Fund manager and business columnist, the late Brian Gaynor, called it a dreadful decision - possibly the worst ever made by a New Zealand Government.
In December 1975 the new National Government led by Robert Muldoon abolished the 37-week-old compulsory New Zealand Superannuation Scheme, introduced by the previous Labour Government.
At the time there was just $40 million in the scheme.
But - as New Zealanders were quick to recognise last week when the Government tried to apply GST to KiwiSaver fees - small sums grow exponentially when invested well.
Sadly the voting public wasn't as sophisticated in 1975.
In the 1975 election campaign Muldoon succeeded in convincing the public that the centrally-controlled Super scheme was some kind of socialist initiative.
He hammered his message home with the infamous Dancing Cossacks TV advertisements.
In a hugely popular Herald column in 2007, Gaynor looked back at the consequences of that decision and did the maths on what the scheme would have been worth if it had been left in place.
He concluded that the fund would have been worth $240 billion if it were still in place in 2007.
"Without this decision we would now be called 'The Antipodean Tiger' and be the envy of the rest of the world," he said.
"We would have a current account surplus, one of the lowest interest-rate structures in the world and would probably rank as one of the top five OECD economies."
He argued that we would still own ASB Bank, Bank of New Zealand and most of the other major listed companies that are now foreign-controlled.
"Our entrepreneurs would have a plentiful supply of risk capital and would probably own a large number of Australian companies," he said.
"Most New Zealanders would face a comfortable retirement and would be the envy of their Australian peers. The Government would have a substantial Budget surplus and we would have one of the best educational and healthcare systems in the world."
New Zealand would have led the world in terms of savings, he said.
Based on that $240b projection each worker would have had $111,200 of superannuation assets compared with $6300 and A$74,400 ($86,821) in Australia in 2007.
The scheme would represent 146 per cent of GDP whereas Australian superannuation, which is considered to be a benchmark for the rest of the world, represents only 82 per cent of the country's GDP.
With help from Gaynor's former colleagues at Milford Asset Management we took a look at what the ill-fated fund might have been worth today.
Needless to say the numbers don't look any better 15 years later.
Milford's head of KiwiSaver Murray Harris says his team worked off Gaynor's original methodology and made some assumptions about population growth, employment rates and hours worked, and average weekly earnings.
On that basis a conservative estimate of the scheme's likely value was $835b, Harris said.
That's $163,000 per New Zealander and about 200 per cent of the country's annual GDP.
By comparison the total pool of KiwiSaver funds is just 10 per cent of that figure at $83b.
The average KiwiSaver balance is (a surprisingly low) $26,000.
By comparison Australia's gold standard compulsory super scheme - launched in 1992 - is now worth $3 trillion.
If we'd stuck with it in 1975 we'd be well ahead of that on a per capita basis.
If there's anything positive to come from last week's KiwiSaver GST debacle, it was that Kiwis demonstrated a more sophisticated understanding of the exponential power of investing, Harris said.
"There's nothing like having a bit of skin in the game," Harris said.
"It was fantastic and very positive to see just how engaged the public was and the level of understanding."
KiwiSaver had been a big step in the right direction and as it has grown so too has the public understanding of investing decisions.
But the lost opportunity around the original compulsory super scheme was a big one, he said.
"Having a large pool of retirement funds allows a country to invest in big infrastructure projects which enhance the economy. Or to be involved in public-private partnerships.
"You've only got to look across at Australia."
Harris and his team stuck with the original 1975 contribution rate of 4 per cent from employees and 4 per cent from employers.
But there was no reason to assume it couldn't have been increased.
In Australia where they started the compulsory scheme at 3 per cent from the employer, they now contribute 9.5 per cent and it is gradually being increased to 12 per cent.
In New Zealand the KiwiSaver scheme contribution regime has gone backwards with the last National Government cutting the member tax credit by half and taxing the employer contributions.
We pay income tax on the contributions we make and tax on the returns at a prescribed investor rate where the top rate is 28 per cent, Harris noted.
In Australia contributions are taxed at a maximum of 15 per cent.
Harris said he hoped the interest in KiwiSaver over the past weeks might translate to some debate about doing more in this country to strengthen the scheme and grow New Zealand's savings pool.
Brian Gaynor's methodology
• Assumed original annual contribution rate of 8 per cent for every employee.
• A balanced portfolio of 50 per cent invested in New Zealand Government bonds and 50 per cent in the New Zealand sharemarket.
• Annual returns based on the performance of Government bonds and the NZX benchmark index.
• Two per cent of the fund withdrawn every year for retirees.
The $240b figure is conservative as no dividends are taken into account until 1995, offshore returns were higher over the past 30 years and no account is taken of the ability of investment managers to outperform the benchmark indices.