KiwiSaver Default Funds Explained (NZ, 2026): Why Most People Should Leave

How KiwiSaver default funds work, the six government-appointed providers, and why staying in one could cost you over time.

A default fund is where you land when you join KiwiSaver and never pick a fund yourself. It is a deliberate parking spot, not a recommendation. It is built to be low-cost and reasonable for the average person, which means it is rarely the best fit for any actual person. Around 341,000 New Zealanders were still sitting in one at 31 March 2025, most of them without realising it ².

This guide explains how a KiwiSaver default fund works, who the six default providers are, why the default switched from conservative to balanced in 2021, how to check whether you are still in one, and how to choose deliberately instead.

TL;DR: A KiwiSaver default fund is the low-cost balanced fund you are auto-allocated to if you never choose one. The six default providers are BNZ, Booster, Westpac (BT), Fisher Funds, Simplicity and SuperLife. A default is a placeholder, not advice — most people should make a deliberate fund choice matched to their timeframe. About 341,453 Kiwis are still in a default fund.

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What is a KiwiSaver default fund?

A KiwiSaver default fund is the low-cost balanced fund your contributions are auto-allocated to by one of six government-appointed default providers when you join KiwiSaver but never choose a fund yourself ¹.

When you start a job and get auto-enrolled in KiwiSaver, you have to be put somewhere while you decide. If you never make a choice, your contributions are allocated to that default fund rather than one you picked.

The point of the default is harm-minimisation, not optimisation. The Government sets strict rules: default funds must be low-cost balanced funds, and they must exclude investments in fossil-fuel production and illegal weapons ⁷. The idea is that someone who never engages still ends up somewhere sensible.

"Sensible for the average saver" and "right for you" are two different things. A 22-year-old with 43 years until retirement and a 64-year-old planning to withdraw at 65 can be sitting in the identical default fund — and at most one of them is in the appropriate place.

Who are the six default providers?

Six providers hold the default appointment for the current term, which runs 1 December 2021 to 30 November 2028 ¹. All six default funds are now balanced funds. Below are the total annual fund charges as verified per provider on Sorted's Smart Investor — note the spread is real money over a working life.

The six KiwiSaver default providers and their default funds

Source: FMA default provider list ¹; total annual fund charges verified per provider on Sorted Smart Investor, June 2026 ¹². Fund charges change over time — re-confirm against the live Smart Investor page before relying on a figure.

#### BNZ

BNZ's default fund charges 0.35% p.a. and is a standard balanced offering, sitting in the middle of the pack on fees ¹².

#### Booster

Booster's Default Saver is balanced — roughly half growth assets, half income assets — charging 0.35% p.a. Booster also runs the well-known Socially Responsible Investment range outside the default mandate ¹².

#### Westpac (BT Funds)

Westpac's Default Balanced Fund, managed by BT Funds, is the most expensive of the six at 0.40% p.a. — still well below typical retail balanced funds, but the dearest default ¹².

#### Fisher Funds

Fisher Funds' default fund charges 0.37% p.a. Fisher holds its default appointment via its acquisition of Kiwi Wealth (completed December 2022); Kiwi Wealth was originally appointed in the 2021 round, and the Kiwi Wealth KiwiSaver Plan was subsequently rebranded to the Fisher Funds KiwiSaver Plan. The default fund itself is a low-cost balanced product distinct from Fisher's active retail funds ¹².

#### Simplicity

Simplicity runs the lowest-cost default fund of the six at 0.25% p.a. — a useful anchor for what "low-cost" actually looks like in 2026 ¹².

#### SuperLife

SuperLife (owned by NZX's Smartshares) charges 0.30% p.a. on its default balanced fund, the second-cheapest of the six ¹².

The gap between Simplicity at 0.25% and Westpac at 0.40% looks tiny. Across a $123.1 billion sector with $868.5 million in fees deducted in the year to 31 March 2025 ⁵, small percentages are anything but tiny.

How are you put into a default fund?

