Nearly half of members now invested in growth funds
KiwiSaver has continued to show resilience in the face of economic volatility, with total funds under management rising 10% to $123 billion in the past year, the Financial Markets Authority (FMA) reported.
Growth was driven by $12.2 billion in contributions and $6.4 billion in net investment returns. Despite cost-of-living pressures, contributions rose 8.8% year-on-year.
FMA chief executive Samantha Barrass (pictured) said KiwiSaver has cemented itself as New Zealand’s primary retirement savings tool.
“There is probably no other financial product that is so closely associated to the future financial wellbeing of New Zealanders as KiwiSaver,” Barrass said.
“This year’s annual report shows KiwiSaver has become a trusted scheme that is firmly recognised as the primary retirement savings strategy for most New Zealanders.”
Almost half of all members are now invested in growth-category funds, reflecting KiwiSaver’s long-term purpose as a retirement scheme.
The report follows new FSC polling showing strong support for Budget 2025 changes such as extending contributions to 16-year-olds and lifting the default rate to 4%, while most oppose cutting the government contribution. FSC CEO Kirk Hope said it’s time for a national strategy to secure better retirement outcomes and unlock capital for investment.
Concerns over rising non-contributors
Despite strong growth, Barrass raised concerns about the growing number of members not contributing to their accounts.
“The number of non-contributing members continues to rise, with 30% of members of working age not contributing,” she said. “That’s up from about 20% in 2010. Even among active choice members, there are 1.2 million who are not currently contributing.”
She warned the long-term costs of pausing contributions could worsen inequality between contributing and non-contributing members. FMA also noted a rise in hardship withdrawals as economic pressures mount.
Industry role in lifting contributions
Barrass urged providers to step up engagement with members, particularly defaults.
“For default KiwiSaver providers, there are obligations to engage with default members throughout their retirement savings journey, including during times of volatility, and near the end of a member’s savings suspension,” the FMA chief said.
“By providing support and evolving to meet the needs of members, providers and the FMA can ensure KiwiSaver continues to work as intended, helping New Zealanders build long-term savings and independence in retirement.”
Key facts from the report
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KiwiSaver funds under management: $123bn (+10%)
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Contributions: $12.2bn (+8.8%)
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Net investment returns: $6.4bn
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30% of working-age members not contributing
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Just under half of members invested in growth funds
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Total fees remain stable at 0.7% of FUM
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Over 65s are generally managing withdrawals rather than cashing out all at once
For more information, read Barass’ speech and access the KiwiSaver annual report.
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