Forsyth Barr savings specialist Damian Foster was concerned over the inequalities that were likely to become more apparent as KiwiSaver developed.
Someone in their 20s, who started saving now in KiwiSaver, could have between $500,000 and $1 million in their account on retirement, while others who had saved nothing, or very little, would be reliant on government superannuation.
"There is a huge difference between those who save and those who do nothing and are a large burden to place on the State. We are looking at people not joining and that's the problem," Mr Foster said.
He urged the John Key-led Government to become more involved in an education campaign about why people should join KiwiSaver, particularly around the unsustainability of the current scheme as the baby boomers started retiring.
Labour finance spokesman David Cunliffe told the Otago Daily Times, when he looked back over the past two years, the Government had been responsible for two major errors of judgement: bringing in a bunch of unaffordable tax cuts for people who did not need them and "beggaring national superannuation" by cutting out the pre-funding contributions.
"On the current track, we can't pay the current costs of superannuation," he said when contacted.
Labour would reinstate the pre-funding to build up an asset base of funds to bear more of the load.
One of Labour's themes was likely to be "owning our own future", Mr Cunliffe said.
That meant establishing a capital base for government superannuation and encouraging individuals to save more.
Labour was willing to stretch the current government balance sheet to cover superannuation entitlements, believing the returns on the investments would cover the extra costs of capital, he said.
However, Mr Cunliffe was more coy when asked about Labour's view of KiwiSaver, particularly whether or not the party would favour compulsory saving.
Labour was looking at a "bunch" of options and would make its position clear in the first quarter of this year.
He favoured "enhancing the richness" of the scheme and encouraging more people to join.
Among the options being considered was compulsory saving, but Labour had not decided on its policy, Mr Cunliffe said.
Mr Foster was in no doubt compulsory saving was needed to help lift the level of savings in New Zealand, pointing to Australia as an example we could follow.
In Australia, workplace superannuation had been compulsory since 1992, although it took a different form from New Zealand's KiwiSaver.
A huge gulf existed between the two rates of employer contributions in Australia (9%) and New Zealand (2%), which was set to increased further with Australia's proposed increase to 12% by 2019, he said.
Australia's superannuation model was based very heavily on employer contributions, while KiwiSaver took a more balanced approach, he said.
It was unrealistic to expect New Zealand employers to immediately pay the 9% contribution, but Mr Foster believed there was room for a gradual increase in the amount of contributions an employer could make to bring New Zealand closer to Australia.
There was a general acceptance within the savings industry a 2% contribution from both employers and employees would not provide a comfortable retirement.
The take-up of KiwiSaver had been much higher than originally expected, with 1.6 million people enrolled, but too many people were not enrolled yet and taking advantage of the scheme, he said.
He recommended making KiwiSaver compulsory and, over time, increasing the rate of contribution by employers. People needed to be saving more.
"Workplace savings is more sustainable. It makes sense as opposed to funding it all through taxation. Starting at an early age is the key. If you start too late, it is not as good."
How we compare:
New Zealand / Australia
• Employer contributions: 2% / 9%
• Individual contributions: 2% / not compulsory
• Membership: not compulsory / compulsory
• Government contributions:$1043 max, plus $1000 kick-start / $A1000 max; only to lower-income earners
• Taxation: individual rates apply (10.5% to 28%) / 15%
• Access to funds: 65 / 65, gradually rising depending on year of birth
• Investment options: KiwiSaver can only be in one scheme / multiple superannuation schemes an option
