KiwiSaver recently celebrated its tenth birthday. So, it’s worth considering – has the country’s primary retirement savings scheme actually been successful at helping New Zealanders grow their retirement savings?

Although there’s certainly room for improvement, in our view, KiwiSaver has been a tremendous success. Here’s why:

The brilliance of KiwiSaver lies in the fact there is more than one entity contributing to an investor’s account. If an individual contributes their own money, their employer and the government also contribute. This money is then pooled together in a fund that can earn investment returns.

This powerful combination is evidenced by the fact that since 2007 investors have contributed $17 billion of their own money[1] and have received a massive $29 billion in gains.

These gains are composed of $10b employer contributions, $8b government contributions, and roughly $11b of investment returns achieved by KiwiSaver providers. Incidentally, there has also been ($5b) in member withdrawals over this time. The table below details these gains.[2]

KiwiSaver gains by type ($ million)

Source: IRD annual KiwiSaver Statistics 2017, Morningstar KiwiSaver Survey June Quarter 2017 and FMA KiwiSaver Annual Reports 2010-2017.

Putting in $17b over the course of ten years and receiving $29b in gains, is a fantastic deal.

In addition to diversifying Kiwis’ wealth outside of property, KiwiSaver has been an excellent vehicle to help create additional retirement savings for thousands of New Zealanders.