The minimum employer contribution to KiwiSaver should be lowered from 3 per cent to 2 per cent or an employer should be required to put money in regardless of whether their staff member does, a new report by the finance industry recommends.

The Financial Services Council, an industry body made up of banks and insurers including KiwiSaver providers last night released a white paper with a raft of suggestions for changing the retirement savings scheme which its says could be worth nearly $1 trillion by 2050.

It wants to expand the coverage of KiwiSaver and increase participation in the scheme which already has nearly three million members.

Despite the high membership it says 1.2 million Kiwis have stopped contributing.

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The FSC believes bringing down the minimum contribution would make it easier for low income earners and allow a savings habit to begin.

Alternatively it proposes decoupling the employer and employee contributions.

"This would mean that the employer would contribute regardless of whether the member is or not."

It says the government's annual contribution of up to $521 could then be used to incentivise those who do save themselves.

It also wants accident and illness insurance built into KiwiSaver and to encourage self-employed people to use KiwiSaver through making the cost of talking to a financial adviser tax-deductible.

The FSC, which is holding a two day conference starting today, says there are also problems with too many Kiwis just contributing the minimum amount and thinking that will be enough to have a comfortable retirement.

"Those will not necessarily be the case, and the reality is that they may not discover that fact until it is too late."

It suggests the government's annual $521 contribution could be applied when the member saved at least $2000 or contributed 4 per cent and suggests there should be the ability for employee contributions to automatically increase by small amounts like 0.25 per cent for a set period.

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Richard Klipin, chief executive of the FSC, said it commissioned KiwiSaver 2050 to help start a debate and conversation about how KiwiSaver can be refined and improved in future years to better deliver for New Zealanders.

"KiwiSaver is still a young scheme, but it is growing fast and we estimate that almost one trillion dollars in funds will be under management by 2050 ($498bn in real terms). These are big numbers and the potential positive benefits for New Zealand if we get the KiwiSaver framework right for future demands are significant."

"We're not claiming to have all the answers but we're hoping that KiwiSaver 2050, by taking a holistic look at the KiwiSaver framework rather than an issues based approach, will help further the debate."

KiwiSaver 2050 identifies six key issues which include increasing participation, building contribution levels, from accumulation to decumulation, focus on financial literacy, improved scheme efficiency and effectiveness and political leadership and policy stability.

Klipin said each area was complex and there were no quick fixes.

"These ideas and the many others in KiwiSaver 2050 are just a start and we look forward to an ongoing conversation with industry, regulators, politicians and the public about how best to grow KiwiSaver and deliver New Zealanders a world-class retirement", he added.

The Retirement Commissioner is in the process of a three yearly retirement policy review which is set to be presented to parliament in December and the government is in the process a reviewing KiwiSaver and the default provider schemes.