Fraser Whineray: Masses are missing the KiwiSaver bus
Sunday, 29 March 2026
ANALYSIS: Fraser Whineray’s KiwiSaver awakening about just how flawed KiwiSaver was came when he was chief executive of Mercury, sometimes working from a desk in the energy retailer’s call centre.
It was a great place to hide, he recalls.
“No one would look for me there, so I could just get my head down, and do some work,” Whineray says.
He was being handsomely paid, and his 3% matching employer and employee contributions were really adding up.
He struck up a conversation about KiwiSaver with one of the women working the phones, and she admitted she wasn’t sacrificing 3% of her before-tax salary to secure her 3% employer contribution.
“I said, ‘Hang on. You're not even getting the employer contribution?” Whineray says.
It was confronting to see the KiwiSaver inequity scheme in full operation.
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Employer contributions go to people who can afford to sacrifice some of their salary. Those that can’t afford to save, or are not well-schooled in the benefits of doing so, miss out. The rich get richer. The struggling miss out.
“I went to HR and said, can they just put in a half, and we put in 3%, because they should be getting the employer contribution,” he recalls.
The answer was no. “The scheme rules don't actually allow that,” he was told.
Dreaming of a KiwiSaver rebirth
Whineray left Mercury in 2020 but his interest in KiwiSaver, and belief that it had to be reformed, continued as he was part of the Prime Minister’s Business Advisory Council set up by Jacinda Ardern in 2018.
The council is no more, but Whineray has not given up on the idea that KiwiSaver could be used to deliver a wealth and wellbeing boost to New Zealand and, critically, to deliver a better deal, and better future, to young Kiwis, and take the pressure off NZ Super, which is becoming more and more costly as the population ages and the dependency ratio of workers to retired people worsens.
KiwiSaver hit around $140 billion at the end of last year, but US President Donald Trump’s war on Iran has seen balances fall.
But KiwiSaver would have been a lot, lot bigger, had a succession of National governments not cut KiwiSaver incentives in 2009, 2012, 2015 and 2025, and Labour-led governments fail to reverse those cuts.
Of special concern was when National Finance Minister Bill English cut the $1000 kickstarter for each new KiwiSaver member. Since that move, the proportion of under 18s in KiwiSaver has plummeted from 30% to just 15%.
“It keeps getting diluted, and it doesn't have a destination,” Whineray says.
Whineray is touting a comprehensive reform package he calls KiwiSaver 2.0, the blueprint for which landed in MPs’ email inboxes and snailmail pigeonholes last week.
He has the ambitious dream of creating a durable KiwiSaver that has cross-party support, and will endure across at least six elections, and is seen as critical national infrastructure, just as Australia’s private pensions system is on the other side of the Tasman Sea.
He believes there is popular support from business and the wider public, and he believes it is critical for national prosperity.
Australia are beating us hands down
Australia’s pension wealth of A$4.5 trillion has driven a virtuous circle of investment and wealth generation which is enriching Australians, and Whineray would like to see a similar circle operating here.
“If we don't sort the savings out, which then leads to wealth and productivity … we will be opening a state parliament in Auckland as the next state of Australia in 50 years,” Whineray says.
Currently Tasmania is considered the butt of the joke in Australia, with the other states looking down on it as a little backward. In his disaster scenario 50 years hence, New Zealand would end up replacing Tassie as the laughing stock.
“We cannot continue to have human capital loss to Australia,” Whineray says.
Nor can we continue to have so many people being left behind by KiwiSaver.
Masses missing the KiwiSaver bus
“A lot of people are not currently on the KiwiSaver bus, and that's a real issue,” Whineray says.
And unless something changes, the numbers left behind will only increase.
Prime Minister Christopher Luxon’s plan for KiwiSaver is to ramp up contributions gradually from 3% employee plus 3% employer today to 6% plus 6% by 2032.
