New Zealand’s retirement savings regime rated B

While it looks like New Zealand has slipped down the rankings, it actually improved one place, Mercer says. There were four new entrants to the index this year. New Zealand’s position last year was 14/48, this year 17/52.

"So on a like for like basis, we’ve actually improved by one spot."

The ranking recognises the underlying strength of NZ Super and KiwiSaver, with index values for New Zealand’s retirement system recording slight increases across the three sub-indices of adequacy, sustainability, and integrity.

New Zealand’s ranking was impacted by the voluntary nature of KiwiSaver, relatively low contribution rates, the disadvantage to primary caregivers’ KiwiSaver balances when taking a break from the workforce, and the fiscal impact of an aging population.

Mercer New Zealand chief executive Anna Scott said the need to continue strengthening KiwiSaver participation and increasing the contribution rate is well-understood and it is pleasing that changes are underway.

“We have seen the Government start to increase KiwiSaver contribution rates, but in our opinion these changes do not go far enough. To improve our retirement system, we need to take a broad approach including refocusing KiwiSaver primarily as a source of retirement income and making the scheme more equitable for people who take time out of the workforce to raise families, as data shows women are reaching retirement age with significantly lower KiwiSaver balances than men.

“Mercer believes it is the right time to have a serious conversation about gradually increasing the age of eligibility for NZ Super, to ensure we future-proof New Zealand’s retirement system.
“However, we appreciate pension reform is never simple. Assessing possible outcomes is essential, which is why employers, governments, and pension providers should all have a voice in shaping more resilient pension systems. We can develop changes for the long-term, providing policy certainty for the future,” Scott said.

Recommendations for New Zealand to improve its position on the Index and future-proof its retirement systems include:

• Increasing the level, coverage and tax efficiency of KiwiSaver contributions, thereby increasing the level of assets set aside for future retirement benefits
• Raising the state pension age over time
• Raising the level of household savings and reducing the level of household debt
• Introducing a carer’s savings credit or contribution for those caring for young children or elderly relatives that is not contingent on the carer making a contribution
• Focusing on retirement income as the primary purpose for KiwiSaver and work to increase decumulation (draw-down) options.

The retirement income systems of the Netherlands, Iceland, Denmark, and Israel retained their A grade in 2025. For the first time, Singapore received an A grade, the only country in Asia to achieve the rating. Over the Tasman, Australia retained its B+ rating.