The Opposition is calling for a review of the Government's default KiwiSaver providers after it was revealed some have been investing in companies that make cluster bombs and mines.
But the Prime Minister says the problem isn't big enough to merit change.
The default funds run by ANZ, Westpac, ASB, AMP and Grosvenor have invested in Northrop Grumman, Fluor Corp, Honeywell International and Lockheed Martin.
They did it through Australian fund manager Vanguard, which also put money into tobacco, RNZ reported on Thursday.
The New Zealand Superannuation Fund and ACC cannot invest in the companies because of international conventions on government investment.
Human Rights Commissioner Jackie Blue says she is concerned funds are being invested in companies linked to rights abuses.
"I think all KiwiSaver members would be shocked to learn that their money might be being used to fund land mines, cluster bombs and big tobacco," she said.
The Labour Party agrees, saying the Government should review the rules.
"The fact there are 500,000 people in default funds, many of whose investments will have gone in automatically, puts a greater duty of care on those providers," finance spokesperson Grant Robertson said.
"There is also significant Government funding going into default funds, such as the member tax credit, so this is an issue for the Government."
The Green Party called for the Government to set new ethical standards.
"The Government should be showing strong leadership by clarifying the legality of investing in cluster munitions and landmines, and put a timeframe around when all default KiwiSaver funds will be clean from them," finance spokeswoman Julie Anne Genter said
"This is not simply some nice-to-have optional component to KiwiSaver. Cluster bombs and landmines are blowing the legs off tens of thousands of children in forgotten war zones long after fighting has ceased."
But Prime Minister John Key said a review didn't look likely.
"I don't think there's a big enough issue there to really argue that case," he said.
"In the end, every KiwiSaver and investor, I guess, needs to look at the investments they are making and make a decision about whether that's an ethical investment."
Finance Minister Bill English said it would be a "big step" for a Government to tell the privately-run funds where they could invest.
"It's like any private business. It's up to them to understand what their customers' preferences are."
Nine institutions have been chosen to be default providers for KiwiSaver, investing the retirement contributions for people who haven't nominated a place for their savings.