Research by Deloitte has found that, for a member with a $35,000 balance, KiwiSaver’s median total fee was 0.77%, marginally below Australia’s 0.79%. That is despite KiwiSaver operating at a fraction of the scale of the Australian superannuation system, which is around 35 times larger and had a 15-year head start.
The narrow gap between New Zealand and Australia challenges the assumption that greater scale necessarily produces lower fees. Regulation and market design also influence what members ultimately pay.
There is growing cross-party momentum behind a larger KiwiSaver system.
National proposes compulsory employee and employer contributions of 6% each, Labour would lift employer contributions to 6% while preserving employee flexibility, and New Zealand First would eventually take both rates to 10%.
The Green Party supports higher employer contributions, while Act has focused on youth financial literacy and early exposure to investing.
This is not complete political consensus. The differences are real, particularly for workers who cannot easily surrender more of today’s income.
But the debate is increasingly about how KiwiSaver should grow, rather than whether it should grow at all.
The latest KiwiSaver Annual Report from the Financial Markets Authority shows what is at stake.
On March 31, 2026, KiwiSaver held $138.8 billion, up 12.8% in a year and more than double its 2020 level.
Yet the average balance, despite rising 11%, was only $40,340. The figure includes younger and recently enrolled members and is not a measure of retirement readiness, but it reinforces the case for more consistent contributions over longer periods.
At the system level, contributions still exceeded withdrawals by $6.4b, confirming that KiwiSaver remains firmly in its accumulation phase.
But participation remains uneven. Of KiwiSaver’s 3.44 million members, only 2.02 million were contributing. The FMA classified 1.42 million members as non-contributing, equivalent to 41.3% of total membership.
That number includes people aged under-18 or over-65, as well as those temporarily outside paid employment, so it should not be interpreted as 1.42 million workers actively declining to save.
Nevertheless, it illustrates the difference between being enrolled and contributing consistently.
The policy challenge is therefore not merely lifting the percentage paid by existing contributors. It is building a system in which participation is broader, interruptions are less damaging and people with irregular employment are not left behind.
Australia provides a useful, although imperfect, comparison.
Its compulsory superannuation framework began in 1992, and compulsory employer contributions have now reached 12%.
Decades of consistent saving have helped create substantially larger average balances and one of the world’s largest pools of retirement capital.
Australia’s larger balances reflect more than contribution rates, including higher wages, different tax support, stricter access rules and a means-tested public pension. The lesson is not to copy Australia, but to recognise what consistent contributions over decades can build.
Yet Australia’s enormous scale has not necessarily made retirement saving cheaper.
The fees question
Retirement-system costs are shaped by what funds invest in, how those investments are managed, how members are charged and the regulatory settings under which providers operate.
As well as making greater use of active management, Australian funds hold more unlisted infrastructure and direct property. These assets can offer diversification, inflation protection and access to opportunities unavailable through listed markets, but they are generally more expensive to source, value and manage.
Charging structures also differ. Flat-dollar fees are more common and higher in Australia, placing a proportionately greater burden on members with smaller balances.
Australia’s slightly higher median fee does not prove that its members receive poorer value, just as KiwiSaver’s lower fee does not guarantee better outcomes. Investment strategy, performance, risk and service also matter.
So too does access to financial advice. In New Zealand, some KiwiSaver providers incorporate ongoing adviser servicing within their fee and service model, while in Australia comprehensive personal advice is generally charged to the member separately. That makes it important to compare not only the headline fee, but what members actually receive for it.
The Deloitte research examines fees rather than overall value, and its peer groups are representative rather than exhaustive. Even with those qualifications, the headline finding is notable: KiwiSaver has achieved internationally competitive pricing without anything approaching Australia’s scale.
The FMA’s market-wide figures measure fees differently but point in a broadly consistent direction.
KiwiSaver schemes deducted $978.2 million in fees in the year to March 2026, up 12.6%.
Total funds under management grew by almost exactly the same rate, at 12.8%. Fees as a proportion of total KiwiSaver assets have remained relatively stable at about 0.7% for the past three years, following a longer decline from above 0.9% in 2017.
The FMA’s 0.7% figure should not be directly equated with the 0.77% calculated by Deloitte. The regulator compares aggregate fees with total assets across the KiwiSaver market, while the international research calculates a median product cost at a specified account balance. One is a market-wide ratio and the other is a product-level median.
Considered together, however, they suggest KiwiSaver has continued to grow rapidly without its overall fee burden rising materially faster than the pool from which fees are charged.
Greater scale can spread fixed costs, strengthen bargaining power and fund better technology, advice and investment capability. But it does not automatically translate into better outcomes for members.
The goal should not be the lowest possible fee; it should be that every additional dollar of cost has a credible prospect of producing additional value.
Competition has a role here. Transfers between KiwiSaver schemes reached a record $7.4b in the year to March 2026, up from $5.5b the year before. The FMA notes that competition can drive innovation and better service, while cautioning that promotional activity must give members clear and balanced information.
Members should not be encouraged to chase last year’s strongest return or choose a fund solely because it charges the lowest fee. The relevant question is whether cost, investment approach, risk, service and access to guidance together deliver sustainable long-term value.
The political debate is heavily focused on what workers and employers should contribute.
That is understandable. Contribution rates can make an enormous difference when compounded over an entire working life.
But higher contribution rates should also change what members expect from the system receiving that money.
A KiwiSaver system managing $200b, $300b or more should have greater capacity to invest in technology, financial guidance, fraud prevention, member service and investment capability.
Policy design must still recognise that many households have limited capacity to give up more current income. The latest FMA figures provide a reminder that not every household experiences saving as a simple choice between spending now and prosperity later.
Financial hardship withdrawals reached $531.5m in the latest year, while first-home withdrawals reached $2.2b.
Any move towards compulsion must account for fluctuating incomes, periods outside paid employment, self-employment, parental leave and genuine financial distress.
There is also a reciprocal obligation.
If workers and employers are asked to put substantially more into KiwiSaver, providers, policymakers and regulators should be able to demonstrate that a larger system is producing stronger long-term outcomes.
The international evidence suggests New Zealand starts from a position of relative strength.
That is a platform to build on, not a reason for complacency.
KiwiSaver already punches above its weight on overall pricing.
As it grows, the same rigour must extend to everything else it does, so that a larger system means a more secure financial future for New Zealanders.
Generate is a New Zealand-owned KiwiSaver and Managed Fund provider managing over $10 billion on behalf of more than 200,000 New Zealanders.
This article is intended for general information only and should not be considered financial advice. The views expressed are those of the author. All investments carry risk, and past performance is not indicative of future results.
To see Generate’s Financial Advice Provider Disclosure Statement or Product Disclosure Statement, go to www.generatewealth.co.nz/advertising-disclosures/. The issuer is Generate Investment Management Limited.