How to switch KiwiSaver providers in New Zealand

Why you might want to switch KiwiSaver providers

Your KiwiSaver provider isn't necessarily a lifetime commitment. Many New Zealanders find themselves wanting to switch for various reasons: better investment performance, lower fees, different fund options, improved customer service, or simply wanting to consolidate accounts. The good news is that switching is possible and relatively straightforward, though there are some important considerations to understand before you make the move.

Whether you're unhappy with your current provider's returns, frustrated by high fees, or seeking a provider with more growth-focused fund options, understanding the switching process will help you make an informed decision. This guide walks you through the entire process, from deciding whether to switch through to completing the transition.

Reasons to switch KiwiSaver providers

High fees reducing your returns

One of the most common reasons people switch is to reduce the fees eating into their retirement savings. KiwiSaver provider fees vary significantly—some charge annual management fees between 0.5% and 2% of your balance, while others offer much lower rates. Over 40 years of saving, even a difference of 0.5% in annual fees can cost you tens of thousands of dollars. Use the KiwiSaver fee calculator to compare what you're currently paying against other providers.

Poor investment performance

If your chosen fund hasn't performed as well as expected over a 3-5 year period, switching to a provider with stronger historical returns might improve your long-term outcomes. However, remember that past performance doesn't guarantee future results. Check the fund's performance against its benchmark and compare it with similar funds from other providers.

Limited fund options

Some providers offer only a handful of fund choices, while others provide extensive options including specialist international funds, socially responsible investment (SRI) funds, or highly conservative options. If you want more choice in how your money is invested, switching might give you access to funds that better align with your risk profile and values.

Better customer service and user experience

Digital tools, mobile apps, user-friendly dashboards, and responsive customer support vary greatly between providers. If you're frustrated with your provider's website or can't easily access your account information, a switch to a more tech-savvy provider might improve your KiwiSaver experience.

Consolidating multiple accounts

If you've changed jobs several times and have multiple KiwiSaver accounts scattered across different providers, consolidating into one account with a single provider simplifies management and may reduce overall fees.

Step-by-step process for switching KiwiSaver providers

Step 1: Research and compare providers

Before making any changes, research KiwiSaver providers thoroughly. Visit RatePal's KiwiSaver comparison tool to compare fees, fund performance, and features. Look at the annual member statements your current provider sends—these show your fees, returns, and account balance. Compare at least three providers to ensure you're making the best choice. Check for any special offers, fee waivers for new members, or loyalty bonuses from your current provider.

Step 2: Understand the timing within the KiwiSaver year

The KiwiSaver year runs from 1 July to 30 June. Timing your switch matters because of how government contributions work. If you switch early in the KiwiSaver year (say, in July), you'll build up contributions throughout the year and get the full government contribution benefit. If you switch late in the year (May or June), you'll have less time to accumulate contributions before the year ends. However, the IRD will track your contributions across providers during a single KiwiSaver year.

Step 3: Complete the application with your new provider

Once you've decided on a new provider, apply with them. This is straightforward—most providers allow online applications. You'll need to provide your IRD number, personal details, and confirm which fund option you want. You don't need to wait for your old provider to process anything before applying with the new one. The new provider will handle the switch once they receive your application.

Step 4: Complete the switch request with your new provider

The new provider will give you a form or online option to formally request a switch. This notification goes to your old provider, triggering the transfer process. Your old provider is required by law to transfer your balance within 20 working days. During this time, your money remains invested in your old provider's fund—you don't lose out on market movements during the transfer.

Step 5: Monitor the transfer and confirm the switch

Once your balance arrives with the new provider, it will be invested according to your chosen fund option. Your old provider will send a final member statement showing your closing balance. Keep this for your records. Your new provider will send a welcome statement confirming your opening balance. Check that the balance transferred correctly and matches what your old provider showed.

