KiwiSaver Fees — Frequently Asked Questions

The most reliable source is your fund's Product Disclosure Statement (PDS), which every registered KiwiSaver scheme is required to publish. You can find it on your provider's website or on the Disclose Register (disclose-register.companiesoffice.govt.nz) — the official NZ government register of financial products.

Your annual member statement also shows the fees deducted from your account in dollar terms for the year. The FMA's Smart Investor tool (sorted.org.nz/tools/kiwisaver-fund-finder) lets you compare fees across all NZ KiwiSaver funds side by side.

More than most people expect, because fees compound against you every year. On a $50,000 KiwiSaver balance growing at 7% gross per year, the difference between a 0.25% fund and a 1.05% fund (a typical low-cost vs mid-tier active fund gap) over 30 years is approximately $130,000 in terminal balance.

The fee is not just a direct cost — it's also the return you never earned on money paid in fees. That compounding effect is what makes even small percentage differences significant over a long investment horizon.

KiwiSaver funds can charge several types of fees:

• Management fee (MER): The main annual fee, expressed as a percentage of your balance. This is what most comparisons focus on.
• Administration fee: A flat dollar fee some funds charge per year or per member, regardless of balance size. More impactful on smaller balances.
• Performance fee: Some active funds charge an additional fee when they outperform a benchmark. Milford is the most prominent NZ example.
• Contribution fee: Rare now, but some older fund structures still charge a fee on each contribution.

The total of all fees is what matters. Check the 'total annual fund charges' figure in the PDS, not just the management fee headline number.

Sometimes, but not usually over the long term. The evidence globally is that most actively managed funds underperform their benchmark after fees over periods of 10 years or more. In New Zealand, the picture is more nuanced — a small number of NZ active managers have genuine long-run track records of outperformance after fees.

The right way to evaluate is to look at net returns (after fees) over 5 and 10 years at the same risk level. The FMA's Smart Investor tool shows standardised net performance data. A fund charging 1.05% that returns 9% net beats one charging 0.25% returning 7.2% net — but past outperformance doesn't guarantee future outperformance.

Quite possibly. Bank-affiliated KiwiSaver schemes typically charge higher fees than standalone low-cost providers. ANZ, ASB, BNZ, Westpac and Kiwibank funds generally charge 0.5% to 1.0%+ per year, compared to 0.25% to 0.35% for low-cost index funds from Simplicity or Kernel.

The convenience of having KiwiSaver with your bank comes at a cost that compounds over decades. Use the fee comparison calculator to see what the dollar difference is for your specific balance and timeline before deciding whether to stay or switch.

Switching is straightforward and free. You can switch at any time — you don't need to wait for an anniversary or give notice. Steps:

• Choose your new provider and open an account with them directly (online, usually 10–15 minutes).
• Complete the transfer form — your new provider will initiate the transfer of your balance.
• Your employer contributions automatically redirect to the new provider once the transfer is complete.
• Update your PIR with the new provider at the same time.

The transfer typically takes 10–15 business days. Your money remains invested during the transfer period — you won't miss any returns while it moves.

For most people more than 10 years from retirement, a growth or aggressive fund is likely more appropriate than a conservative one. Conservative funds hold more bonds and cash — they're less volatile but deliver lower long-term returns. The stability comes at the cost of compounding.

A 30-year-old in a conservative fund is systematically trading decades of compounding for stability they don't need yet. The time to move into a conservative fund is when you're within 5–10 years of needing the money — close enough to retirement that protecting the balance matters more than growing it.

Check your fund's risk profile and compare it against your expected retirement date before making a decision.

No. KiwiSaver management fees are deducted from your fund before your return is calculated — they reduce the gross return your fund earns. You don't pay tax on returns that were consumed by fees, but you also can't claim the fees themselves as a deduction in your personal tax return.

This is different from some other investment structures where costs can be deducted. For KiwiSaver and PIE funds, fees are simply a reduction in the gross return before tax is applied.