KiwiSaver Features

KiwiSaver is a voluntary long-term NZ wide work based savings scheme.  It provides all New Zealand citizens who are under the age of eligibility for NZ superannuation (currently age 65) with the opportunity to save for their retirement.  The Inland Revenue (IR) is the administrator and clearing house for all employed KiwiSavers (other than the self employed).  The minimum regular contribution for members is 2% of a wage or salary and this is matched by a compulsory 2% employer contribution if the employee has attained age 18.  The employer contribution is exempt from Employer Superannuation Contribution Tax (ESCT).

The National Party led Government signaled in its May 2011 Budget that if a National Party led Government remains in power after the 2011 election, then from 1 April 2012 the ESCT exemption will be removed and deducted at the individual KiwiSavers applicable progressive ESCT rate, and from 2013 the minimum regular contribution for members will increase to 3% of gross wages or salary and the compulsory matching employer contribution will also increase to 3% (if the employee has attained age 18.)

The self-employed, and people wanting to join before they are 18 years of age or whilst not employed, can open a KiwiSaver account with a scheme provider of their choice.

 

Automatic enrollment  - for employees who are 18 years+

Contributions can be regular and / or lump sums

Locked in savings until 65 years

Crown contributions provide an incentive to save

Choice of KiwiSaver scheme providers

Default funds for those who do not make an investment choice

Early withdrawals - conditions apply

First home deposit subsidy - conditions apply

Compulsory Employer contributions (2%) are currently tax free.  Effective 1 April 2012 the current Employer Superannuation Contributions Tax (ESCT) exemption will be removed, and employers will have to deduct ESCT at the individual KiwiSavers applicable ESCT rate.

Inland Revenue - clears all KiwiSaver employer payments