Commerce Minister Simon Power says the Government would be remiss if it failed to step in to prevent any problems occurring in the management of KiwiSaver funds.
Mr Power has asked officials to fast-track work on ways to tighten up regulation of KiwiSaver providers, following controversy over the management of funds, and the firm Huljich Wealth Management in particular.
Options include imposing the same reporting and disclosure obligations on all fund managers that already apply to the six default providers.
Another suggestion is whether the regulator should be given greater powers of supervision and enforcement.
Mr Power says there have obviously been problems with Huljich Wealth Management, but he does not think that is endemic.
"Not particularly, but with $4.8 billion worth of money invested in these schemes, it would be remiss if the Government wasn't taking note of advice that it had received, and we'd be remiss if we weren't watching on a daily basis reports of activity in this part of the financial market."
More than a million people use KiwiSaver.
The Minister wants to focus on four specific areas, including whether KiwiSaver providers should provide detailed quarterly reports to an expert monitoring panel.
He also wants to look at whether fund managers should have to regularly report to investors, and the regulator, on the returns, assets and fees of each fund.
Another option is whether the regulator should be given greater power to supervise the trustees of KiwiSaver schemes, and to hold them accountable, and whether further powers of enforcement for the regulator are necessary.
Mr Power expects to hear back from officials within the next month.
Securities Commission concerned
Last month, the Securities Commission expressed concerns about the reporting of Huljich Wealth Management's KiwiSaver fund investment returns, which failed to disclose that Mr Huljich personally topped up the fund to compensate for disappointing investment decisions.
Mr Huljich resigned as managing director last week, following an internal review at the company which revealed the transactions had not been disclosed to the board.
The Government's Capital Markets Development Taskforce has recommended ways to improve the oversight of investment funds.
Taskforce chairman Rob Cameron told Nine to Noon there needs to be much better disclosure about the performance of funds, better rules on financial advice and improved information about products.
A member of the government's Capital Markets Taskforce has urged better policing of the current laws on financial reporting.
Financial columnist and author Mary Holm says it is also important for current laws that protect investors to be enforced.
The Labour Party says it supports the moves to tighten up regulation.
The Minister says the gaps in the regulation regime should have been plugged by the previous government, when it set the scheme up.
Labour's commerce spokesperson, Lianne Dalziel, says at the time, it made sense to impose stricter obligations on the default providers.
But she says recent controversy around Huljich Wealth Management demonstrates that steps do have be taken, so public confidence in the scheme is not undermined.
Ms Dalziel says when a KiwiSaver provider is seen to be acting outside the rules, steps to restore confidence must be taken.