Stand-alone and employer-sponsored superannuation schemes are shutting up shop because of the costs and challenges involved in meeting new regulations due to come into force before the end of this year.
Dairy giant Fonterra decided to close down its superannuation fund last year and is in the process of paying out members.
Maury Leyland, Fonterra director of people, culture and safety, said the decision to wind up the scheme was made after considering the decline in its membership, Fonterra's preference for KiwiSaver and the difficulty in the scheme complying with the new Financial Markets Conduct Act by December 2016.
"This decision meant a change for just 332 of Fonterra's staff. All new staff are now automatically enrolled into KiwiSaver.
Fonterra is not alone is closing its scheme which had around $100 million invested in it.
The Mutual Superannuation Fund which was set up in 1969 was wound up at the end of January.
Executive director Maureen Heine said the cost of transitioning the fund and the ongoing cost of running it was deemed prohibitive.
"It's the reality of the changes coming in," Heine said.
The scheme which had 545 members at June last year is selling its property assets and giving money back to them.
Mike Woodbury, a partner with Chapman Tripp, who specialises in giving advice to employer based superannuation funds, said around one third of the schemes it was advising would not transition to the new regime.
"A mildly alarming number of employer sponsored schemes are still in the option-taking phase. There is a risk of over-shooting the deadline," he said.
Of those schemes just under half would probably shut, he estimated, with a slight majority choosing to roll their members into a master trust - a set up which allows multiple employers to group their super funds together under one umbrella.
A mildly alarming number of employer sponsored schemes are still in the option-taking phase. There is a risk of over-shooting the deadline.
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Those that were opting to wind up were paying their members out and then giving them the choice of joining KiwiSaver.
Woodbury said employers were either contributing the same amount of money to KiwiSaver or were paying the minimum contribution of 3 per cent and boosting employee's pay to make up the difference.
He said the costs of keeping a superannuation scheme open would increase under the new law because of new requirements to have a licensed independent trustee and more regular reporting.
"That means members will be exposed to more costs."
Rolling schemes into a master trust was one way to keep costs down, he said.
But it also took time for the process to occur with schemes having to give their members at least a month's notice of the transfer.
Woodbury said he was concerned that a number of employer based superannuation schemes would not meet the December deadline.
Rob Everett, chief executive of the Financial Markets Authority, which is in charge of licensing all the schemes, said last month that there had been plenty of warning of the new regulations and he did not believe there were any excuses for failing to meet the deadline.
But Woodbury said employers were not like financial service providers.
"Some of them are going to need more time to get things done."
He warned that up to six months grace period may be needed after the deadline.
An FMA spokesperson said of the 134 super schemes it considered to be employer-sponsored 81 had indicated they were likely to continue while 18 had indicated they were considering either transition or closure.