He said the retirement savings scheme needed to be made compulsory and the NZ Super Fund and ACC should be tasked with providing KiwiSaver funds at cost.

Glass said both organisations had excellent investment teams and were well resourced, with good long-term timeframes. “If anyone could provide low-cost KiwiSaver, it could be one of those guys.”

Glass said while banks, which have the bulk of the KiwiSaver market, were competitive, there were some schemes that were charging too much.

“If the regulator or government said if you’re going to provide a KiwiSaver scheme, you can’t charge more than 100bps all up, I can’t see any reason why they should be charging more than that but quite a few schemes are.”

He said the expensive schemes were often those sold aggressively to “less sophisticated” investors. While default schemes are obliged to ensure their fees are reasonable, there are no constraints on other providers.

“Rather than the hurdles you have to go through putting someone into a managed fund with $2000, if that regulatory firepower could be used ensuring everyone is getting a fair fee structure for KiwiSaver, that would be time well spent.”

Glass said a lot of the New Zealand population would not read disclosure documents or fee schedules, no matter how they were disclosed. “We need to protect those people from themselves and people who employ more aggressive sales practises.”

He said 100bps was fair. “If they can’t run on that, they shouldn’t be in business.”

KiwiSaver should be compulsory and the annual tax credit should be cut, he said. Over time it was likely that the pension would become means-tested, and without compulsion those who saved would have to chip in to cover those who had not.

Compulsion would change the conversation, he said. “There would be less stress about the retirement age and more emphasis on how much is saved.”

A spokesman for the FMA said it was focused on conduct, including fees.

"In our conduct guide we have been clear that all providers, including KiwiSaver providers, should be able to explain to their customers why their fees are reasonable for the services and products they are offering.  We made that clear in the Investor Entitlements we published earlier in the year," he said.

"We also supported MBIE in the work that contributed to the Government introducing the requirement for fees in dollars amounts to be included in KiwiSaver annual statements. We do this, because informed investors can take their own action. If an investor knows the fees they are paying and is comfortable testing their provider on whether those fees are reasonable, they can (and should) walk away if they don’t like what they hear. Our direct ability to influence providers is within the KiwiSaver Act, which states that fees must not be unreasonable. This applies when a new scheme enters the market, or a new fee is proposed. If someone feels that a fee is unreasonable then they can apply to the courts to determine a judgement."