Growth in the KiwiSaver scheme is being offset by declining funds in other investment vehicles, though New Zealand's still better placed than most to deal with a rising pension bill, according to Finance Minister Bill English.
In the past 12 months, KiwiSaver funds under management grew $2 billion to $11
billion, of which $950 million came through government subsidies, English said at the launch a retirement savings survey.
"It is a better vehicle, and people are responding to that, but actually you only get more savings when you save more," English said. "If funds are moving from other managed vehicles to this one, we may or may not be better off."
English said the government hasn't formed a view on the looming review of KiwiSaver default schemes, but that it has to be completed by 2014. In that review, options such as the life-cycle option, where investment risk-weightings decrease as members get older, will probably be considered.
"If they are going to stay with the default funds in significant numbers, there is a significant interest in whether those funds are the right kind of vehicle for everybody," he said.
