The average annual fee paid by KiwiSaver members has barely moved in the past two years but there is a stark difference between the lowest and highest charging funds.
Research by Canstar - a financial rating company - found the average annual fee total for $11,500 in a balanced KiwiSaver fund rose just $4 between 2014 and 2016 to $154.
But the annual fee total ranged between $98.78 and $236.43 for the lowest and highest cost balanced funds - a $137.65 difference.
For a conservative fund the lowest fee was $65.91 compared to the highest at $181.58 while the lowest fee for a growth fund was $107.51 compared to the highest at $218.26.
• See Canstar's full report here.
Jose George, general manager of Canstar New Zealand, said it was good news that the average KiwiSaver fees had barely moved in the past two years.
"Looking at management fees, administration fees, expense fees, trustee fees and annual member fees, Canstar has calculated that for a KiwiSaver member with an account balance of $11,500 in a balanced fund, average annual fees would be approximately $154. In 2014 the equivalent cost was $150."
But he warned savers that the average cost could hide the significant differences in the levels of fees charged between the providers.
The existing players will not change this, it's too profitable and they don't want you to know about it. So we're the disruptive model. Call it Uber, call it Airbnb whatever you want.
"All other things being equal, those differences can eat into your retirement savings over time."
George said performance and fees were the two most significant drivers of KiwiSaver account growth.
"But while fund performance may fluctuate from year to year, the fees charged on a KiwiSaver fund are a constant."
Canstar is predicting fee competition is likely to heat up in the coming year.
Last month a new non-for-profit KiwiSaver provider called Simplicity launched promising to shake up the industry and save the average member up to $65,000 by the time they retire.
Simplicity's administration fee will be $30 a year, plus a 0.30 per cent a year fund management fee.
Simplicity chief executive Sam Stubbs told the Herald at the time of launch that the asset management industry in New Zealand was "ripe for an Uber moment and this is it".
He estimated the industry was making net profits of about $120 million today and that could grow to $1.3 billion by 2030.
"The existing players will not change this, it's too profitable and they don't want you to know about it. So we're the disruptive model. Call it Uber, call it Airbnb whatever you want."
Figures from the Financial Markets Authority show KiwiSaver providers have collectively been paid more than a billion dollars in fees since the scheme was launched in July 2007.