Photo: RNZ / Hingyi Khong
A new report has raised the question of whether the entitlement to half a former partner's KiwiSaver should be made automatic.
New analysis by MartinJenkins for the Retirement Commission's 2025 Review of Retirement Income Policies looks at how key events and moments in a person's life contribute to poorer retirement outcomes for women.
On average, women have KiwiSaver balances that are 25 percent smaller than men's but the gap is 37 percent for people aged 56 to 65.
The difference is not all due to the pay gap, the report said.
It suggested a number of key areas where change could help.
One related to the way that women were affected in the event of a relationship break-up.
The report said there could be consideration given to more education, awareness-raising and even automating the entitlement to a spouse's KiwiSaver when a couple separated.
KiwiSaver is usually relationship property and the contribution and returns made during the relationship can be divided in a separation.
The report noted that single women were more likely to have inadequate retirement income, and "grey divorce", involving people over 50, was becoming more common.
A United States study showed that among those people, women had a 45 percent decline in their standard of living, compared to 21 percent for men.
"In most OECD countries there is a 50/50 split of pension rights and assets on divorce, unless a property agreement made by the couple or a court order specifies otherwise," the report noted.
"In New Zealand, although KiwiSaver balances and other pension assets are relationship property, they won't necessarily be split 50/50. Because a 50/50 split is not automatic here, pension rights and assets can be overlooked in relationship property settlements if one or both of the ex-spouses doesn't have a lawyer."
Backing for automation
Financial Services Council Empower Women group co-chair Prue Tyler said automation would be a good way to make division of property more equitable.
"If you've just got that automated and it's baked in, that's an immediate leveller or a smallish attempt at levelling."
She said it was not always as straightforward as it could be to find out what a partner's KiwiSaver balance was.
The report said 75 percent of separating couples did not even consider their KiwiSaver accounts.
"Women aren't looking at retirement savings as part of their relationship property," said MartinJenkins partner Sarah Baddeley.
"Whether that's because they're unaware of their rights or they are choosing to just exit often without property and it isn't thought of in the context of the relationship property settlement is unclear. There's definitely an opportunity to support women to understand that KiwiSaver balances, retirement savings balances, are relationship property and they do have a right to ensure they've got a fair share of that."
MartinJenkins partner Sarah Baddeley. Photo: Supplied / MartinJenkins
She said automating the split could be difficult. "But there are a number of processes to support women, particularly women who are vulnerable, who might be in economic abuse situations, to better understand their rights and also ensuring there is good information around an ability to understand what their partner's balance might be would be would be really helpful."
The report said women could also be given more formal education and training to increase their financial capability, and there could be efforts made to improve equity in KiwiSaver entitlements for low-income employees and sole traders.
KiwiSaver contributions could be enabled from different sources so that low-earners could receive incentives from the government, or a spouse could contribute to their partner's account.
It said there would also be merit in revisiting the structure for KiwiSaver default funds. These have changed from conservative to default funds, but the report said there was an argument for making them "life stages" funds, where risk followed a person's age.
The government KiwiSaver contributions for parental leave could be extended including for women who were not contributing, and it could be made easier for employer contributions to be made during parental leave.
The report also said there could be more work done to determine who might be eligible for the accommodation supplement and not receiving it, and raise the asset limit.
Jane Wrightson Photo: RNZ / Jeff McEwan
Baddeley said the research challenged any assumption about women being risk averse or not wanting to contribute, "or being labelled poor savers".
"It really tells a story that it's income circumstances rather than choices that are driving those lower savings balances and I guess that goes to the fact we've got less savings."
Tyler agreed. She said Financial Services Council research showed that it was a myth that women were more risk averse.
"There's a direct correlation, isn't there, between getting braver at what you're investing in - or in terms of the risk profile of what your investments are - with the more money you have."
Retirement Commissioner Jane Wrightson said the report lifted the lid on the setbacks women faced on their path to retirement and where action should be taken.
"It's no surprise that women in Aotearoa reach retirement with less in their KiwiSaver accounts than men - we've seen this pattern for years. What's important now is that we understand why.
"This research gives us clarity: it's not just about earnings, it's about the cumulative impact of life events, caregiving roles, and structural inequalities that shape women's financial journeys. If we want to close the gap, we need to confront these realities head-on."
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