FAQs - KiwiSaver
What is KiwiSaver?
KiwiSaver is a voluntary, work-based savings initiative launched on 1 July 2007 which aims to make regular saving for retirement easier for New Zealanders.
Are new employees joining Westpac automatically enrolled in KiwiSaver?
Westpac is an exempt employer. This means that new employees who join Westpac are not automatically enrolled in a KiwiSaver scheme. Existing and new Westpac employees can elect to join the In-Tandem section of the Westpac New Zealand Staff Superannuation Scheme, the Westpac KiwiSaver scheme or another chosen KiwiSaver scheme.
New employees joining Westpac who are already members of a KiwiSaver scheme can continue to be members of that KiwiSaver scheme but are eligible to choose the Combo option.
What are the 'standard features' of KiwiSaver schemes?
There are a range of incentives available to a member of a KiwiSaver scheme, for example:
- All KiwiSaver members are entitled to a one-off $1,000 kick start from the Government on joining KiwiSaver for the first time.
- The Government matches member contributions to KiwiSaver 50c for every dollar contributed up to a maximum of $521 per year (or $10 a week).
- After three or more years of membership, first home buyers (who meet certain criteria) may be eligible for:
- a first home deposit subsidy; and/or
- a first home withdrawal.
- After 12 months' membership of a KiwiSaver scheme, KiwiSaver members can take a break from saving; this is called a contributions holiday.
- Employers are generally required to contribute 3% of the employee's salary. (This may not apply if the employer is already contributing to another superannuation scheme on the employee's behalf.)
What is a contributions holiday?
A contributions holiday is a period of time during which no contributions to a KiwiSaver scheme are deducted from your salary. Contributions holidays are granted by the Commissioner of Inland Revenue for a minimum period of three months, unless your employer agrees to a shorter contributions holiday. A contributions holiday can be for a period of up to five years. If a contributions holiday is not actively renewed after the maximum period of five years, contributions will automatically resume.
If you have joined KiwiSaver and elect to take a contributions holiday, that contributions holiday will be deemed to have also been taken in respect of your In-Tandem membership. Remember, if you take a contributions holiday, employer contributions will also cease to be made on your behalf.
Who is eligible for the Government first home purchase subsidy?
If you have contributed for three or more years to a KiwiSaver scheme or an exempt employer scheme such as In-Tandem and meet certain eligibility criteria, you may apply for a first home deposit subsidy of $1,000 for each year you have contributed to the scheme (up to a maximum of $5,000). Eligible first home buyers may combine subsidies (so if you buy a first home as a couple, you could receive up to $10,000).
The first home deposit subsidy is administered by Housing New Zealand. It is a one-off subsidy and must be used to purchase a property you plan to live in for at least six months. Regional house price caps and household income caps apply.
In some circumstances, this may also be available to second home buyers who Housing New Zealand consider to be in the same financial position as a first home buyer.
For further details go to the Housing New Zealand website, www.hnzc.co.nz.
Can I make a withdrawal from KiwiSaver if I am buying my first home?
After three or more years' membership of a KiwiSaver scheme, you may be able to withdraw:
- your savings
- employer contributions
- all returns (interest etc).
You cannot withdraw the $1,000 kick-start contribution or your member tax credits.
You can only withdraw money to buy your first home - not an investment property.
If you have owned a home before, in some circumstances you may still be eligible to withdraw your savings. Your scheme provider may require you to contact Housing New Zealand to determine if you're in the same financial position as a first home buyer.
Apply to your KiwiSaver provider for details.
How much do I have to contribute to a KiwiSaver scheme?
The minimum contribution to KiwiSaver is 3%. You can also contribute 4% or 8%.
Are there fees in KiwiSaver schemes?
Yes. The fees vary from scheme to scheme - the investment statement for each scheme will provide full details of fees.
Can I transfer from a non-Westpac KiwiSaver scheme to the Westpac KiwiSaver scheme?
What is the Westpac KiwiSaver scheme?
The Westpac KiwiSaver scheme is established under the KiwiSaver Act 2006. The trustee of the scheme is The New Zealand Guardian Trust Company Limited and the investment and administration manager is BT Funds Management (NZ) Limited.
I want to join a KiwiSaver scheme. What features does the Westpac KiwiSaver scheme offer?
The Westpac KiwiSaver scheme offers customers all of the 'standard' features of KiwiSaver, as well as the choice of five investment options, including the Capital Protection Plan for those customers who want their contributions protected to maturity - see the investment statement for more details.
The scheme offers customers the benefit of experienced fund managers, BT Funds Management (Westpac's funds management business). You can access information and advice through a range of channels, including the toll-free information line, 0508 972 254.
You can track your Westpac KiwiSaver scheme account via Westpac's online banking. You can also take advantage of Westpac's Managing Your Money programme, to help ensure you're making the most of your money and making the best decisions for your financial future.
More information about the Westpac KiwiSaver scheme is available on the Westpac internet site.
Do I have to join the Westpac KiwiSaver scheme?
