New Zealand retirement income system 

Retirement income in New Zealand traditionally comprises of two parts: 

• Superannuation from the government known as New Zealand Superannuation 
• Private income from pension plans (the KiwiSaver scheme and other superannuation schemes) and investment assets. 

What you should know 

Superannuation 

New Zealand's public pension, the New Zealand Superannuation (NZS), primary goal is to provide social protection rather than to replace earnings. 

New Zealand has not legislated for a compulsory retirement age and employers are not allowed to specify a mandatory retirement age in employment contracts; however the non-contributory flat-rate pension is paid to all residents fulfilling the residence requirements at age 65 until death. The beneficiary must have lived in New Zealand for at least 10 years since turning 20 with at least five years spent in the country after the age of 50. 

NZS is maintained between 65% and 72.5% of average ordinary time weekly earnings. Benefits are reviewed each year and adjusted to take account inflation and wages. All benefits received under NZS are subject to income tax and the pension is financed from general tax revenues. The pension is paid regardless of whether the person is still employed or not. 

It is neither income nor asset tested. 

KiwiSaver schemes 

KiwiSaver is a voluntary, work-based savings initiative designed to help New Zealanders with their long-term saving for retirement. It’s open to all New Zealand citizens and people entitled to live in New Zealand indefinitely. 

Employees are automatically enrolled into KiwiSaver when starting a new job (unless under age 18 or over age 65), but can opt out. Others may join voluntarily. Contributions are made by the employee, their employer, and the government (if eligibility criteria are met). 

Contributions 

• Employees contribute a minimum of 3% of gross salary or wages (with options to increase to 4%, 6%, 8%, or 10%). 
• Employers contribute a minimum of 3% of gross salary or wages. 
• Government contributions are available annually, subject to eligibility. 

Government contributions 

The government contributes towards members' savings based on personal contributions, up to a maximum annual amount. 

From 1 July 2025: 

• The rate is 25 cents for every $1 contributed, capped at a maximum of $260.72 per year. 
• To be eligible, members must earn $180,000 or less of taxable income annually. 
• 16- and 17-year-olds become eligible for the government contribution, provided other criteria are met. 

The contribution for the income year ending 30 June 2025 remains at the previous rate of 50c per $1, capped at $521.43, and will be paid in July–August 2025. 

Default contribution rate increases

As part of changes introduced in Budget 2025: 

• From 1 April 2026, the default employee and employer contribution rates will increase from 3% to 3.5%. 
• From 1 April 2028, the default rates will rise again to 4%. 

From 1 February 2026, members may apply for a temporary rate reduction to remain on the 3% rate for a 3–12 month period. This application may be renewed multiple times. Employers may choose to match the reduced rate. 

Employer contributions for younger members

From 1 April 2026, employers will be required to make KiwiSaver contributions for employees aged 16 or 17, provided those employees are making contributions from their wages. Previously, employer contributions only applied to employees aged 18 to 65. 

Other employer sponsored superannuation schemes 

A superannuation scheme is a scheme which is not a KiwiSaver scheme but is also established principally to provide retirement benefits, and is registered under the Superannuation Schemes Act 1989. When KiwiSaver commenced, existing registered superannuation schemes could choose to convert to a KiwiSaver scheme, establish a KiwiSaver scheme within an existing superannuation scheme, or continue to operate separately from KiwiSaver.