Compare KiwiSaver election policies from National, Labour, ACT, NZ First and TOP, and see how different contribution rates could affect retirement savings. The Greens and Te Pāti Māori had not released specific KiwiSaver contribution policies at the time of writing.
This election, KiwiSaver has become a more prominent part of the economic debate. The parties differ on how much New Zealanders should save for retirement, whether those savings should be compulsory, and who should pay.
The differences sound technical: 6% versus 4%, compulsory versus default, employer-only versus both sides, tax relief versus contributions. But compounded over a working life, they produce retirements that look very different. To show how different, we modelled the same five New Zealanders under each party’s published settings.
KiwiSaver contribution rates: What each political party is proposing
Default employee and employer rates rose from 3% to 3.5% in April this year and are legislated to reach 4% in April 2028. Membership remains voluntary, with auto-enrolment on starting a new job and the right to opt out or take a savings suspension. The Government contribution was halved in Budget 2025 to a maximum of $260.72 a year and removed for those earning over $180,000. Investment income inside KiwiSaver is generally taxed under the PIE rules using the member’s prescribed investor rate of 10.5%, 17.5% or 28%.
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Act would leave contribution rates on the legislated path and oppose compulsion. It would remove tax on qualifying KiwiSaver and superannuation investment earnings and end the Government contribution for members receiving employer contributions.
National would make KiwiSaver, or an equivalent scheme, compulsory for everyone in work from July 1, 2028. Default rates would step up to 6% each for employees and employers by 2032. Workers could suspend contributions only by meeting the existing hardship test. The package adds a $1500 “Baby Boost” for every child born from July 2027, a Government contribution at the default rate on paid parental leave, and compulsory employer contributions for workers past 65.
Labour would reach the same 6% employer figure by 2032 but by a different route. Employer contributions would become compulsory from July 1, 2028 and would continue even if the employee reduces or pauses their own. The employee default would remain 4%, with workers able to contribute less or nothing. Labour would ban new “total remuneration” contracts that fold the employer contribution into salary, add a parental-leave contribution, and extend employer contributions past 65.
NZ First proposes the highest contribution rates: compulsory membership, with employee and employer rates each rising to 8% initially and 10% eventually, offset by tax cuts. It would also enrol every citizen at birth with a $1000 Crown contribution. No timetable has been published.
TOP proposes a compulsory “KiwiSaver 2.0” at 6% each side, phased in over eight years, with no first-home withdrawals in the new scheme but the ability to use the balance as loan collateral. TOP also proposes progressively reducing tax on contributions and investment income, with KiwiSaver 2.0 becoming fully tax-exempt after 20 years. Existing KiwiSaver would retain its current withdrawal rules.
The Greens and Te Pāti Māori had not released specific KiwiSaver contribution policies at the time of writing.
KiwiSaver projections: How different policies affect retirement savings
We modelled the balance at 65, in today’s dollars, for five illustrative New Zealanders, using starting balances informed by the Retirement Commission’s latest data. The results are intended to illustrate the impact of different policy settings and are highly sensitive to assumptions about future returns, wages and inflation.
The modelling assumes an illustrative long-term growth fund return of 7% a year after fees and tax, 2% inflation and 3% annual wage growth. The 7% return is a modelling assumption and differs from the prescribed assumptions used for statutory KiwiSaver projections. The figures are projections, not predictions, and are rounded.
A 25-year-old on $60,000 with $10,000 saved reaches 65 with about $651,000 under current settings. Labour’s policy lifts that to $743,000 and National’s to $874,000, and TOP’s slower phase-in to $853,000. Act’s tax-free earnings produce $859,000, and NZ First’s 10% contributions $1.36 million.
A 35-year-old on $80,000 with $26,000 saved, who withdraws $40,000 for a first home at 38, ends up with $381,000 today, $443,000 under Labour, $534,000 under National, $517,000 under TOP, $457,000 under Act and $873,000 under NZ First. TOP’s new scheme would bar first-home withdrawals from the new savings, but this worker could retain their existing KiwiSaver balance under the old rules and use that account for the deposit.
