The country's third largest KiwiSaver provider is to remove its annual administration fee and reduce its fund fees.
Westpac New Zealand which has 380,000 KiwiSaver members will ditch its $12 admin fee and cut its fund fees by between four and 26 basis points by the end of September.
The changes come three months after KiwiSaver regulator the Financial Markets Authority issued guidance to all KiwiSaver providers on providing value for money when it comes to fees.
It told providers they must review their fees annually and prove they are providing value for money or face potential regulatory action.
Around three million New Zealanders belong to KiwiSaver and have more than $76 billion invested in the scheme.
Last year's annual KiwiSaver report by the FMA found Kiwis paid $538.9 million in fees in the year to March 31, 2020 - up 12.3 per cent on the prior year. That was despite investment returns being down 122 per cent over the year.
Fees for the year to March 31, 2021, are expected to be even higher with most KiwiSaver funds having performed strongly in the wake of a big bounce in global sharemarkets.
Asked if the fee changes were being made as a result of the FMA guidance Simon Power, acting chief executive of Westpac New Zealand, said the bank regularly reviewed its fees.
"Uultimately the size and scope of these reductions was up to us."
Power said its fee changes would deliver significant savings for members.
"Whether they're saving up for retirement or a first home, we're helping them reach their goals faster."
He said annual fees for a member with a $20k balance would drop from $130 a year to $80 a year for its conservative fund, from $158 to $100 for its balanced fund and from $172 to $110 for its growth fund.
In May, Westpac was reappointed a default KiwiSaver provider. Default schemes receive an allocation of new members who are automatically enrolled in KiwiSaver through switching or starting a new job and don't choose their own scheme.
Westpac's new default fund opens in December and will charge 0.4 per cent of funds under management. While this fee is lower than its normal balanced fund offering at 0.5 per cent its default fund fee is the highest of the six newly appointed providers.
Fees for the new default funds start from 0.2 per cent for the NZX's Smartshares fund. Simplicity is charging 0.3 per cent, BNZ 0.35 per cent, Booster 0.35 per cent, Kiwi Wealth 0.37 per cent.
Power said he believed its KiwiSaver scheme was fairly priced particularly in light of its active investment approach, responsible investment commitments and levels of service.
The last time Westpac cut fees on its KiwiSaver scheme was in December 2019.