So Labour wants everyone but the lowest earners to put aside 9 per cent of their income for retirement savings?
Sounds like some people could be in for a pay rise when they retire.
Labour leader David Cunliffe says his party's proposal to make KiwiSaver compulsory will pull around 500,000 mostly low paid workers into the retirement savings scheme.
But in my view the numbers don't seem to stack up, particularly for the low-income workers which the policy is designed to capture.
According to the KiwiSaver calculator on the sorted website someone on the current $14.25 per hour minimum wage who saves for 40 years from the age of 25 will potentially have a $268,450 savings pot at a contribution rate of 4 per cent plus 4 per cent (there is no facility to put in 4.5 plus 4.5).
That equates to around $312 a week for 25 years in retirement.
Added to the current New Zealand Super living alone allowance of $366.73 after tax and you get $678.94 a week.
That's higher than the after tax income of $489 per a week that the person is earning while working.
Why should a worker be forced to live more frugally in their working life than in their retirement?
Labour's 9 per cent contribution rate is in line with recommendations by industry body the Financial Services Council which has been lobbying heavily for an increase in the rate.
The council represents New Zealand's major insurers and banks many of which are KiwiSaver providers.
It has always said the contribution rate lift is needed to ensure Kiwis have a comfortable retirement but its members would also stand to gain a lot of money via fees if the contributions rates were to rise.
The council would see Kiwis saving an amount equivalent to the pot of money used to fund New Zealand Super - around $350,000.
But a report from the Commission for Financial Literacy and Retirement Income suggests a much smaller nest egg may be needed.
The commission looked at three separate studies on how much money people need to save to live comfortably in retirement and arrived at a savings target of up to $205,000 per person on top of New Zealand Super for a 25 year retirement.
The 9 per cent contribution rate would well exceed that level over a 40 year saving timeframe for those earning the minimum wage.
It also noted that provided a person retired in a mortgage free home New Zealand Super was enough to provide a no frills standard of living and said this suggested that home ownership should be the first goal in retirement planning.
Forcing people to save 9 per cent could potentially put the goal of debt-free home ownership even further out of reach for some people.
It could mean people end up with a large retirement nest egg only to use it to pay off their mortgage in retirement.
This trend has already been noticed in Australia where superannuation savings is compulsory.
As well as not being able to use the money to pay down their mortgage it would potentially restrict people's investment in businesses and ability to pay off other debts.
Is this really what New Zealanders want?