No, you're not obliged to join any KiwiSaver scheme. If you do choose to join a KiwiSaver scheme, you can choose whichever KiwiSaver scheme provider you want. Westpac contributions are made to any provider you choose.
If I join the Westpac KiwiSaver scheme or another KiwiSaver scheme, what happens if I change my mind?
Once you have joined the Westpac KiwiSaver scheme or another KiwiSaver scheme you are not able to opt out of membership, but you can transfer to another KiwiSaver scheme. Once you have been contributing to the Westpac KiwiSaver scheme or another KiwiSaver scheme for 12 months or more, you can apply for a contributions holiday.
If I just join a KiwiSaver scheme, will I receive the same employer contributions from Westpac as if I was a member of In-Tandem and a KiwiSaver scheme?
No, you will only receive the Westpac employer contribution to KiwiSaver of 3% of your salary. If you also join In-Tandem, you may be eligible for a greater employer contribution.
What happens if I am a member of a KiwiSaver scheme and In-Tandem, but I don't use the Combo Option?
You will only receive a compulsory employer contribution to your KiwiSaver scheme if you are a pre-management employee with less than two years' service and you are not currently eligible for any other employer contribution to In-Tandem. Once you are eligible for the employer contribution of 6%, then this will go to In-Tandem and you will not receive any other contribution to KiwiSaver unless you elect the Combo option. This is because the KiwiSaver Act 2006 allows employers to offset existing employer contributions, or promised employer contributions, against the compulsory employer contribution liability.
Can I transfer a lump sum from In-Tandem to a KiwiSaver scheme?
No. Your accumulated funds in In-Tandem are only available to you when you leave the employment of Westpac, or on the grounds of significant financial hardship. Hardship withdrawals are subject to Trustee consent.
Are Westpac's contributions to KiwiSaver subject to vesting?
No. Westpac's contributions to KiwiSaver are 100% yours straightaway, although they are subject to lock-in requirements.
I am not on a permanent contract with Westpac. Can I join KiwiSaver and get bank contributions?
Yes. If you join KiwiSaver, Westpac will pay the compulsory employer contribution of 3% of your gross salary.
How do I join a KiwiSaver scheme other than the Westpac KiwiSaver scheme?
You need to get a copy of the investment statement for the scheme you have chosen and complete and return the application form. If you are also a member of In-Tandem, you also need to complete an In-Tandem contribution diversion form. Go to the 'How to join' page on the intranet.
Why are KiwiSaver contributions calculated on a different basis to In-Tandem?
KiwiSaver contributions are calculated on your gross salary. This means that both your 3% contribution and the matching contribution paid by Westpac may be higher than if they were calculated for In-Tandem. That is because unlike the KiwiSaver 'salary' definition, the In-Tandem 'salary' definition excludes overtime and some allowances.
I am a pre-management employee. When do I receive employer contributions into In-Tandem?
If you elect to join the Westpac KiwiSaver scheme or another KiwiSaver scheme you are eligible for the compulsory employer contribution of 3% of your salary straightaway.
If you have also joined In-Tandem and choose to use the Combo option, once you qualify for the standard In-Tandem employer contribution of 6% of your salary, 3% of your salary will automatically be paid in to your KiwiSaver scheme, and the remaining 3% will be paid into In-Tandem.
What happens if the KiwiSaver scheme funds make a profit?
The investment gains or losses are reflected in the individual's balance. These will vary between individuals depending on which investment option they have chosen.
Can I 'salary sacrifice' to a KiwiSaver scheme?
When are member tax credits paid?
The tax credit year runs from July 1 –June 30. After every June 30, Inland Revenue will gather information on member contributions from KiwiSaver providers. Within 30 days of receiving that information, Inland Revenue will pay the member tax credit to providers who will put it into members' KiwiSaver accounts.
When does the money deducted from my salary go to my KiwiSaver account?
It's deducted from your pay each fortnight and Westpac then files a monthly return to Inland Revenue. Inland Revenue requires us to pay this amount monthly; paying it fortnightly is not an option. Inland Revenue then transfer this money to your KiwiSaver provider; until it is transferred to your KiwiSaver provider it earns interest at Inland Revenue. Your balance is available from your KiwiSaver scheme provider. If you are a Westpac customer and you have signed up for the Westpac KiwiSaver scheme, you can view your balance online.
When can I get my money out?
When you qualify for NZ Superannuation (which is currently at age 65) or five years after joining a KiwiSaver Scheme, whichever is later. For example, if you first join KiwiSaver when you are 63, you are not eligible to get your money out until you are 68. There are some exceptions to the rule about withdrawals, for example, if you suffer significant financial hardship or serious ill-health.
How do I make the best decision for my retirement savings?
There are a number of factors to consider when making the decision around your retirement savings. You should read the investment statements for In-Tandem and the Westpac KiwiSaver Scheme or any other KiwiSaver scheme, before making any final decision. There are also Q&As and other tools available on the intranet site to help you make the best choice for your personal circumstances. You shouldn't rely solely on this information however - also seek advice from an authorised financial adviser to help you make a decision.
More information is available:
1 April 2013