NZ must end political pensions divide for good of all, retirement commissioner says

Friday, 14 November 2025

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Retirement Commissioner Jane Wrightson’s wish list for a better retirement system includes an end to political bickering over pensions and piecemeal tinkering with KiwiSaver and for a cross-party 10-year retirement income “roadmap”.

And, Wrightson warns: “No major decisions, such as changing the age of eligibility for NZ Super or making KiwiSaver compulsory, should be made until the roadmap is completed and publicly consulted.”

National and ACT both favour lifting the age of eligibility - National to age 67 by 2044 in a bid to keep down the cost as the population ages, while opposition parties and NZ First do not want to see it rise at all.

And Wrightson, who opposed lifting the age of eligibility in her 2022 review, wanted to see the banning of so-called “total remuneration” contracts that allow employers to pay KiwiSaver employer contributions out of the agreed salary, rather than on top.

The Retirement Commissioner is tasked with periodically making recommendations to government about how to improve the systems, including NZ Super and KiwiSaver, which are the bedrock of a comfortable retirement for individuals.

On Friday , she published her three-yearly Review of Retirement Income Policies.

The New Zealand retirement income system was based on providing basic universal taxpayer-funded NZ Super to everyone, but through KiwiSaver is also designed to support and encourage people to amass their own private wealth to supplement NZ Super, which is not enough for most people to live on, especially those who do not own their own homes.

Wrightson says New Zealand’s retirement income system has solid foundations and is comparatively cost-effective compared to most countries, but is far from perfect.

She says material hardship is lower among older New Zealanders than the population as a whole, but this average masked inequalities.

On average from 2019 to 2024, the “near hardship rate” was 3% for homeowners aged over 65 without a mortgage, 12% for those still paying a mortgage, and 31% for private renters receiving the Accommodation Supplement.

There are growing expectations for a rise in the proportion of over 65s renting as “a lost generation” of people unable to afford to buy a home reach retirement.

Among people aged 45 to 64, renting has doubled since the 1990s from 10% to 23%, while mortgage-free ownership has halved, falling from 60% to 32%.

Across the world, countries are lifting their retirement ages as their populations’ average age increases, however Wrightson says: “In many cases, the new retirement ages will match, or be below, the current age of eligibility in New Zealand.”

Wrightson called on politicians on both sides of Parliament to follow the examples of Finland and Sweden to create a durable, cross-party accord on retirement income policy.

“Delaying planning reduces the range of available options and increases risks,” Wrightson said. “If planning is delayed too long, changes may need to be introduced quickly, catching people by surprise, undermining confidence and making it harder for individuals to prepare for retirement.”

KiwiSaver was a major focus for Wrightson, including making it fairer for segments of the population where a lower proportion of people were getting the best out of it, often as a result of lower pay.

“We have identified real gaps in outcomes, especially for women, Māori, Pacific Peoples and the self-employed. We are pushing for better employer practices, stronger government contributions, and more inclusive enrolment settings,” she said.

She called for four major reforms to KiwiSaver, all of which have previously been identified.

She wanted a ban on the use of total remuneration contracts. When National took power in 2008, it opened what Labour called a “loophole” that allowed employers to strike individual agreements with employees under which they could deduct their employer contributions from those employees’ salaries.

It was supposed to be just for those at the top end of the executive pay scale, but it has ended up being written into the contracts of some of the lowest-paid workers.

Earlier this week, ANZ published its annual report showing ANZ New Zealand’s chief executive got more than $60,000 in employer contributions to her KiwiSaver in the last financial year.

The average KiwiSaver balance is a little over $37,000.

Wrightson said total remuneration employment contracts undermined the intent of KiwiSaver.

She also called for extended parental leave contributions costing $34 million each year to close the gap for the mainly women who have a break in KiwiSaver contributions due to child-raising.

And she called for the Government to consider targeting government KiwiSaver contributions to low-earning people. That could be funded by increasing government spending, or by ending government KiwiSaver contributions to higher earners, Wrightson said.

In Budget 2025, the Government cut government KiwiSaver contributions in half to help pay for tax-breaks for business owners.

Each year, depending on how much a person saved into KiwiSaver, the government used to contributed up to a maximum of $541.43 in government contributions, but Finance Minister Nicola Willis cut that to $260.72 saving the Government $580 million in government contributions in the 2025/25 fiscal year, rising to $649m in 2028/29.

Wrightson is launching the review findings with Commerce and Consumer Affairs Minister Scott Simpson at 11am in Auckland on Friday.