Category Archives: KiwiSaver

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Kiwi Saver: New Zealand Superannuation: The New Zealand Superannuation Fund

Can someone please explain the difference between KiwiSaver, The New Zealand Superannuation Fund and New Zealand Superannuation?

KIWI-SAVER was introduced by the Government in 2007 to help New Zealanders save towards their retirement. To help you save, the Government will make an annual contribution towards your Kiwi Saver account (member tax credit) as long as you are a contributing member aged 18 or over. Member tax credit ceases when the member reaches the age of eligibility for NZ Super (currently 65) or has been a member for 5 years, whichever is the later. To get the full member tax credit automatically “you” have to contribute at least $1,042.86 a year

Employees: You can choose to contribute 3%, 4% or 8% of your before-tax pay. If you don’t choose an amount, the default rate of 3% will apply.

Non-employees

If you’re not an employee – for example, you’re self-employed, a contractor, not working or receiving a benefit, then your contribution rate will be set out in the contract you have with your Kiwi Saver provider. There may be a minimum annual sum, or specific payment periods that apply, such as monthly or quarterly.

“Individuals can start a Kiwi Saver account in their own name and take it with them from job to job. “Kiwi Saver is not guaranteed by anyone, including the Government.

“The Government is responsible for setting the rules and regulations for providing a Kiwi Saver scheme. “Providers are supervised by independent trustees and the Financial Markets Authority exercises continuing oversight of the schemes.

Oct 24, 2013 – In the report the Retirement Commissioner acknowledged that while private savings, including Kiwi-Saver, will play an increasingly strong part of people’s retirement income, these should be a supplement rather than a replacement for NZ Superannuation’s modest payments.

NEW ZEALAND SUPERANNUATION (NZ SUPER) is the government pension paid to Kiwis over the age of 65. Any eligible (if you receive an overseas pension, this is important) New Zealander receives NZ Super regardless of how much they earn through paid work, savings and investments, what other assets they own or what taxes they have paid. NZ Superannuation is taxable income

THE NEW ZEALAND SUPERANNUATION FUND (NZSF) was established in 2003 to help pay for the future costs of superannuation entitlements.

Estimated to cover about 10% of future costs and to reduce the tax burden on future New Zealanders for the cost of New Zealand Superannuation

The NZSF invests money on the Government’s behalf and the fund is managed by a crown entity – the Guardians of New Zealand Superannuation

Posted by Alec Waugh 1 February

Kaspanz Chair Makes Sunday Star Times

Don’t panic on pensions

ROB STOCK

Sunday Star Times Oct 13th, 2013 D1, D5

Fears of a massive unaffordable pensions blowout in future may be easing as analysis suggests a sustainable solution is achievable.

Measures proposed by the Retirement Commission are estimated to cut the cost of NZ Super to about 6.5 per cent of GDP by 2060 – a level seen as costly, but affordable.

Retirement Commissioner Diane Maxwell said the measures were designed to be the last big changes needed to make the universal state pension sustainable in the face of an ageing population.

Her comments follow analysis from the University of Auckland’s Retirement Policy and Research Centre showing a consistent decline in Treasury’s estimates of the future cost of NZ Super.

14 treasury models

Click for full-sized image

On Wednesday in the Focusing on the Future report the Commission for Financial Literacy and Retirement Income proposed progressively raising the age of eligibility for NZ Super (currently $21,336.64 before tax for a person living alone) as life-spans increase. Continue reading

Our Chair’s Letter to the Listener August 3-9

Retirement Savings

The Kiwi Saver special “On the Money “ July 27 made informative reading. But the issue of a compulsory income stream in the form of an annuity, over a lump sum on retirement requires addressing. The Australian Superannuation Industry acknowledges this is a real flaw in their system, and New Zealand should learn from their mistake.  The gender factor and how to deal with intermittent breaks from employment also needs attention. Equally the fee issue is understated in the article. Percentage fees structures should be avoided, and there is enormous duplication in administration and back office functions. In the retirement income and age discussion it’s important to recognize that the New Zealand Superannuation model with its simplicity and universality is a world leader, with low administration costs. This principal requires reinforcement and highlighting, there is no evidence to support any viable alternative. In contrast to many countries New Zealand does not pay a tax free pension, the current after tax figure is 3.7% of GDP and over the next 20 years, any projected expenditure rise is very manageable, contrary to the alarmist’s propaganda.

 

Alec Waugh-Takapuna, Auckland

LIstener Article