National promises that, if re-elected, it will make KiwiSaver compulsory.

The case for compulsion is weaker than most assume. A low-income, part-time worker, earning less now than they would get on NZ Superannuation, would be made to save in the years they can least afford it. And someone borrowing to build a business might sensibly prefer to invest in that business than in a Kiwisaver share portfolio. Compulsion might even push them to take on more debt simply to make the KiwiSaver payment.

But set that aside. Even if you favour compulsion, there is a problem that ought to be fixed before KiwiSaver becomes compulsory, not after. If a future government thinks that your savings are its pool of capital to direct, your retirement can be put at risk.

The savings in your account are yours. The government’s contribution is generally small relative to your payments. If the government thinks that its $260.72 annual contribution makes the account less-than-yours, you should have the freedom to decline their contribution and its entanglements. And your employer's half of the contribution comes out of your wages over time.

It is your money.

Today your money is somewhat protected by the option to opt-out. If a government decided to interfere with savers’ portfolios, you could decide not to join Kiwisaver or to stop contributing when you next change jobs - and invest elsewhere. Only already-invested savings are at risk.

Compulsion removes the exit option.

A pool of savings that people can neither leave nor stop feeding can be enormously tempting to governments. They can come to see it not as your retirement, but as a cheap, captive supply of capital for their preferred projects. A worker starting out today could see more than fifteen elections before retiring. Across that many governments, views on whether your account is for your retirement, or for their pet projects, may vary.

The case for using KiwiSaver to fund infrastructure is already being made. Infrastructure-finance specialist Brad Tiller has argued KiwiSaver is the "missing link" in funding the country's infrastructure, and the Mood of the Boardroom finds the debate over its role growing. The Opportunities Party says its compulsory "KiwiSaver 2.0" aims to build “a trillion-dollar capital pool to fund infrastructure and national development.”

As an investment choice, infrastructure can be excellent. But consider what has happened in the UK. Under its Pension Schemes Act 2026, if funds do not "voluntarily" put enough into UK "productive" assets, the government may compel default funds to hold up to 10 percent in assets it designates, with 5 percent ringfenced for investment in British firms. That power was capped and time-limited only after the House of Lords fought it on the ground that it cut across funds' duty to their members.

Forced investment can corrupt whatever it touches. Steer retirement money into the firms and projects a government favours, and those businesses can start aiming to maintain that favour. It ultimately hurts both your returns and the businesses favoured by the future government.

But there is a more basic and principled point. The money is yours. Should a Green voter's retirement savings ever be compelled into Roads of National Significance? Should an ACT voter's be conscripted to meet a future Green government's environmental preferences? Can anyone be sure that, over the coming decades, neither will happen? Guardrails now would lower that risk.

Parliament cannot bind future Parliaments. But it can make raiding your savings costly and visible.

Last week I published a short New Zealand Initiative research note, Guardrails for a Compulsory KiwiSaver, with some preliminary options. I am sure they can be improved.

Guardrails should begin with the principle, written into the law, that compulsory KiwiSaver exists for one purpose: your retirement. That duty must bind ministers as well as fund managers.

If a project is worth your money on its merits, funds will invest without being told to. If it needs compulsion, it is not an investment; it is a hidden tax on savers, raised to fund something they would not have chosen.

One protection would be a mandate protection note. That is a Crown promise attached to every account, to pay out if a future government restricts your investment choices without letting you leave.

Another protection is humbler. It requires that any imposed mandate is costed, with the effect on your balance printed on your annual statement. Transparency can provide discipline too.

Governments can always legislate around prior governments’ rules. Forcing a future government to do that would at least provide future voters with a warning about the stakes.

Parties with no intention of diverting your savings to their own projects lose nothing from these protections. They should welcome them. It is your money and your retirement.

But if parties prefer either weak or no guardrails, be wary. They may not have your best retirement intentions at heart.

The case for compulsory KiwiSaver is debatable. But compulsion should come with guardrails.