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KiwiSaver Source and more information http://www.kiwisaver.govt.nz or http://www.getkiwisaver.co.nz/aboutkiwisaver.aspx
What is KiwiSaver? KiwiSaver is a voluntary, work-based savings initiative to help you with your long-term saving for retirement.  It's designed to be hassle-free so it's easy to maintain a regular savings pattern.Work-based Saving For many people, KiwiSaver will be work-based. This means you will receive information about KiwiSaver from your employer, and your KiwiSaver contributions will come straight out of your pay. What you get when you retire NZ Super provides for a basic standard of living in retirement, but it may not be enough for the kind of retirement you want. KiwiSaver is intended to complement NZ Super. Joining KiwiSaver as early as possible could make a big difference to your quality of life later on. Being a KiwiSaver member will not affect your eligibility for NZ Super. Government initiative The government created the framework for the KiwiSaver initiative, to help New Zealanders financially prepare for retirement. There is a range of membership benefits to encourage you to get saving, including a $1,000 tax-free kick-start, a member tax credit of up to $1,042.86 per year and subsidised scheme fees. Some people may also be eligible for help with the deposit on their first home. Benefits and incentives Starting incentive To get your savings off to a good start, the government will kick-start your KiwiSaver account with a tax-free contribution of $1,000. This kick-start will be paid to your scheme provider. This is a unique benefit of KiwiSaver and is not available to people who choose to save for their retirement through other schemes. Member tax credit If you're 18 or over, each year the government will pay into your account a member tax credit matching the contributions you've made that year, up to a maximum of $1,042.86. This is the equivalent of up to $20 a week. This will be paid until you're eligible to access your savings - when you're eligible for NZ Super (currently 65) or after five years' membership, whichever is later. To qualify for the member tax credit, your principal place of residence must be in New Zealand (although there are some exceptions). Fee subsidy The government will pay a subsidy of $20 into your KiwiSaver account twice a year to subsidise the fees charged by your scheme provider. The subsidy will be paid into your account until you qualify for NZ Super (currently 65) or after five years' membership, whichever is later. Buying your first home If you're intending to buy your first home, KiwiSaver can be a way of getting into the habit of regular saving. After contributing to KiwiSaver for three years you may be able to withdraw all or part of your savings (excluding the $1,000 government contribution and member tax credit) to put towards buying your first home (not an investment property). First home deposit subsidy If you've been contributing around 4% of your income to KiwiSaver or to an approved alternative superannuation scheme, you may also be entitled to a first home deposit subsidy from the government through Housing New Zealand Corporation. The subsidy is $1,000 per year of membership in a scheme, up to a maximum of $5,000 for five years for each member. The eligibility criteria are set by Housing New Zealand and include household income and regional house price caps. The first home deposit subsidy is administered by Housing New Zealand and will be available from 2010. To find out more visit the Housing New Zealand website. Use KiwiSaver to help pay your mortgage After you've been a KiwiSaver member for 12 months, you may be able to split your contributions - up to half towards repaying the mortgage on your home and the rest to your KiwiSaver savings. This is called "mortgage diversion". Mortgage diversion may be available for new and existing mortgages, but can only be used towards the mortgage on your main home (not an investment property or holiday home). Once your mortgage is paid off, all contributions would go to your KiwiSaver account. Your member tax credit and any contributions your employer makes cannot be diverted to your mortgage. Contributions you divert to your mortgage do not qualify for the member tax credit. Not all KiwiSaver scheme providers and mortgage providers will offer this, and some types of mortgages will be excluded (for example, revolving credit mortgages) so if this option is important to you, check it out before you join up. Membership KiwiSaver membership is voluntary. To join KiwiSaver you must be:
This means that New Zealand citizens, Australian citizens and people who hold either a New Zealand or Australian residence permit can become KiwiSaver members. State Sector employees serving outside New Zealand can also join. People who hold temporary, visitor or student permits cannot be KiwiSaver members. If you already have a retirement savings scheme You can still join KiwiSaver if you already save through another superannuation scheme. You should discuss your options with your financial advisor. Who's involved? The design of the KiwiSaver initiative was an interagency project involving the Treasury, Inland Revenue, the Ministry of Economic Development and Housing New Zealand Corporation. The ongoing administration of KiwiSaver will be the responsibility of both Government agencies and scheme providers. Employers also play a key role. KiwiSaver scheme providers KiwiSaver scheme providers will have the primary relationship with members. A list of providers with fully-registered KiwiSaver schemes is now available. The official register of KiwiSaver schemes is held by the Government Actuary. Organisations wanting to provide KiwiSaver schemes must meet specific criteria. An organisation must be certified by Inland Revenue before they can register a KiwiSaver scheme with the Government Actuary. KiwiSaver schemes are governed by trust deeds and regulated like other superannuation schemes. Scheme providers must meet certain minimum ongoing requirements and disclose information to help people make an informed choice. Employers For most people, KiwiSaver is a work-based savings plan, so employers play an important role. Employers give new employees and other staff who are interested a KiwiSaver employee information pack (KS3). They also pass their employees' details to Inland Revenue to enable them to be enrolled, and deduct KiwiSaver contributions from employees' gross salary or wages. Employers can be more actively involved by making employer contributions or choosing a KiwiSaver scheme for employees who don't want to select their own. Government Under the KiwiSaver initiative the Government:
The Government has appointed six "default" KiwiSaver scheme providers for members who don't choose their own scheme. The default providers are:
These default providers were selected using an open, competitive tender process managed by the Ministry of Economic Development. There is no Crown guarantee of KiwiSaver schemes or investment products of KiwiSaver schemes. Every investment statement relating to a KiwiSaver scheme must contain a statement to that effect. Inland Revenue The IRD administers members' contributions mainly through the "pay as you earn" (PAYE) tax system. Our main responsibilities under KiwiSaver include:
The Government Actuary The Government Actuary is responsible for registering and regulating KiwiSaver schemes. The Government Actuary is part of the Ministry of Economic Development's Insurance and Superannuation Unit (ISU). The ISU supervises the management of registered superannuation schemes, monitoring and encouraging compliance with the Superannuation Schemes Act 1989 and other legislation. Ministry of Economic Development The Ministry of Economic Development coordinated the tender process for appointing default KiwiSaver providers. The Ministry also administers the regulatory framework for KiwiSaver in a similar manner to other registered superannuation schemes. The Treasury The Treasury consulted with various stakeholders about the development of the KiwiSaver Act. Housing New Zealand Corporation Housing New Zealand provided policy advice on the KiwiSaver first home deposit subsidy. Housing New Zealand is also responsible for setting the subsidy's caps for house price and income, and processing first home deposit subsidy applications. The Retirement Commission The Retirement Commission is associated with KiwiSaver through its financial education programme. The Commission helps New Zealanders prepare for their retirement, by offering free and independent financial information through the Sorted website. Sorted offers easy-to-use online tools to help New Zealanders work out if KiwiSaver is right for them. Source: http://www.kiwisaver.govt.nz We are professional and accredited financial planners with the Institute of Financial Advisers (IFA). It is our duty to understand KiwiSaver and educate you on available options that best suit you. Call Phone/Fax 09 437 1092 to arrange an appointment to discuss your scenario with us in person or for us to arrange a group presentation for your staff. |
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