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KiwiSaver changes ‘a priority’ for National Government

Fri, 14 Nov 2008 00:00:00 +1300

The industry association promoting workplace superannuation says a priority for the incoming Government is to repeal the latest amendments to KiwiSaver, and has released a submission detailing its desired law reforms.

To read more, click here.

Read the submission, click here.

KiwiSaver tax-take comment a case of the glass is half empty

Wed, 05 Nov 2008 00:00:00 +1300

The Association promoting workplace superannuation in New Zealand says it is generally comfortable with the framework for taxation of investment savings currently in place.

The Association of Superannuation Funds of New Zealand (ASFONZ) says KiwiSaver investments are taxed on exactly the same basis as any other form of collective investment vehicle.

That follows a warning on KiwiSaver tax from the investment consultancy firm, Mercer. It says KiwiSaver investors will pay more tax on their investment earnings than the incentives given to them by the Government unless the rates are lowered.

And Mercer says under the current model, the incentives to join KiwiSaver would be wiped out over the lifetime of a saver as they would pay more tax on investment earnings.

KPMG Tax partner and ASFONZ councilor Murray Sarelius says KiwiSavers – just like investors in any other form of collective investment vehicle - face tax on their investment earnings.

“However that doesn't undermine the benefit of the incentives provided by the Crown to contribute to KiwiSaver, or mean that KiwiSavers are disadvantaged.

“The incentives are significant and should not be compared with the amount of tax you pay on your KiwiSaver investment over the period you invest,” he says.

ASFONZ chair David Ireland of law firm Kensington Swan agrees: “They are two different things. A tax on KiwiSaver earnings doesn’t wipe out the incentives you receive. You get to keep those. If you are fortunate enough to make a positive investment return then there will be tax to pay on that return – that’s the way our tax system works.

“Lowering the tax rate on retirement savings might be on our wish list, but we have other targets that are more realistic in the short term that are higher on that list.”

Mr Ireland says whatever the outcome of the General Election this weekend, the main incentives to participate in KiwiSaver seem set to remain.

KiwiSaver Performance Survey results

Thu, 16 Oct 2008 00:00:00 +1300

The range of returns from KiwiSaver funds is very wide according to the first performance report from research house Morningstar.

A devil in National's detail

Tue, 14 Oct 2008 00:00:00 +1300

National's proposed KiwiSaver changes have been well and truly analysed by now but one factor which doesn't appear to have been considered yet is the tight timeframe in which National are proposing to introduce the changes.

If elected they want to have the proposed changes in place by April 2009.

National Party “removes KiwiSaver uncertainty”

Thu, 09 Oct 2008 00:00:00 +1300

The Association promoting workplace superannuation in New Zealand says the National Party's plans for KiwiSaver allays fears the scheme would be rendered unattractive under a National Government.

The Association of Superannuation Funds of New Zealand (ASFONZ) says National's policy should continue to improve the overall health of workplace savings.

The National Party has promised that instead of being forced to contribute 4 per cent of an employee's gross salary into KiwiSaver in future years, employers would have to give only 2 percent.

The trade off is the removal of the employer tax credit, currently worth up to $20 per week, to help subsidise employer contributions.

ASFONZ chair David Ireland says the key foundations on which KiwiSaver has been developed would remain unaffected by the policy, and the main incentives to participate remain.

"The proposed changes provide a more sustainable path for both KiwiSavers and employers in the challenging economic climate that we now face.

"Reducing the minimum contribution to 2% is a change we endorse to make the scheme more affordable to all, and removes a disincentive to join that limits its accessibility for some workers.

"It is also important to acknowledge that for many, saving 2% of salary, even if matched by employer contributions, may be insufficient to fund a comfortable retirement.

"In particular ASFONZ welcomes National's plan to scrap the ill-considered amendments to the ERA rushed through Parliament last month that denied the right to factor in employer KiwiSaver contributions to employment negotiations.