There are three common routes into a default fund:

1. Auto-enrolment with no choice. You start a new job, get auto-enrolled, and never pick a provider or fund. Inland Revenue allocates you to one of the six default providers, typically on a round-robin basis.

2. You joined years ago and forgot. Many people enrolled a decade ago, ticked nothing, and have not looked since.

3. You actively chose a default fund. Some people deliberately select a default fund because it is cheap and simple. This is a legitimate choice — and the data shows these members behave very differently from the auto-allocated.

That difference shows up in the balances. At 31 March 2025, members who actively selected a default fund held an average $17,053, while those simply allocated held $11,012 ⁴. There are now 33,970 active default members, up from fewer than 5,900 in 2022 ⁴. Engagement, even a single deliberate decision, correlates with a materially bigger balance.

Why did the default move from conservative to balanced in 2021?

Before 1 December 2021, default funds were conservative — heavy on bonds and cash. That made sense if you assumed default members might pull their money out at short notice. In practice, most are long-term retirement savers who were being parked in a low-growth fund for years or decades, quietly missing out on returns.

So the 2021 redesign switched every default fund to balanced, lowered the fee caps, and added the responsible-investment exclusions ⁷. The Government's own modelling at the time estimated a person joining KiwiSaver at age 18 in a default fund could be roughly $143,000 better off at retirement through lower fees and higher returns, and pay around $3,900 less in fees over their lifetime ⁶.

The numbers since back the design. The FMA reports the six default funds delivered average annual returns of 6.5% and three-year average returns of 5.2% to 31 March 2025, outperforming non-default funds on the FMA's stated measure ³.

Is a balanced default right for you?

This is the question the default cannot answer, because it does not know you. A balanced fund holds roughly half growth assets and half income assets. That is a reasonable midpoint — and a midpoint is, by definition, too cautious for some and too aggressive for others.

A quick rule of thumb, matched to when you will actually spend the money:

A 25-year-old saving for retirement in a balanced default is leaving expected growth on the table. A 30-year-old planning to withdraw for a first home in 18 months sitting in that same balanced fund is taking on risk they cannot afford. A default fund suits the average saver, but most people are better served by a fund matched to their own timeframe.

How to check if you're a default member

In short: log in to myIR to see your provider, then check the fund name in that provider's portal — if it reads "Default Fund" or "Default Saver" and you never chose it, you are a default member. Here is how to confirm it in a few minutes.

Using myIR

1. Log in to myIR at ird.govt.nz.

2. Go to the KiwiSaver section. It shows your current provider.

3. If your provider is one of the six default providers and you do not remember choosing a fund, log in to that provider's portal and check the fund name. If it reads "Default Fund" or "Default Saver", you are in the default.

4. Cross-check the fund type. If it says balanced and you never picked it, you are almost certainly a default member.

Not sure what you are looking at? Run our KiwiSaver health check — it walks you through provider, fund type and fee in plain English, no login required.

How to choose your own fund and provider

Leaving the default is a deliberate, reversible decision. Three questions drive it:

1. When will I spend this money? First home in two years, or retirement in thirty? This sets your fund type before anything else.

2. What am I paying, and what am I getting? Fees compound against you the same way returns compound for you. A 0.25% fund versus a 1.2% active fund is a roughly 1% drag every year, every year. Compare fees and long-run returns side by side on Sorted's Smart Investor, or use our KiwiSaver fund comparison to do it with an independent adviser who compares across all the major providers rather than steering you to an in-house product.

3. Is my PIR correct? Your Prescribed Investor Rate caps the tax on your KiwiSaver returns at 10.5%, 17.5% or 28%. It is set by a two-part test against your income in each of the last two years: you pay 10.5% if your taxable income was $0-$14,000; 17.5% if your taxable income was up to $48,000 and your taxable income plus PIE income was up to $70,000; and 28% if you exceed either of those upper limits ¹¹. An incorrect PIR quietly costs you regardless of which fund you pick.

