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KiwiSaver – opting in and opting out

Wang lei signed up to a KiwiSaver scheme online intending to invest by voluntary contributions. Wang lei deposited $1,000 into the account and sent a message to the scheme stating that he had made a payment and that, although he was an employee, he was not eligible for an employer contribution.  He advised that he had opened an account with a voluntary contribution to receive the member tax credit from the Government. By the time Wang lei sent this message, the money had already entered his KiwiSaver account.

Wang lei contacted IRD asking to withdraw his money as he discovered that his employment agreement excluded KiwiSaver contributions, and as a result Wang Lei was responsible for paying his own contributions to his KiwiSaver account and would not receive any employer contributions. IRD advised Wang lei to contact the scheme to explain his situation, however the scheme declined to close his account, stating that it had no right to do so.

Wang lei appealed to the scheme’s trustee outlining his reason for opening the account. He said that he had received an email from IRD explaining that he would be required to start salary contributions, but he did not want to do this. The scheme’s trustee replied that Wang Lei was only allowed to cancel his enrolment on the ground of misrepresentation. In accordance with the law (Contractual Remedies Act 1979), a contract is cancellable if a party to the contract is induced to enter into a contract by a misrepresentation, whether innocent or fraudulent, made by or on behalf of another party to the contract.

Wang lei complained to FSCL stating that he was misled by the scheme’s website in joining KiwiSaver.

The complaint

Wang lei asked whether he had any right to cancel his enrolment due to “the misleading information” and given that he never received any advice from the scheme. Wang lei claimed that he had been misled due to the fact that he misinterpreted information on the scheme’s website, as English is his second language. Wang Lei further claimed that the scheme should have given him advice when he signed p to the KiwiSaver account.


We considered how a “reasonable person” would have interpreted the information on the scheme’s website, and recommended that the complaint against the scheme be discontinued. 

There was no information on the website that could be considered by a reasonable user of the service to be misleading. Wang lei was provided with sufficient information about how the KiwiSaver products operated and how salary deductions were made.

There had been no misleading information or misrepresentation which induced Wang lei to open the account with the scheme. And the scheme was not able, at law, to cancel the KiwiSaver membership and refund the contributions.

We told Wang lei we could not uphold his complaint.


A person can only opt out of KiwiSaver if they have been automatically enrolled by their employer when starting new employment, and they must do this within a set timeframe.

If a person chooses to join KiwiSaver by contacting a scheme provider directly of their own accord, they cannot opt out under normal circumstances.

KiwiSaver allows withdraw of funds in limited circumstances. These include situations where the member:

–        suffers significant hardship;

–        moves overseas; or

–        has an illness.

A KiwiSaver member may also be able to apply for a contributions holiday of between 3 months and 5 years. This allows the member to have a break in making KiwiSaver contributions from their pay.