"Those changes may have compromised the overall level of retirement savings made through the workplace.

"Regardless of the outcome of the election, ASFONZ is committed to working with whoever holds power to rectify the potential harm inflicted on workplace savings by the latest ERA amendments," says Mr Ireland.

KiwiSaver survey shows higher levels of understanding

Mon, 06 Oct 2008 00:00:00 +1300

Despite global financial market turmoil more New Zealanders understand what KiwiSaver is all about and are using it to save for their retirement, a new survey shows.

Financial Adviser Bill changes ‘provide certainty for employers’

Wed, 24 Sep 2008 00:00:00 +1200

The Association promoting workplace superannuation in New Zealand says it is pleased the Government is providing more certainty for employers through the Financial Advisers Bill, passed under urgency on 24 September.

The new law, designed to toughen protection for investors and crack down on advisers, was only reported back to the House a fortnight earlier.

But the new chair of the Association of Superannuation Funds of New Zealand (ASFONZ), David Ireland of law firm Kensington Swan, says one aspect remained of concern.

"Our primary concern was for employers who make savings arrangements - including KiwiSaver - available to their employees through the workplace, and who discuss the terms of those arrangements with staff members.

The question is whether these people should be considered to be providing ‘financial advice' when doing so.

"We have maintained throughout that this group should be excluded from the definition of a financial adviser - unless they are actually expressing an opinion or recommendation as to suitability of a particular financial product."

Following a meeting between ASFONZ representatives and the Minister, Hon Lianne Dalziel, changes were incorporated into the legislation before it was passed.

Mr Ireland says he is pleased some of the concerns of ASFONZ were taken on board.

"We wanted a pragmatic solution that will not discourage employers from being involved in workplace savings - but at the same time will not undermine the objectives of the legislation by encouraging employers to dabble in providing actual financial advice without the appropriate level of regulatory oversight.

"Some definition problems remain, but the changes introduced at the last minute are largely positive.

"They mean employers will have more certainty as to how far they can go in assisting employees with their workplace savings arrangements without needing to be registered as financial advisers," says Mr Ireland.

More mortgages qualify for KiwiSaver mortgage diversion

Mon, 15 Sep 2008 00:00:00 +1200

Amendments to the mortgage diversion regulations signed by Order in Council today allow more types of mortgages to qualify for the mortgage diversion facility.

Offsetting Employer KiwiSaver Contributions

Fri, 12 Sep 2008 00:00:00 +1200

On 3 September a rushed amendment to the Employment Relations Act was passed that impacts on every employer offsetting their contributions to KiwiSaver within the remuneration package paid to employees. The prospect of total remuneration arrangements being under threat had been signalled as long ago as July - what had not been anticipated had been the lack of consultation that occurred with the wording of the amendments made, and the possible far reaching implications.

In brief, the changes were tacked into the Employment Relations (Breaks and Infant Feeding) Amendment Bill just as it was about to be passed. They result in employees having ground for a personal grievance if their employment is adversely affected because they are a KiwiSaver or complying superannuation fund member. This is generally accepted as meaning that if your employer reduces your take home pay to take into account its compulsory KiwiSaver contribution, resulting in you getting less in the hand than someone who is not a KiwiSaver, you can bring a personal grievance claim. That had been anticipated. The law amendment outlaws total remuneration arrangements to that extent, but was predictable in light of earlier announcements by the Minister of Labour.

The concern now is that with the wide scope of what may be included as an adverse affect, the reform goes beyond that anticipated position. Many employers are now in the position of needing to revisit the terms of employment they are offering, even though they would not previously have considered themselves a target for this reform. And there is no transition period - agreements entered into on or after 2 September 2008 are caught, as are variations to older agreements.