While you are in there, check you are getting the full government contribution. From 1 July 2025, Budget 2025 halved the contribution rate to 25c per $1, dropping the maximum from $521.43 to $260.72 a year, and you need to contribute $1,042.86 of your own money to receive it in full ⁸⁹. It is also worth knowing your contribution rate is changing: the default employee rate rises from 3% to 3.5% on 1 April 2026 and to 4% on 1 April 2028, with employer contributions matching that schedule, and members can opt back to 3% from February 2026 if they need to ¹⁰. Falling a few hundred dollars short of the $1,042.86 threshold means missing out on up to $260.72 of the government contribution that year.

If you would rather have someone do all three checks with you, that is exactly what a KiwiSaver review covers.

Your default-fund checklist

• 01 Confirm whether you are in a default fund via myIR and your provider's portal.
• 02 Work out your real timeframe — when will you actually withdraw this money?
• 03 Match a fund type (growth / balanced / conservative) to that timeframe, not to inertia.
• 04 Compare fees and long-run returns across providers, not just within your current one.
• 05 Check your PIR is correct — 10.5% ($0-$14,000), 17.5% (taxable income up to $48,000 and combined PIE income up to $70,000), or 28% above ¹¹.
• 06 Make sure you contribute at least $1,042.86 a year to capture the full $260.72 government contribution ⁸⁹.
• 07 Make a deliberate choice — staying put is fine, but only once you have decided it on purpose.

Frequently asked questions

Is a KiwiSaver default fund bad? No — default funds are deliberately low-cost balanced funds that have performed well, averaging 6.5% a year to 31 March 2025 ³. The problem is not the fund itself; it is that a default is a placeholder no one chose for your specific timeframe, so it is rarely the best fit.

How do I know if I'm in a default fund? Log in to myIR to see your provider, then check the fund name in that provider's portal. If your provider is BNZ, Booster, Westpac, Fisher Funds, Simplicity or SuperLife and the fund reads "Default Fund" or "Default Saver" — a balanced fund you do not remember choosing — you are a default member.

Which default KiwiSaver provider has the lowest fees? Of the six default funds, Simplicity is the lowest-cost at 0.25% p.a., followed by SuperLife at 0.30%. Westpac's is the dearest at 0.40% ¹². Lowest fee is not automatically "best" — the right fund type for your timeframe matters more — but fees are a permanent, compounding drag worth minimising.

Should I switch out of my default fund? Most people should at least review it. If you are decades from retirement, a growth fund may suit you better than a balanced default; if you are about to buy a first home, a conservative or cash fund protects you from a badly timed dip. The point is to choose deliberately rather than drift.

Will switching funds cost me money or trigger tax? Switching funds or providers within KiwiSaver does not trigger a tax event and providers do not charge an exit fee for moving. Your money stays locked in the KiwiSaver wrapper. Get your PIR right before and after the switch so your returns are taxed correctly ¹¹.

What is the right PIR for my KiwiSaver? Your PIR is set by your income in each of the last two years. It is 10.5% if your taxable income was $0-$14,000; 17.5% if your taxable income was up to $48,000 and your taxable plus PIE income was up to $70,000; and 28% if you exceed either upper limit ¹¹. Using too low a PIR leaves you with a tax bill; too high quietly overpays — so it is worth checking.

Are all six default funds the same? They are all balanced funds bound by the same low-cost, responsible-investment rules, but they differ on fees, underlying holdings and returns. Charges range from 0.25% to 0.40% p.a. across the six ¹², which compounds into a meaningful difference over a working life.

General information, not personalised financial advice. Seek advice tailored to your situation before acting. Craig Smith Business Services Ltd (FSP712931), trading as Smiths Financial, holds a Class 2 licence issued by the Financial Markets Authority and is a member of the Financial Dispute Resolution Service (FDRS). Written by Henry Smith, Financial Adviser; reviewed by Craig Smith, Principal Adviser. Last reviewed 16 June 2026.