The KiwiSaver option for employees
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KiwiSaver is a voluntary savings scheme launched in July 2007. Its operation is based around employers deducting money from employees’ wages as retirement savings.
From 1 July 2007, employees aged 18-65 years are automatically enrolled in KiwiSaver when they start a new job (existing employees can opt-in if they wish)
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As an employee you can contribute either 2%, 4% or 8% of your gross pay – you decide.
Deductions start from the first pay and are deducted with PAYE and paid to IRD
IRD then passes the money to a private company (called a provider) to invest:
- employees can select their own provider from those who hold registered KiwiSaver schemes
- and / or employers can choose a provider for their employees
- if neither the employee nor the employer selects a provider, the IRD assigns one of the six providers listed on a panel of default providers
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- If you are a new employee, you can opt out of KiwiSaver between weeks two and eight of your new job;
- if you've been an employee of your company since before KiwiSaver was launched, then you can enroll through your HR department
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When you initially join KiwiSaver, you get:
- a government kick-start of $1,000;
- a member tax credit matching the contributions you've made that year, up to a maximum of $1,042, paid by the Goverment, pro rata if you join partway through the membership year (1 July - 30 June)
- Employers must match your contribution up to 2% of your pay if you are contributing to a KiwiSaver scheme
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- Funds (including the Government kick-start of $1,000) can only be accessed at the age of eligibility for New Zealand Superannuation (currently 65) or five years after the first contribution, whichever happens last.
Note: access to funds are permitted in special circumstances – for significant financial hardship, permanent emigration or serious illness
- After a minimum of three years of KiwiSaver membership, savers can withdraw their contributions to buy their first home (excluding the kick-start). The Government will also contribute $1000 for every year of saving, up to $5000. Savers must meet certain criteria to be eligible
- Savers can take a contributions holiday for up to five years after they have contributed to KiwiSaver for 12 months
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For more information about KiwiSaver and how Spicers could help you contact us online, or call 0800 102 100 0800 102 100 .
Spicers is committed to keeping you informed about KiwiSaver. For more information you could also visit the official KiwiSaver website.
