Iwi Investor, the only iwi-managed KiwiSaver scheme, is being wound up after it failed to gain enough members to make it viable.
The scheme was set by Taupo-based financial advisory group Iwi Investor in April 2011. But its latest annual report shows it had just 213 members as of March 31 last year.
The scheme was officially closed to new members on Monday and is now in the process of being wound up. Members are being offered the chance to switch to another KiwiSaver scheme or be automatically put into one of the government-appointed default schemes.
The company's website said it was winding up the scheme because it had not been able to attract enough members in time to make it viable to continue as an operating KiwiSaver scheme. "This is unfortunate as the scheme is fully compliant and it has always been the goal to grow as the only Maori owned and operated scheme in New Zealand."
Members have been told they can no longer apply for money for part or full withdrawal relating to first-home buys, financial hardship or retirement as the scheme is now frozen until the wind-down is complete. It has until December 1 to pay members' money across to other schemes.
More than 2.6 million people belong to KiwiSaver but a report by analysts Morningstar last week found the provider industry has become more concentrated over time.
The six largest providers look after 85.9 per cent of the KiwiSaver assets under management and four out of the six are connected to banks.
That hasn't stopped new low-cost non-profit scheme Simplicity opening to investors this week.