The FMA’s 2026 Annual Report and the newly released KiwiSaver XIX report from Investment News NZ both pointed to a sharp rise in scheme transfers, and the coverage since has focused almost entirely on who is winning and who is losing that competition.
This post focusses on the KiwiSaver XIX report, a post on the FMA’s 2026 Annual Report will follow.
Milford took $2.0 billion in net transfers this year, a record. ANZ lost $974 million and close to 20,000 members from its competitors.
The big five providers (ANZ, ASB, Fisher, Milford, Westpac) collectively lost market share again, their combined slice of total funds under management slipping from 64.4 per cent to 62.8 per cent.
That story is true, and worth understanding.
It is not, however, the whole picture. The part that tends to get left out matters more for how a KiwiSaver provider actually manages money, and it is worth exploring.
The system is still in accumulation
Zoom out from the competitive scoreboard and the more important number is this: total KiwiSaver funds under management reached $138.8 billion as at 31 March 2026, up 12.8 per cent for the year.
That growth was driven by contributions of $13.2 billion, comfortably ahead of withdrawals of $6.8 billion. Net cash inflow, contributions less withdrawals, was $6.4 billion.
The FMA put it plainly in its own Annual Report: KiwiSaver, “remained firmly in the accumulation phase.”
Transfers reshuffle the deck, they don’t shrink it
This is where the ANZ example becomes useful.
ANZ was one of the biggest net losers of members and dollars to competitors this year. But ANZ’s three KiwiSaver schemes still grew total funds under management by $1.1 billion, a 5.3 per cent increase, over the same twelve months. Contributions and investment returns more than covered the transfer losses.
It is not a one-off. ASB held its market share almost flat, shedding only 0.1 percentage points, while still growing funds under management by $2.1 billion, one of the largest nominal increases of any provider this year.
A provider can be a clear loser in the transfer competition and still be managing a growing pool of assets. Both things are true at once, and a headline built only around the first one is incomplete.
As the KiwiSaver XIX report notes, “The big-end of KiwiSaver town can keep shedding members at the current rate for many years yet, however, while still growing assets under management on the back of mandated flows and, in good times, investment returns.”
Why this distinction matters for fund management
A provider planning liquidity has to think in terms of gross flows, not net ones.
Contributions, transfers in, transfers out and benefit payments all move independently, on different timeframes, and often for different reasons.
The fact that the system as a whole is comfortably cash flow positive is a reassuring backdrop, but it says very little about the timing or concentration of outflows any single scheme might face in a given month or quarter.
That distinction sharpens considerably once a scheme holds meaningful exposure to illiquid assets, private equity, private debt, unlisted infrastructure and the like.
A private asset holding does not care whether the system overall is growing. It cares whether the scheme that holds it can meet redemptions and transfers without being forced to sell at the wrong time.
I have written previously about the case for alternatives in a well-diversified portfolio, and about the FMA’s recent work reviewing how private asset valuation and governance is being handled across the industry. See Post links below.
Both asset valuations and governance are worth revisiting with this point in mind, and I will return to the liquidity side of that picture, and what the FMA’s Annual Report says about it, in a follow-up post.
Modelling future flows should be standard practice
The FMA’s liquidity risk management guide requires stress testing against large withdrawals and extreme but plausible market scenarios. What it does not explicitly require is forward modelling of a scheme’s own net fund flows, growth as well as decline, under a range of future scenarios. That is a gap worth closing before the regulator closes it for you.
This matters more as private market allocations increase. A private market allocation is normally set and monitored as a percentage of total FUM. If net contributions slow, plateau, or reverse for a period, while the underlying private commitments remain largely fixed in dollar terms and illiquid, that percentage can drift upward without the manager doing anything at all. The current accumulation phase makes this feel like a remote risk. It should not be assumed to hold indefinitely.
I have managed portfolios with meaningful private market exposure where this kind of modelling was undertaken. The base case for these portfolios was a decline in FUM over time. A framework to actively manage private market exposures down over time was built to keep the portfolio within target limits. It is a straightforward discipline to build in advance. It is considerably harder to build in the middle of a liquidity event.
None of this requires new regulation to justify it. It is consistent with the governance, liquidity management and valuation focus the FMA already has in its 2024 guide and this year’s Annual Report.
Large KiwiSaver managers increasing private market allocations would do well to have this modelling in place well ahead of any FMA expectation that they do so.
A cushion, not a guarantee
None of this is an argument that KiwiSaver providers can be complacent about liquidity.
The accumulation phase gives the industry room to absorb competitive churn today, but it is a point-in-time observation about the system, not a permanent feature of it, and not a substitute for genuine liquidity planning at the individual scheme level.
The lesson from this year’s data is not that transfers don’t matter. It is that the transfer story and the growth story are two different things, and a provider, or an investor, who only follows the first is missing half the picture.
Further reading
For more on how alternatives fit into a well-diversified portfolio, see A Framework for Including Alternatives into a Portfolio.
For the FMA’s recent review of how private asset valuation and governance is being handled across New Zealand managed funds, see FMA report on private assets in New Zealand managed funds.
FMA Liquidity Management Guide: Liquidity risk management guide
Sources: FMA KiwiSaver Annual Report 2026, and KiwiSaver XIX, Investment News NZ
Happy investing.
Disclosure
Please read the Kiwi Investor Blog Disclosure Statement before relying on any information in this post. This blog is written for information and discussion purposes only. Nothing in this post constitutes financial advice. All investment strategies involve risk, including the loss of principal. Readers should seek independent financial advice before making any investment decisions. The views expressed in this post are my own and do not represent the views of my employer or any organisation with which I am affiliated.
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