The Financial Services Council (FSC) says there needs to be a comprehensive review of KiwiSaver to make sure it is fit for the modern age.
It says KiwiSaver is 16 years old and is worth $100 billion, so now is the time to look at all aspects of the scheme to check for faults and look for improvements.
Such a review would be done after the election and would need support from both major political parties. It would be non-partisan, and would be carried out by economics or actuarial experts.
It would consider all aspects of KiwiSaver, including the possibility that it might be made compulsory, as happens with comparable schemes in Australia. It would also look at gender issues and what happens when people take time out from making contributions.
The FSC and the Financial Markets Authority (FMA) do annual reviews of KiwiSaver already. But the FSC thinks a far deeper investigation is needed, because KiwiSaver has become so important for so many people.
“The recent news of KiwiSaver funds reaching the $100 billion mark shows the time is right for a detailed review," says the chief executive of the FSC, Richard Klipin.
Klipin says several things need to be looked at, such as the continuity of KiwiSaver membership. He says there are just over three million people in the system, but sometimes they join and then they stop, due to interrupted work patterns, and that can bring them personal disavdvantage.
Another issue would be how KiwiSaver blends in with other retirement schemes, such as personal savings, workplace superananuation programmes and the state-run NZ Super.
Klipin adds the question of compulsory contributions also needs to be looked at.
He says Australia has had a system of compulsory retirement savings for over three decades, which has given individuals a nest egg which is ten times the New Zealand equivalent.
"The average balance in Australia (per person) is somewhere between $240,000 and $320,000 depending on age and the male/female gap, whereas our average has us sitting just under $30,000," Klipin says.
"And their total retirement savings sector is worth $3.5 trillion, whereas ours is $100 billion."
Klipin is adamant the review he wants would be politically neutral but support would be needed from both main political parties to make it work.
However, there does not seem to be much chance of that support being won at this stage.
The National Party finance spokesperson Nicola Willis says a review of KiwiSaver is not her party's policy at this election.
"We are broadly happy with the KiwiSaver settings and how it is working, so we are not proposing any review of those settings," Willis says.
The Labour leader Chris Hipkins says his Government and previous Labour administrations have been constantly trying to improve KiwiSaver.
And he indicates general support for the kind of special, non-partisan review, that Klipin wants.
"I am always open to non-partisan approaches when it comes to savings for retirement."
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