A 45-year-old on $90,000 with $45,000 saved gets $337,000 under the status quo, $368,000 under Labour, $413,000 under National, $401,000 under TOP, $390,000 under Act and $590,000 under NZ First.
A 55-year-old on $70,000 with $73,000 saved reaches $182,000 today, $189,000 under Labour, $198,000 under National, $192,000 under TOP, $197,000 under Act and $242,000 under NZ First.
And a 40-year-old part-timer on $35,000 with $15,000 saved who is not currently contributing – an example of the group of members not contributing regularly – ends up with $50,000 under current settings. Under Labour that becomes $132,000; under National $242,000; under TOP $236,000; under Act $66,000; and under NZ First about $355,000.
Status quo
Labour
National
TOP
Act
NZ First
25-year-old, $60K, $10K saved
$651,000
$743,000
$874,000
$853,000
$859,000
$1,361,000
35-year-old, $26K saved, $40K first home at 38
$381,000
$443,000
$534,000
$517,000
$547,000
$873,000
45-year-old, $90K, $45L saved
$337,000
$368,000
$413,000
$401,000
$390,000
$590,000
55-year-old, $70K, $73K saved
$182,000
$189,000
$198,000
$192,000
$197,000
$242,000
40-year-old, part timer, $35K, $15K, not contributing
$50,000
$132,000
$242,000
$236,000
$66,000
$355,000
Projected KiwiSaver balance at 65, today's dollars. Growth fund, 7% a year after fees and tax; 2% inflation; 3% wage growth. Labour figures assume the employee remains at the proposed 4% default; employees could choose to contribute more. For ACT our modelling assumes 8.25% return before tax (and a 1.25-percentage-point tax drag) and incorporates the party's proposed changes to Government contribution eligibility. For TOP, we assume its new scheme starts in 2028 and reaches 6% each in 2036; existing KiwiSaver balances remain subject to current withdrawal rules. TOP's proposed tax concessions are not modelled because the detailed treatment is not yet sufficiently specified; its figures therefore reflect contribution settings only. NZ First figures are approximate and assume contributions rise to 8% in 2028 and 10% in 2032, as no detailed phase-in timetable has been published. Source: Generate modelling.
What the modelling says about KiwiSaver retirement outcomes
Generally, the largest balances result from policies that put more money into the account, because more is being saved throughout a member’s working life. The modelling shows what those policies could produce if implemented; it does not assess the affordability or broader economic effects of requiring higher contributions.
Some assumptions sit behind those numbers. National’s published phase-in increases employee and employer contribution rates by 0.5 percentage points a year from 2029, reaching 6% each in 2032. Labour has specified a 6% employer contribution by 2032 but not the full phase-in, so we assume a similar path for modelling purposes. NZ First has not published a detailed timetable, so we assume contributions rise to 8% in 2028 and 10% in 2032. TOP’s KiwiSaver 2.0 is assumed to start in 2028 at the legislated 4% and rise by 0.25 points a year to reach 6% each for employees and employers in 2036, with the first-home deposit drawn from the worker’s existing balance under the old rules. TOP has also proposed progressively reducing tax on the new scheme’s investment income; the detail is not yet clear enough to model and is excluded. For Act, we use a 1.25 percentage-point illustrative tax drag, with 1% and 1.5% tested as sensitivities. The full modelling assumptions are set out at the end of this article.
The gap between Labour and National is primarily the employee’s contribution. For the 25-year-old, the two parties’ policies produce a $131,000 difference at 65. The two policies eventually have the same 6% employer contribution, but National requires the employee to contribute 6%, while Labour’s default employee rate remains at 4%. Under Labour, however, the employee could voluntarily contribute 6% or more. The comparison is therefore about whether the higher employee contribution should be compulsory.
The cost of that difference is real money each week. A $60,000 earner contributing 4% gives up about $46 a week before tax; at 6% it is $69. For a $35,000 part-timer the step from nothing to 6% is $40 a week.
The biggest divergence is for people who’ve stopped saving. Around 41% of KiwiSaver members were not contributing regularly at the end of the latest reporting year, although that group includes children, retirees and people outside paid work. Among working-age members, non-contribution is concentrated among those on lower incomes or outside fulltime work. Our 40-year-old part-timer on $35,000 with $15,000 in the account is intended to illustrate this group.
