KiwiSaver is a voluntary work-based savings scheme that aims to help New Zealanders save for their retirement.
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About the KiwiSaver retirement savings scheme
KiwiSaver is a voluntary savings initiative that aims to help New Zealanders save for a first home or their retirement. KiwiSaver is open to all New Zealand residents - and people entitled to be in New Zealand indefinitely - aged up to 65.
Most KiwiSaver members will build up their savings through regular contributions from their salary or wages, which are deducted by the member's employer and passed on to the individual's KiwiSaver scheme by the Inland Revenue.
Those who do not earn a salary or wage subject to PAYE can contribute directly to their chosen KiwiSaver scheme.
KiwiSaver for employees
- employees who are eligible for KiwiSaver and aged between 18 and 65 will be enrolled automatically in a KiwiSaver scheme when they commence employment
- employees have the ability to opt out between week 2 and 8 of commencing employment
- existing employees under the age of 65 can join KiwiSaver at any time.
- the minimum contribution for employees is 3% of gross salary or wages. However, members can contribute more - either 4% or 8% of their gross pay
- employees can change the amount they contribute by notifying their employer
- those who do not earn a salary or wage subject to PAYE can make voluntary contributions directly to their scheme subject to any minimum rate set by their scheme provider
All contributions deducted in the first three months of an employee’s membership with a KiwiSaver scheme are held by the IRD.
These contributions will then be passed on to the member’s scheme, with any interest.
Withdrawing KiwiSaver savings or taking contribution holidays
KiwiSaver savings can be accessed upon eligibility for New Zealand Superannuation (currently 65 years old), or after 5 years of KiwiSaver membership, whichever is later. Being a KiwiSaver member will not affect eligibility for New Zealand Super.
In certain circumstances a member may be able to make earlier withdrawals:
- for the purchase of a first home
- when facing significant financial hardship
- in cases of serious illness
- when they permanently emigrate from New Zealand.
- if required by statute or upon death of member
Members may apply to IRD for a contributions holiday if suffering financial hardship or if 12 months have passed since making their first KiwiSaver contribution.
KiwiSaver members may be eligible for the following Government incentives
- one-off $1,000 kick-start payment when members join their first KiwiSaver scheme
- Member Tax Credit of 50 cents for every dollar the member contributes up to a maximum of $521.43 per year until the member turns 65 or has been a member of a KiwiSaver scheme for 5 years, whichever is later (subject to eligibility criteria)
- compulsory employer contributions - 3% of an employee’s gross pay
- first-home purchase subsidy of up to $5,000
What employers need to do about KiwiSaver
Give an IRD KiwiSaver information pack to
- new employees who are eligible for KiwiSaver
- existing employees who are interested in joining.
If you have chosen a preferred KiwiSaver scheme, supply employees with a
- written statement advising employees that if they don’t select a scheme they will be enrolled in your chosen scheme
- copy of the scheme’s investment statement.
Give KiwiSaver enrolment details to the IRD for
- new employees who are subject to automatic enrolment
- current employees who choose to join a KiwiSaver scheme.
Deduct KiwiSaver contributions
- from employees’ gross salary or wages, and
- forward to the IRD with employees’ PAYE.
Make employer contributions
- make compulsory employer contributions for eligible employees
- consider making additional employer contributions
Help manage KiwiSaver for employees
- stop KiwiSaver deductions for employees who opt out or request a contribution holiday
- maintain KiwiSaver records for your staff.
For more information about KiwiSaver for employers visit www.ird.govt.nz
The information above is subject to changes to government policy and law, and changes to the Westpac KiwiSaver Scheme from time to time.
BT Funds Management (NZ) Limited is the scheme provider and Westpac New Zealand Limited is the distributor, of the Westpac KiwiSaver Scheme.
Investments made in the Westpac KiwiSaver Scheme (Scheme) do not represent bank deposits or other liabilities of Westpac Banking Corporation ABN 33 007 457 141, Westpac New Zealand Limited or other members of the Westpac group of companies. They are subject to investment and other risks, including possible delays in payment of withdrawal amounts in some circumstances, and loss of investment value, including principal invested. None of BT Funds Management (NZ) Limited (as manager), any member of the Westpac group of companies, The New Zealand Guardian Trust Company Limited (as trustee), or any director or nominee of any of those entities, or any other person guarantees the Scheme’s performance, returns or repayment of capital.
For a copy of the investment statement or more information about the Scheme, contact a Westpac branch or call 0508 972 254. You can also download the investment statement.
Disclosure statements under the Financial Advisers Act are available on request and free of charge from a Westpac Financial Adviser.
Reference to non-Westpac websites are provided for your convenience only. Westpac accepts no responsibility for the availability and content of such websites.