What happens to your balance when you switch

Your entire balance transfers to your new provider. This includes all contributions made by you, your employer, and the government, plus any investment gains (or losses) that have accumulated. If your old provider made any recent contribution to your account, that transfers too. However, if your employer contributes after you've requested a switch, it might go to your old account—this is why communicating the change to your employer is important.

During the transfer period, your balance remains invested. You don't go into cash. This means if markets rise or fall while your balance is in transit, you're still exposed to those movements. This is why timing doesn't matter too much from a market perspective.

Fees and costs to watch

Exit fees from your old provider

Most KiwiSaver providers don't charge exit fees when you switch. However, some may have specific terms in their product disclosure statement. Check your current provider's document or contact them to confirm there are no exit costs. Generally, regulated KiwiSaver providers can't charge excessive exit fees, but it's worth verifying.

Application fees from your new provider

Legitimate KiwiSaver providers don't charge application fees. If a provider is asking for a setup fee, that's a red flag. Stick with providers registered with the Financial Markets Authority (FMA).

Difference in ongoing fee structure

Your new provider may charge different fees than your old one. These are typically charged as a percentage of your balance annually. If your new provider has lower fees, you'll benefit immediately. If you're switching to a provider with higher fees, reconsider whether the other benefits justify the cost.

Market-related costs

During the transfer, you might experience minimal market-timing impact. Your holdings might be temporarily liquidated and reinvested, but this happens quickly and is a normal part of switching. Most investors don't notice any material cost from this process.

Common mistakes to avoid when switching

Not telling your employer about the switch

Your employer continues paying contributions to your old provider until you inform them of the switch. Update your employer with your new provider details as soon as possible. The switching process between providers doesn't automatically notify your employer—you need to do that yourself. This can take 1-2 weeks to process with payroll, so action this early.

Forgetting about multiple old accounts

If you have accounts with multiple providers from previous jobs, make sure you switch all of them or consolidate them into one. Leaving dormant accounts scattered across different providers means you're paying fees on all of them. Consolidate everything into your chosen provider before settling in.

Switching too frequently

While switching is allowed, doing it multiple times per year is inefficient. Each switch involves administrative time and potentially market-timing risk. Switch when there's a solid reason (significantly lower fees, poor performance over years, or consolidation), but not on a whim based on short-term performance fluctuations.

Not understanding the new provider's fund options

Before switching, fully understand the fund options available from your new provider. If you're in a growth fund now, you might assume the equivalent fund at the new provider is the same—but risk profiles and investment strategies can differ. Read the product disclosure statement and fund factsheets so you know what you're moving into.

Failing to check transfer confirmation

Once your balance arrives, carefully check that the amount transferred matches your closing statement from the old provider. If there's a discrepancy, contact the new provider immediately. It's rare, but errors can happen during transfers.

Ignoring the market impact during transfer

If markets crash while your balance is being transferred, some people panic and think they've made a mistake. Remember that your balance is still invested during the transfer—you're not in cash. The market impact is temporary, and over a 40-year savings period, one or two weeks of market movement is immaterial.

What doesn't change when you switch

Your IRD number remains your IRD number. Your employer's contribution rate doesn't change—they still contribute 3% (or whatever rate you agreed). Government contributions continue to accrue after the switch, though they'll now accumulate with your new provider. Your withdrawal eligibility doesn't change—you still can't access your balance until you reach 65 or meet hardship conditions. Your employer doesn't need to do anything except update where they send contributions.

How long does the switch take?

The entire process typically takes 20-30 working days from when your new provider receives your switch request. Your old provider has 20 working days to transfer the balance. During this time, you'll receive communications from both providers. You'll have a brief period where you might see balances in both accounts as the transfer completes, but this is temporary.

Can you switch back?

Yes, you can switch back to a previous provider if you change your mind. The same process applies. However, most people don't switch back, especially if they switched because of fees or performance. Think carefully before switching—while it's allowed, the disruption and administrative overhead make it worth doing only when necessary.