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National on Economy
Economy · In depth

Compulsory KiwiSaver, and three changes around it

In depth — from National’s policy document

National proposes making KiwiSaver contributions compulsory for all workers from 1 July 2028, at the default rate on a glidepath reaching 6 percent each from employee and employer by 2032. Alongside it: a $1,500 Baby Boost with automatic enrolment at birth, a government KiwiSaver contribution for people on paid parental leave whether or not they contribute themselves, and compulsory employer contributions for workers over 65 — all from 1 July 2027.

Compulsory from
1 July 2028
For all workers, at the prevailing default rate
Contribution glidepath
6% each by 2032
Combined 12%, which the party says matches Australia
Baby Boost
$1,500 at birth
With automatic KiwiSaver enrolment, from 1 July 2027
Parental leave
Government contributes
Even if the parent does not, from 1 July 2027
Workers over 65
Employer must contribute
From 1 July 2027
Cost
$110m rising to $362m
2027/28 to 2030/31; from future Budget allowances
Who it would apply to
  • All workers, from 1 July 2028, at the prevailing default contribution rate
  • Self-employed people, at the employee-equivalent rate — 4 percent rather than the combined 8
  • Every child born in New Zealand, automatically enrolled with a $1,500 payment
  • People on paid parental leave, who receive a government contribution regardless of their own
  • Employees aged over 65, whose employers would have to contribute as for anyone else
Who is excepted
  • Employees already saving through another employer-managed defined contribution scheme
  • People receiving paid parental leave, for the period they are out of work
  • Anyone suspending contributions — but only by meeting the existing hardship test

How it would work

What compulsory means here

Contributions would be made at whatever the default rate is at the time, following an already-legislated glidepath: 3.5 percent from 1 April 2026, rising 0.5 points in 2028 and each year after until employee and employer rates each reach 6 percent on 1 April 2032. The document says this is aimed at low-income, part-time and self-employed workers, whose contribution rates it describes as lower than average.

The exceptions, and the hardship test

Three carve-outs: another employer-managed scheme, the period someone is on paid parental leave, and suspension — which would require meeting the hardship test already used for early withdrawal. The self-employed would pay only the employee share, 4 percent rather than the combined 8.

$1,500 at birth, and what it grows to

Every child born in New Zealand would be enrolled automatically and receive $1,500. The document works through the compounding: at an assumed long-run return of about 7 percent a year, that becomes roughly $5,000 by age 18 with no further contributions. Costing assumes about 60,000 births a year; it notes there were 57,700 live births last year.

Paid parental leave contributions

Today the government matches contributions made by someone on paid parental leave. The document says only about 1 in 5 eligible people kept contributing in the year to June 2025, so 4 in 5 got nothing. From 1 July 2027 the contribution would be paid regardless, at the default rate applied to the parental leave payment.

Workers over 65

Employers are not currently required to contribute for employees aged 65 and over. National would require it from 1 July 2027, on the same basis as for other employees. The document notes around 1 in 4 New Zealanders over 65 are in paid work and says this implements a 2024 Retirement Commissioner recommendation.

Worked examples

These scenarios and figures are National’s own, from the document.

Jess, on paid parental leave twice
The situation
  • Jess is 30 when she has her first baby in 2028, and 33 for her second in 2031
  • She receives the maximum paid parental leave entitlement, 26 weeks, after each birth
What happens
  • The first period adds $625 to her KiwiSaver, the second $952
  • Assuming a 7 percent average annual return, that is about $15,000 more by the time she is 65
Jeff, working past 65
The situation
  • Jeff is 65 in 2027, earning $70,000 a year
  • He chooses to work three more years and retires at 68
What happens
  • His employer is now obliged to contribute to his KiwiSaver
  • The document puts him about $6,300 better off by 2030

What they expect it to cost

2027/28
$110.1m
2028/29
$323.4m
2029/30
$342.2m
2030/31
$361.6m

National’s own figures, covering the Baby Boost, the parental leave top-up, the wider government contribution and the Crown’s own cost as an employer. The document says the cost would be met from future Budget operating allowances, and that it has deliberately not offset the total with the additional employer superannuation contribution tax the changes would raise, to keep the estimate conservative.

In their own words

“Contributions will be made at the prevailing default rate as part of the agreed glidepath, lifting combined default contributions to 12% by 2032, matching Australia.”

Building the Future: Enhancing KiwiSaver for Everyone · Compulsory savings

“The cost of this policy will be met from future Budget operating allowances.”

Building the Future: Enhancing KiwiSaver for Everyone · Fiscal impact

“This directly implements a recommendation of the Retirement Commissioner, who called for employer contributions to be required for those over 65 in the Commission’s 2024 review of KiwiSaver settings.”

Building the Future: Enhancing KiwiSaver for Everyone · Employer contributions for workers over 65

What the document doesn’t settle

Points the document defers or leaves undefined. These are gaps in the document, not criticisms of the policy.

  • The document does not say what happens if a worker simply does not contribute — only that suspending requires meeting the hardship test.
  • It does not say whether the self-employed rate stays at 4 percent or follows the glidepath up to 6.
  • It does not say whether the $1,500 Baby Boost would be indexed.
  • The cost is to come from future Budget operating allowances rather than from identified savings or revenue.
Summarised from Building the Future: Enhancing KiwiSaver for Everyone, published by New Zealand National Party. Read 2026-08-14.
Link to the published document to come.
Back to National on Economy

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