ASFONZ is currently working hard as a matter of urgency with industry experts and relevant officials to gain some greater clarity around the intended impact of this reform upon employer superannuation scheme contributions. In light of earlier political comments made, we understand that the amendment was not intended to cut across workplace superannuation arrangements. Unfortunately, the wording of the legislation leaves the position open to argument, and experts are divided. We are hoping to get some official clarity within the next few days, and will issue a newsflash at that time. For now, we urge our employer members to take a cautious approach with respect to setting new employment arrangements and varying existing arrangments where any form of adjustment to take into account KiwiSaver contributions is involved.

2008 Conference Presentation Now Online

Thu, 11 Sep 2008 00:00:00 +1200

Our two day ASFONZ 2008 National Conference & Super Expo was a huge success!

Thank you to all the delegates who joined us. Most Conference presentations are now available on the web site.

To review the presentations click here.

OCR reduced to 7.5%

Thu, 11 Sep 2008 00:00:00 +1200

The Reserve Bank today reduced the official cash rate (OCR) by 50 basis points from 8.0% to 7.5%.

Credit crisis: not all bad news

Wed, 03 Sep 2008 00:00:00 +1200

Regulators will seek to impose a 'speed limit' on the financial economy as they pay the price of cleaning up after the credit crisis, Medley Global Advisors analyst Paul Silk says.

Address at the Institute of Financial Advisors Annual Conference Success Forum 2008

Fri, 25 Jul 2008 00:00:00 +1200

Speech by Commerce Minister Lianne Dalziel to Institute of Financial Adviser, Christchurch 10.00am, 25 July 2008

July 2008 SuperNews

Thu, 24 Jul 2008 00:00:00 +1200

Read the latest edition of SuperNews

Consensus grows on financial advisers bill

Thu, 24 Jul 2008 00:00:00 +1200

MPs and the finance sector appear to be reaching a consensus on regulation of financial advisers. Parliament's finance select committee heard submissions on the finance advisers' bill yesterday.

Seniors protest against rules on foreign pensions

Thu, 24 Jul 2008 00:00:00 +1200

Septuagenarian protesters greeted Social Development Minister Ruth Dyson at an Auckland Grey Power meeting yesterday with placards demanding their rights to foreign pensions.

KiwiSaver law change to remove conflict

Wed, 23 Jul 2008 00:00:00 +1200

Labour Minister Trevor Mallard says KiwiSaver legislation will be altered to ensure there is no conflict with employment law when workers and bosses thrash out remuneration packages.

The minister last week moved to make it unlawful for employers to pay different amounts to KiwiSaver members and non-members amid concerns a minority were deducting employees' wages but pocketing tax credits.

Australia, NZ agree to progress work on mutual recognition of imputation and franking credits

Thu, 17 Jul 2008 00:00:00 +1200

The Australian and New Zealand governments are open to the idea of moving toward mutual recognition of imputation and franking credits between firms that invest in each other's country, Australian Treasurer Wayne Swan and New Zealand Finance Minister Michael Cullen said today.

Agreement expected on trans-Tasman retirement savings portability by end of October

Thu, 17 Jul 2008 00:00:00 +1200

Officials from Australia and New Zealand will finalise the text of a deal by the end of October that will facilitate the portability of private retirement savings across the Tasman, Australian Treasurer Wayne Swan and New Zealand Finance Minister Michael Cullen said at the conclusion of their first formal bilateral talks, which were held at Parliament in Wellington today.

"At our meeting today we surveyed the good progress that senior officials from the two countries have made on the design of some practical options for improving the portability of savings between Australian and New Zealand retirement savings schemes".

"We are now confident that KiwiSaver and complying Australian superannuation accounts are mutually compatible and that outstanding policy issues can be addressed in time for a Memorandum of Understanding to be ready for signing by the end of October," the Ministers said.

The basic framework has been agreed, but officials, in conjuction with local financial services industries, still need to design the domestic arrangements in either country.

Progress on the issue would mark another important step forward in efforts to facilitate the free-flow of people between Australia and New Zealand.

"Both governments are committed to all measures that make the Australasian economy a more competitive place in which to work, invest and to do business, and we are delighted that we have been able to make such quick progress in this area," the Ministers said.