But, KiwiSaver would still remain voluntary. And the other KiwiSaver-destructive National policy remains in place. That is the policy of “ total remuneration” contracts, which allow employers to effectively opt-out of making matching contributions.
That was a loophole brought in by National in 2008, and which Labour failed to reverse in its years in government.
But, recalling that contact centre worker and the masses of lower-paid workers on total remuneration contracts, Whineray says: “Who can actually stay on that bus?”
His answer: “A few rich people will stay on the bus and they'll clean it out the whole way because this is great.”
His KiwiSaver 2.0 would be structured around lifestages.
Newborn to 18
At birth, babies would have a KiwiSaver account opened automatically unless their parents opted them out.
They’d have $5000 of taxpayer money deposited into a growth fund and, if parents put in $100 each year, the taxpayer would match that.
Whineray envisages generations growing up to arrive in the workforce more financially astute with estimated KiwiSaver balances of $20,000 to $25,000 regardless of the circumstances of their birth.
“They'll actually have half the first year of a finance degree under their belt because they'll understand what the S&P 500 is,” Whineray says.
“They'll understand what an equity cycle is because they've had to ride it.”
Working life
The funding of the $5000 starting balance would come through the end of the $260-a-year government incentive for workers, which used to be over $1000 before National’s successive cuts to it.
Whineray would see KiwiSaver become partially compulsory. He’d see the end of total remuneration contracts, and employers would be required to make contributions starting at 2% and rising by 0.5% each year to reach 12% by 2047.
He describes this as “not a shock, but a schedule”.
Employee contributions would be voluntary. That would mean lower-paid people would be able to get on the bus.
The result, he says, would be slightly slower wage growth, slightly higher prices, slightly lower company profits, but it would see the creation of a massive pool of long-term savings that could do for New Zealand what Australian private pensions have done for that country.
The self-employed would have to save a percentage of their declared income to get them on the bus.
The government would pay employer contributions during statutory periods of parental leave under KiwiSaver 2.0.
There would be a first home withdrawal cap, however, of 50% of the balance, to avoid artificially pushing up house prices in a constrained housing marker by depleting KiwiSaver balances.
KiwiSaver 2.0 would also include a cross-party agreement not to hike KiwiSaver taxes as the scheme swells in size.
Coming off the clock
Whineray believes the age at which people will qualify for NZ Super will one day move to 67.
The age at which people could access Whineray’s KiwiSaver 2.0 would be 62, an age that would enable people who have had hard, physical working lives like builders to get their hands on the money.
His KiwiSaver 2.0 would also have approved decumulation funds, which would help people turn their savings into annual income they can use to supplement NZ Super.
Would KiwiSaver 2.0 make it easier for future governments to water down NZ Super?
“The reality is NZ super may stay universal. It may have an age shift. It might get means tested,” Whineray says.
“People think NZ Super is actually set in concrete, and I try to point out that it's actually not.”
He thinks that regardless of whether KiwiSaver 2.0 happens, NZ Super will get diluted.
Robust modelling
Whineray needs KiwiSaver 2.0 to be modelled, and he wants Treasury and the Reserve Bank to do it in conjunction with Inland Revenue.
“The modeling to actually prove a bunch of the stuff out through equilibrium models and everything else is quite complicated,” Whineray says.
“There's so many different settings for tax, and self-employed, and working for families, that to actually see what it means across the population is quite challenging.”
Will they do the modelling? Will Government ask them to do it?
Sunday Star-Times asked the major political parties whether they would back Treasury and RBNZ resources being used to run the numbers on KiwiSaver 2.0.
Finance Minister Nicola Willis would not commit.
“I acknowledge that Fraser Wineray has made a number of suggestions. We will take time to consider these before commenting in any detail,” she said.
Labour didn’t respond, and neither did ACT or NZ First.
Chlöe Swarbrick, Green Party co-leader, said: “While the Green Party can’t fully endorse all of the recommendations without detailed analysis, we see the benefits of having a robust discussion in this country around ways to improve KiwiSaver in the long-term.”