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KiwiSaver: An Initial Evaluation of the Impact on Retirement Saving WP 11/04

Publication Details

  • KiwiSaver: An Initial Evaluation of the Impact on Retirement Saving
  • Published: 16 Dec 2011
  • Status: Current
  • Authors: Law, David; Scobie, Grant M; Meehan, Lisa
  • Pages: (3),iv,37
  • ISBN: 978-0-478-37876-4 (Online)
  • Ref. No: WP 11/04
  • Pub. type: Working Papers
  • JEL Classification: D10; D91; E21

KiwiSaver: An Initial Evaluation of the Impact on Retirement Saving

Published 16 Dec 2011
Page updated 18 Jan 2012

Authors: David Law, Lisa Meehan and Grant M Scobie


KiwiSaver is a voluntary savings scheme aimed at increasing the retirement wealth of a target population. A critical element shaping the success of KiwiSaver is the extent to which individuals participate in the scheme, given its voluntary nature; and, having chosen to participate, the extent to which their attitudes and practices toward savings have been modified by their participation. This paper presents the results of an initial evaluation to assess individuals' saving behaviour following the introduction of the KiwiSaver scheme. It is based on the findings of a national survey conducted in 2010.

We find that members adjust their savings portfolio such that only about one third of the contributions they make to their KiwiSaver account represents additional savings. Further, only 22% of respondents report that their expected retirement income would not be sufficient to meet basic living costs. Critically, regression analysis finds no relationship between KiwiSaver membership and any shortfall or excess in respondents' expected retirement income relative to either the amount needed to meet basic needs in retirement or to be comfortable.

Consequently, examination of standard measures of programme efficacy such as target effectiveness and leakage suggests that KiwiSaver has been only modestly successful in reaching the target population and that leakage to the non-target population was high. This implies that the ongoing cost of the scheme per target member could exceed $13,000 per year. Finally, recognising that KiwiSaver may have had broader objectives not explicitly stated in the Act, the scheme's possible effect on national saving was examined. In the long run the effect on net national saving appears marginal at best.

This Working Paper is available in Adobe PDF and HTML format Using PDF Files.


Browse Section/Chapter Download/Page Range

Executive Summary

1 Introduction

2 Data

3 Methodology

4 Results

5 Conclusions



twp11-04.pdf (327 KB) pp.(3),iv,1–37


The authors are grateful for comments received from Professor James Banks of the Institute for Fiscal Studies in London, Katherine Meerman and Simon Leong of IRD and seminar participants at both Inland Revenue and the Treasury. Special thanks are due to the external referees (Roger Hurnard and John Gibson), the internal referees (Lynda Sanderson and Mike Nutsford) and the editor (Paul Rodway).

An earlier version of this paper was presented to the 52nd Annual conference of the New Zealand Association of Economists held in Wellington, June 2011, where it was awarded the inaugural prize for the best analysis of economic policy.


The views, opinions, findings, and conclusions or recommendations expressed in this Working Paper are strictly those of the author(s). They do not necessarily reflect the views of the New Zealand Treasury or the New Zealand Government. The New Zealand Treasury and the New Zealand Government take no responsibility for any errors or omissions in, or for the correctness of, the information contained in these working papers. The paper is presented not as policy, but with a view to inform and stimulate wider debate.

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