From 1 April 2026, the default compulsory employer KiwiSaver contribution rate increased from 3% to 3.5%, with a further increase to 4% scheduled for 1 April 2028. For most employers, this means a straightforward payroll adjustment. For employers who contribute to both a KiwiSaver scheme and a separate superannuation fund (whether under a legacy arrangement, a collective agreement, or an employer's own scheme) the position is considerably more complex. The financial exposure can be greater than initially anticipated. The exposure will only grow when the rate rises to 4% in 2028.
The answer turns on what type of fund the employer is contributing to alongside KiwiSaver and is particularly relevant where the employer is already contributing above the KiwiSaver minimum rate. Where the fund is a complying superannuation fund, employer contributions generally offset the increased KiwiSaver obligation, so no additional contribution is necessary. For non-complying funds, even where the employer's total superannuation contributions already exceed the new 3.5% rate, those contributions may not count towards the KiwiSaver obligation at all. The employer may have to pay the full 3.5% to KiwiSaver in addition to other super contributions. Redirecting contributions between schemes to manage the cost may seem like an obvious fix, but trust deed rules and employment agreement terms can make that harder than it looks.
If you have employees with multiple super schemes, you should carefully review the specific terms of each scheme and the terms of the employment agreements. Our employment and tax teams work together to provide clear, practical advice on employer KiwiSaver obligations, fund categorisation, and contribution reallocation. Please get in touch with our employment team or tax team if you would like to discuss how this may affect your employer obligations.
