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Proposed changes in 2019 mean more flexibility for KiwiSaver members

15 Aug 2018 by  Amanda Beeslaar

A bill currently before Parliament is proposing some exciting changes to KiwiSaver next year.  The changes incorporate recommendations made by the Commission for Financial Capability in their 2016 Review of Retirement Income Policies.

The proposals are:

  • adding new options for employee contribution rates

  • changes to contributions holidays

  • more KiwiSaver options for over 60s

A change to employee contributions

New employee contribution options of 6% and 10% of gross salary and wages could be introduced from April 2019.  Current contribution rates of 3%, 4% and 8% mean there is a large gap between the 4% and 8% options, so the new rates would give greater flexibility.

Contributions holiday

At the moment employees who have been a member of KiwiSaver for at least 12 months can apply to take a break from making KiwiSaver contributions from their pay.  This is known as a contributions holiday.  

If the bill is passed the name of this break (or contributions holiday) would be changed to ‘savings suspension’.  This change is intended to remove the positive connection with a ‘holiday’ and better reflect what occurs.

The maximum period of a contributions holiday (or savings suspension) would be reduced from five years to one year, meaning anyone suspending their savings would have to consider whether to reapply after one year.  

It is hoped these changes will reduce lengthy contributions holidays being taken by KiwiSaver members.

More options for over 60s

Currently, people aged over 65 cannot join a KiwiSaver scheme but can continue to contribute if they are already a member.  One of the proposed changes is that, for the first time, over 65s could join a scheme, giving them access to managed funds.  

The 5-year minimum lock-in requirement would also be removed.  Members who join after turning 60 could access their KiwiSaver money from the New Zealand superannuation qualification age (currently age 65), regardless of how long they have been a KiwiSaver member.


The proposed changes to contribution rates and contributions holidays would come into effect from April 2019 with other changes from July 2019 if the bill is passed – we’ll keep you updated as we learn more.

Amanda Beeslaar

Amanda Beeslaar is the Head of Retirement Products and responsible for overseeing the operations and growth strategy for the Aon KiwiSaver Scheme and Aon Master Trust. Amanda has been with Aon for nearly 12 years and has a passion for retirement and financial capability and is an active participant in the financial industry.

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