On 22 May 2025, the Government announced its 2025 Budget which, among a number of funding reprioritisations, made several significant changes to New Zealand’s KiwiSaver regime.

This Financial Markets article outlines the changes to the regime announced in the Budget, and discusses some of the implications these changes may have for KiwiSaver providers.

Changes to the KiwiSaver regime

The Budget makes the following changes to New Zealand’s KiwiSaver regime, with the stated intention being ‘to support Kiwis to save more for their first home and retirement, and to make the scheme more fiscally sustainable’:

• The default rate of employee and employer contributions for KiwiSaver will rise from 3% of salary and wages to 4% in two steps. From 1 April 2026, the rate will go to 3.5% and then, from 1 April 2028, to 4%. 
• Employees will be able to temporarily opt down to the 3% rate, if they choose (but will only receive employer contributions at that rate).
• The Government will extend the government contribution to 16 and 17-year-olds from 1 July 2025, and extend employer matching to 16- and 17-year-olds from 1 April 2026.
• The annual government contribution will be halved to 25 cents for each dollar a KiwiSaver member contributes each year (1 July to 30 June), resulting in a reduced maximum annual government contribution of $260.72 from 1 July 2025.
• KiwiSaver members with an income of more than $180,000 will no longer receive the government contribution from 1 July 2025.

The last two changes will not impact the current year’s government contribution, which will be paid out in July/August this year.

The Taxation (Budget Measures) Bill (No 2) was introduced late in the afternoon on 22 May 2025 and sets out the legislative amendments required to give effect to the changes (and other announced Budget changes).

Takeaways for KiwiSaver providers

The initial thing on the mind of every KiwiSaver provider will likely be the volume of documents, advertising material, and website pages that will need to be updated to reflect the changes.

The Bill includes transitional relief to address this issue from a ‘defective disclosure’ point of view. Non-compliance with ‘financial markets legislation’ (which includes the Financial Markets Conduct Act) and the Fair Trading Act relating to the relevant provisions of the Bill will be ignored provided it does not continue on or after 1 November 2025, or, if it relates to a disclosure document, on or after 1 January 2026.

However, the amount of work involved in updating all affected documents and information should not be underestimated. We suggest that KiwiSaver providers undertake a review of their disclosure documents as well as all advertising materials and website pages, to scope out the required changes and timing for each.

Another area where these changes could have a real impact on KiwiSaver providers (and employers) is in the IT and administrative systems changes necessary to support the contribution changes. Again, advance planning may be required, to ensure the changes can be implemented on time.

Start a conversation

If you would like to discuss any aspect of the KiwiSaver changes or any other financial services matter, please contact David Ireland on +64 4 498 0840, Catriona Grover on +64 4 498 0816, Tom McLaughlin on +64 9 375 1124, Mark Schroder on +64 9 375 1120 or Connor Seddon on+64 4 915 0841 or you can email the team at bankingandfinancialmarkets.nz@dentons.com