Under current settings she reaches 65 with about $50,000 – her existing balance plus 25 years of returns, and nothing else. Under Labour, her employer pays 6% whether she contributes or not, and she reaches $132,000. Under National she is required to contribute as well, and reaches $242,000 – but at a cost of around $40 a week from her current income. That illustrates the trade-off between disposable income today and retirement savings tomorrow.
Act uses a different mechanism, removing tax on qualifying investment earnings rather than increasing compulsory contributions. We assume a diversified growth fund earns 8.25% a year after fees but before tax, compared with 7% after fees and current taxes – an illustrative tax drag of 1.25 percentage points. Under that assumption, our 25-year-old reaches about $859,000 under Act, close to the $874,000 projected under National.
The benefit increases with the amount already saved and the time available to compound. Our part-time non-contributor gains around $16,000 relative to current settings under Act, compared with $82,000 under Labour and $192,000 under National. The result is sensitive to the tax assumption: at an 8% pre-tax return, the 25-year-old reaches about $805,000; at 8.5%, around $916,000.
The differences are smaller for someone closer to retirement because there are fewer years for policy changes to compound. Our 55-year-old gains around $7000 under Labour, $16,000 under National and $15,000 under Act relative to current settings.
The importance of investment returns shouldn’t be lost in the political numbers either: over 40 years, even a one-percentage-point difference in annual returns can have an enormous effect on the final balance. The election may change KiwiSaver’s rules, but it doesn’t change the mathematics of long-term investing.
Parental leave is a small line with a real effect. Six months off work at 33 costs our $80,000 earner roughly $10,700 at 65 in lost contributions and the growth on them. National has specified a Government KiwiSaver contribution at the default rate on paid parental leave. Labour has also committed to a KiwiSaver contribution during paid parental leave, but the amount has not yet been specified, so we have not attempted to compare the eventual dollar effect of the two proposals.
KiwiSaver, compulsory saving and the trade-offs for New Zealanders
The major published proposals would generally result in larger KiwiSaver balances for people who remain in the system, although they achieve that in very different ways. Some increase compulsory employee saving. Some increase employer contributions. One seeks to increase the amount of investment return retained by removing tax. Others combine higher contributions with broader changes to how KiwiSaver can be used. None of the published policies restores the Government contribution to its pre-Budget 2025 level. That is particularly relevant for lower-income members, because they are less likely to be contributing regularly and therefore may respond differently to policies based on employee contributions, employer contributions or tax relief.
There is a bigger issue behind these numbers. Our modelling assumes NZ Super continues in broadly its current form. Our 25-year-old retires in 2066, after many more elections, Budgets and almost certainly further KiwiSaver changes. So balances of $651,000, $874,000 or $1.36 million should not be mistaken for forecasts. Policy can set default or compulsory contribution rates and tax treatment, but retirement outcomes still largely depend on what people actually contribute, the fund and risk level appropriate for them, the returns it earns and the time their money has to grow – and those factors compound through many electoral cycles, not one.
KiwiSaver modelling assumptions and methodology
How we did the modelling
Projections assume retirement at 65, with contributions and balances growing at the rates in the table note. Employer contributions are reduced using the applicable employer superannuation contribution tax (ESCT) rate, based on the employee’s salary and employer contributions. The Government contribution of 25 cents per dollar, up to $260.72, is included where the member qualifies. The first-home example assumes a $40,000 withdrawal in today’s dollars at age 38. For Act, the 1.25-percentage-point tax drag is an illustrative figure; the actual effect varies with a member’s prescribed investor rate and the fund’s asset mix. Using a lower illustrative return of 5.5%, rather than the 7% assumed here, would materially reduce the projected balances but would not change the basic differences between the contribution-based policies. Published phase-in schedules are used where available; where parties have specified an eventual contribution rate but not a full timetable, the assumptions used in our modelling are stated above. Policy settings are as published at the time of writing.
Sources: Party policy announcements; Te Ara Ahunga Ora Retirement Commission; Financial Markets Authority; Generate modelling.