Further background information for reporters that seek some more context

The New Zealand and Australian labour, financial, and goods and services markets are highly integrated by international standards and the Single Economic Market (SEM) policy agenda builds on the open trading environment created by the Closer Economic Relations (CER) and related agreements.

The SEM agenda aims to improve the operation of trans-Tasman markets by addressing behind-the-border impediments to trade and the free movement of people.

The introduction of the New Zealand KiwiSaver scheme in July 2007 presented an opportunity for both countries to explore the potential for further retirement savings integration. Improved savings portability is expected to reduce impediments to trans-Tasman labour market mobility.

Currently, personal retirement savings accumulated in Australia cannot be taken to New Zealand before retirement is reached. This restriction was historically attributable to both an automatic ability of New Zealanders to retire in Australia and the absence of a retirement savings scheme in New Zealand with equivalent preservation requirements.

The inability of individuals to streamline and consolidate their personal retirement savings has potentially inhibited the free flow of workers between the two countries and some individuals may have historically ended up paying multiple fees for the administration of their savings accounts.

The Working Group, which was established to examine this issue following the meeting between the New Zealand Minister of Finance and the former Australian Treasurer on 29 January 2007, recently reported its recommendations to Ministers.

Scheme Design

Ministers agreed that all retirement savings transferred between the two countries, via the new portability regime, would be ring-fenced within domestic pension funds and tagged as being sourced from their country of origin. Ring-fencing administratively separates funds in order to allow country specific rules to be applied. For example, savings originating from Australia and transferred to a New Zealand KiwiSaver account will be tagged as being "Australian‑sourced".

Country specific requirements will be designed to address policy differentials between the two countries. Differences in preservation requirements were given special attention. For example, Australian funds will not be able to be used to purchase a first home as this KiwiSaver provision is not allowed under current Australian legislation.

The specific details design of domestic arrangements still needs to be finalised. Officials will engage with local industry in the next couple of months to ensure that compliance costs are kept to a minimum.

Britain studies KiwiSaver scheme

Mon, 14 Jul 2008 00:00:00 +1200

KiwiSaver has been subjected to a rigorous examination by retirement specialists in Britain to see if lessons can be learned before a new scheme is rolled out to Britons. In a move similar to that taken by the New Zealand Government with KiwiSaver, from 2012 British workers not already in occupational pension schemes will be enrolled into "personal accounts" unless they opt out.

Bosses' KiwiSaver loophole plugged

Mon, 14 Jul 2008 00:00:00 +1200

Employers will no longer be allowed to pay less to KiwiSaver employees than to those not in the scheme, under a move to be announced today by Labour Minister Trevor Mallard. "There is no way that it is fair for one employee to be paid less each week in their take-home pay than an employee doing the same tasks.....

Evaluation of the impacts of KiwiSaver on New Zealand’s superannuation market

Fri, 04 Jul 2008 00:00:00 +1200

The Ministry of Economic Development has commenced a study of the impacts of KiwiSaver on New Zealand's superannuation market and the wider financial sector. As part of this study a number of industry participants will be asked to take part in a workshop or interview. Read more....

Don’t Risk Your Members Dying Poor – Encourage Them to Decumulate!

Mon, 30 Jun 2008 00:00:00 +1200

Ever wondered what you'll be doing during retirement? Or where you'll be? A significant number of New Zealanders see themselves buying a caravan and traveling around the country, enjoying their new found freedom...but what if their planned retirement income is depleted before they hit the road? Read more.

Budget 2008

Thu, 22 May 2008 00:00:00 +1200

The Minister of Finance Hon. Dr. Michael Cullen today delivered his 9^th consecutive budget. The government is introducing a $10.6 billion programme of tax cuts from 1 October 2008, with further changes scheduled to take effects from 1 April 2010 and 1 April 2011.

What impacts will this have for New Zealand employers? What will it mean for the taxation of investment income, especially from a PIE investment? What is intended to happen to better protect investors?

