Changes to KiwiSaver

27/06/2019
 
In March 2019, the Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Act 2019 (‘Tax Act’) became law and will make a number of changes to the KiwiSaver Act.These changes impact only those members who choose to contribute towards the Complying Fund Section of the Scheme.

The Tax Act changes affecting the Scheme include:
  • Reducing the maximum contributions holiday period from five years to one year and changing the name to ‘savings suspension’.
  • Removing the five-year ‘lock in’ period (which requires members joining KiwiSaver after the age of 60 to wait five complete years before accessing their savings).
A full list of the Tax Act changes affecting KiwiSaver is below for your reference.
 
Tax Bill changes to KiwiSaver Date change takes effect
New KiwiSaver contribution rates of 6% and 10% (in addition to the existing rates of 3%, 4% and 8%). 1 April 2019
Reducing the maximum contributions holiday period from five years to one year, and changing the name from ‘contributions holiday’ to ‘savings suspension’. 1 April 2019
Permitting individuals who have reached the New Zealand superannuation qualification age (currently 65) to opt-in to KiwiSaver, and corresponding rules providing that employers of such people are not required to make employer contributions to a KiwiSaver scheme for them.
Such individuals will not be eligible to receive Government contributions or compulsory employer contributions.
1 July 2019
Removing the five-year ‘lock-in’ period (which requires members joining KiwiSaver after the age of 60 to wait five complete years before accessing their savings) for members who join on or after the date this change takes effect (existing members will remained locked in). 1 July 2019
Existing members and individuals who join KiwiSaver before 1 July 2019, who would otherwise be prevented from making a retirement withdrawal by the five-year lock in period, may opt out of the five year lock-in period.
Note that a consequence of opting out means the member will cease to be eligible to receive Government contributions and compulsory employer contributions.
1 April 2020
 
 
If you have any further questions about changes to KiwiSaver, please call 0800 KIWISAVER (0800 549 472) or visit www.kiwisaver.govt.nz.
 

 

This information has been prepared by Mercer (N.Z.) Limited for general information only. The information does not take into account your personal objectives, financial situation or needs. Therefore, you should not act on this information if you have not considered the appropriateness of this information to your personal objectives, financial situation and needs. You should consult an authorised financial adviser before making any investment decision.
 

This New Zealand Fire Service Superannuation Scheme website is provided by Mercer (N.Z.) Limited, on behalf of the Trustee. The Trustee pay a fee for the provision of this service, however this fee is not conditional on you using this service or acting on the information or advice provided through this service.