Allowing people to contribute to KiwiSaver at less than 3 per cent for a limited time and shortening the contribution holiday from five years to one are just two of eight options being proposed to help get more people saving into the scheme.
The Commission for Financial Capability has been consulting the KiwiSaver industry, government agencies and 2000 members of the public on what they think could be done to improve the scheme as part of its three-yearly review of retirement income policy.
Despite high take-up - around 2.61 million people are in KiwiSaver - about 40 per cent do not contribute to it on a regular basis.
While a large group of the non-contributors are likely to be children, once the under 18-year-olds are removed there is still a group of about one in four adults who are signed up but not putting any money in.
David Boyle, general manager of investor education at the commission, said for some people the 3 per cent minimum contribution rate was too high.
"We wonder if a lower rate of 1 per cent or 2 per cent for a limited period would reduce the number of people taking contributions holidays and help more people get started."
About 125,000 people are sitting on a contribution holiday. People can put a hold on putting money into KiwiSaver for any reason after they have been in it for one year.
At present they can take a holiday for up to five years before they are asked to review the decision and more than 80 per cent of those on a break are on the five-year holiday.
Boyle said while some people may need an extended break, a five-year suspension could be too long.
Instead it is proposing a one-year maximum holiday with the ability to renew it a year at a time.
Another proposal is to let people over the age of 65 join KiwiSaver.
At present people cannot join the scheme once they hit 65 even if they are still working.
The commission wants feedback on its proposal before making any recommendations to the Government. It will report back before the end of the year.
But that does not mean the Government will actually make any of the changes. Past recommendations by the commission, including raising the age of eligibility for New Zealand Superannuation, have been rebuffed. The public can have their say on the options at cffc.org.nz
8 ways to improve
1. More flexible contribution rates - allowing people to contribute at 5, 6 or 7 per cent not just 3, 4 or 8 per cent.
2. Ability to choose annual rise of 0.5 per cent or 1 per cent up to a cap.
3. Reduce your rate to 1 or 2 per cent for a limited time.
4. Make providers show the annual fee on your statement in dollars.
5. Reduce the contribution holiday from five years to one year with the right to renew it yearly.
6. Let people over 65 join.
7. One-off auto-enrolment to sign up all those not already in KiwiSaver.
8. Allow people to join multiple KiwiSaver schemes.