A panel of financial experts has awarded the KiwiSaver scheme an average rating of 6.5 out of 10 when it comes to its success but are divided over how get more people to join it and existing members to make contributions.
The panel was speaking as part of a two-day conference held by the Financial Services Council which finished on Tuesday.
KiwiSaver has attracted more than 3.09 million members since its launch in 2007 with nearly $90 billion invested. But only 1.88 million members contributed to their account in the last year.
On Monday Consumer Affairs Minister David Clark signalled the Government was looking at tweaking the contribution settings to get more members enrolled.
Panel member Adam Boyd, ASB executive general manager, wealth and insurance, said in his view most people were not saving enough for retirement and many did not have a good understanding of it, based on surveys undertaken by the bank.
"I think on those two points alone there are some pretty big gaps. But when you look at things more broadly in terms of financial wellbeing for New Zealanders it's not great."
Boyd said its financial wellbeing research showed half of all Kiwis were having trouble just coping with their finances and only about 3 per cent of its customers had the highest levels of financial wellbeing.
"You can't look at KiwiSaver in isolation."
Boyd said he was in favour of higher contribution rates for KiwiSaver but to enable that people needed to be able to better balance their saving and spending habits and pay off high interest debt.
Susan St John, director of the Retirement Policy and Research Centre based at the University of Auckland, said it was time for a gender and ethnicity lens to be applied to KiwiSaver.
"KiwiSaver is not designed well for women. When we look at that conventional 40-year career path for men that is not the typical one for women."
She said between the age of 20 and 40 women typically took time off for caregiving and also later in life to look after parents.
"One in three women work part-time compared to one in 10 men. What we are finding is when women enter retirement there is a considerable gender pensions gap."
St John said the Government should change its contributions to extend them beyond the age of 65 allocating people 40 years of contributions so that women working after the age of 65 could also enjoy the same level of contributions as others.
She said employers should also have to contribute to KiwiSaver regardless of whether their employee was contributing to it and she also urged the reinstatement of the $1000 kickstart subsidy.
"That was a very useful signal that they should be in KiwiSaver."
She said abolition of the kickstart in 2015 meant the baby boomers had creamed the best off KiwiSaver.
David Boyle, head of sales and marketing at Mint Asset Management, said KiwiSaver appeared to be doing okay looking at the number of members but when the layers were peeled back the thing that concerned him were contribution rates.
"There are a significant number of KiwiSaver members not contributing or contributing very little. "
He said there reasons for this some 380,000 were children while others were retired and some that were unemployed or had gone through Covid and had seen a reduced income.
"But when you add that up there is a still a large number not making any contributions at all. My concern is if people aren't getting their member tax credits, not contributing it doesn't matter how good that platform is around cost and delivery if people aren't making contributions then that is going to have a massive impact on their financial wellbeing when they reach their non-working years or retirement years."
He said there needed to be a better understanding of why people weren't saving.
Boyle said one area of concern was how people were employed and if people were becoming contractors they were missing out on the employer contribution.
"I think there are a lot of New Zealand that have been moved from salary and wages to contract roles and may have missed the point they are not getting their employer contributions or not making any contributions themselves."
But Andrew Inwood, principle and founder of global research firm CoreData said there needed to be a decision on what was the core purpose of KiwiSaver and how it was supposed to act.
"There is a real risk that it is trying to solve everyone's problems simultaneously and that it acts as the beneficiary arm of government to flatten out the income curve across the unequal opportunity presented to working New Zealanders. I don't think it is designed to do that. I think it is designed to bolster their retirement income."
He said the earlier people could get into a savings behaviour the better.
Inwood said there were lots of arguments for compulsion and there were also arguments for people having a nuanced view of their savings through more interesting and exciting products.
"Where this is derailed is where investments have become the play thing of investors - where they have decided they know the future better than everybody else and start to take risks and start to bend investments - whether through political beliefs, ESG or behavioural beliefs or broad compulsion. Running those balances is hard."
He said the nature of work and saving were changing largely forced by asset price inflation and a desire to have a more pleasurable lifestyle earlier in their life.
"We are much more consumers than we have ever been before." Shops were much more accessible through digital means.
He said New Zealand should focus on helping the biggest number of people to get the best habits in the best way. Inwood said KiwiSaver members should be engaged through apps on their phones in a way that supported instant savings gratification.
"Sharesies have done it well in NZ in Australia there is Spaceship and Raise - they give you little instant rewards and updates. If can get people into that will make a big difference."