightson gave us a window of around 10 years to develop and start executing a viable plan.

We can’t control what changes this Government or the next puts forward in the next ten years, but there are some things we do have power over.

Pushing KiwiSaver

New Zealand’s two-tier retirement system is currently far more reliant on Superannuation, given the average Kiwi today only has around $69,000 in KiwiSaver by the retirement age.

Ideally, the balance can be shifted over time as Kiwis contribute more to KiwiSaver and their balances grow.

This is why politicians across the divide currently agree that contributions need to increase over time, which will create a better balance – and cost the Government less.

This does not mean the need for Superannuation will be negated entirely. Recent data from Sharesies shows that even if our KiwiSaver contributions rise to 12% (6% by both the employer and the employee), approximately four in ten Kiwis would still not have enough for a basic retirement spanning ages 65 to 90.

The more we contribute to KiwiSaver, and the earlier we lift those contributions, the more opportunity we give that money to compound into a healthy nest egg over time.

This can be difficult, but it’s one of the few things we can control. As long as KiwiSaver remains voluntary, the onus rests on us to put away as much as we can toward our retirement.

This doesn’t have to be a painful experience. There are simple things we can do to ease into contributing a little more.

For starters, parents can make a difference at an early stage by advising their kids to contribute more as soon as they begin their KiwiSaver journey. You won’t miss money if it never hits your bank account. This teaches kids to live within their means while developing a savings habit as soon as they start earning.

In a similar vein, you could also time your contribution increases with any pay rises you receive over your career. That way, you can up your contributions without taking a significant hit to your take-home pay.

However, these issues only work if you’re on the right kind of employment contract.

Employment contract issues

One of the most common concerns expressed in the comments section of the Stuff Money section is that the total remuneration contracts used by many employers end up hurting staff who are trying to save for retirement.

In such a contract, an employer’s KiwiSaver contributions are included as part of the worker’s gross salary rather than on top of the salary. It effectively means employer contributions come out of the worker’s salary.

Professor Claire Matthews from the Massey Business School says these contracts are only suitable for a small number of employees who are highly paid.

“For highly paid employees, there is a question as to whether there is the same need for KiwiSaver, and they have a greater ability to negotiate a package that’s fair to them as well as their employer,” she says.

If they are being used for employees who don’t fall into that highly paid category, then they are likely being used inappropriately, says Matthews.

John Berry, the chief executive of Pathfinder, goes even further, saying these contracts are unfair and can even be insidious for lower-wage workers.

“KiwiSaver employer contributions should be paid on top of salary, not out of it – and unbelievably, both sides of the Government have sat back and allowed total remuneration contracts to continue,” he says.

“Allowing employer contributions to be carved out of an employee’s salary undermines the purpose of KiwiSaver. It’s not just confusing, it’s unfair. It means less money going into long-term savings and weaker outcomes for Kiwis at retirement. Many people won’t even realise this is happening to them.”

The point Berry makes here is important.

It could pay for workers to take note of the small print in their contracts, so that they know whether or not they’re on a total remuneration contract.

As employer contributions rise in April, this attention to fine print could be worth 3.5% in your salary package.

How to change the system

Both Matthews and Berry would like to see total remuneration clauses used only for high earners, with Berry suggesting $180,000 as the cut-off mark.

Fraser Whineray, the former chief executive of Mercury Energy, who has since dedicated his time to rethinking KiwiSaver, would like to see total remuneration phased out by 2031.

He’d also like to see employer contributions become compulsory regardless of whether employees contribute or not.

To do this, he suggests the adoption of a so-called “glidepath” that would see the minimum employer contribution drop to 2% in 2027 and then increase by 0.5% per annum thereafter, with the aim of reaching an employer contribution rate of 12% by 2047.

By publishing a 20-year schedule, Whineray believes businesses and households can plan for the changes decades in advance, which builds confidence rather than anxiety.

So what are your thoughts on total remuneration contracts, KiwiSaver contribution rates and NZ Super payments? Let us know in the comments section below.