To learn more from today's budget announcements please click here

KiwiSavers 'likely to opt for higher-risk options'

Mon, 12 May 2008 00:00:00 +1200

Conservative funds will be ditched for higher-risk options as KiwiSavers adopt a more hands-on approach to investing in the scheme, say major providers.

Symposium: Retirement Income & Policies

Wed, 16 Apr 2008 00:00:00 +1200

The Auckland University Retirement Policy & Research Centre in association with the Retirement Commission and the Auckland Business School are holding a one-day symposium in Auckland.

Jail threat for KiwiSaver providers who mislead

Thu, 10 Apr 2008 00:00:00 +1200

KiwiSaver providers who mislead investors over their commitment to responsible investment could face fines of up to $300,000 or five years in prison.

BNZ Foresees 10c fall in Kiwi

Mon, 31 Mar 2008 00:00:00 +1300

Global economic problems will cause the New Zealand dollar to plunge against its US counterpart, a leading economist says.

Lifting lid on alluring box of trinkets

Sat, 29 Mar 2008 00:00:00 +1300

Come Tuesday, the "box of trinkets" offered to New Zealanders to entice them into the Government-subsidised KiwiSaver gets heavier.

Guidance Note on Responsible Investment Disclosure

Wed, 26 Mar 2008 00:00:00 +1300

For a copy of the Securities Commission's Guidance Note on Responsible Investment by KiwiSaver Scheme Providers which was published on Thursday, 20 March 2006, click here.

Piggy puts Nats in a stew

Tue, 25 Mar 2008 00:00:00 +1300

It's an offer Kiwis are finding hard to refuse. You put aside four cents in every dollar from your before-tax pay and the Government matches it with a tax break to a maximum of $20 a week.

Nats silent on KiwiSaver Tax

Wed, 19 Mar 2008 00:00:00 +1300

Kiwisaver members will still get a government subsidy under National, but finance spokesman Bill English is refusing to say whether that means keeping up to $20 a week in tax breaks.

Just 13pc 'embrace' KiwiSaver, poll finds

Tue, 18 Mar 2008 00:00:00 +1300

Despite a surge in KiwiSaver enrolments, a large number of people are still sceptical of the scheme.

National pressed on KiwiSaver policy

Thu, 13 Mar 2008 00:00:00 +1300

National is under pressure to say whether it will keep KiwiSaver as combined nest eggs head toward $1 billion after just eight months and young workers embrace the scheme.

Employer critical of KiwiSaver 'red tape headaches'

Tue, 11 Mar 2008 00:00:00 +1300

An employers' group is irate about what it claims are anomalies and complexities in the law governing KiwiSaver, causing red tape headaches for bosses.

SuperNews - February 2008

Thu, 28 Feb 2008 00:00:00 +1300

Regulations passed under the Securities Markets Amendment Act 2006 will repeal the Investment Advisers (Disclosure) Act 1996 with effect from 29 February 2008, replacing it with new disclosure rules for investment advisers.

Putting spotlight on financial advisers

Wed, 20 Feb 2008 00:00:00 +1300

The Securities Commission will move fast to ensure strict new disclosure rules - making financial advisers' economic incentives transparent to their clients - are being followed.

Advisers Beware

Wed, 20 Feb 2008 00:00:00 +1300

Financial advisers face a tough year, says ING head of sales and marketing Wayne Becker – and he predicts the government may fast-track some of its planned new regulations in response to public pressure.

Adviser regulation a step closer

Wed, 20 Feb 2008 00:00:00 +1300

Financial Advisors will be held to higher standards of competency, accountability and disclosure under the Financial Advisors Bill sent to the Finance and Expenditure Select Committee yesterday, Commerce Minister Lianne Dalziel says.

Plug for Kiwi fund managers

Mon, 18 Feb 2008 00:00:00 +1300

New Zealand's financial sector would be stronger if more superannuation savings went to fund managers based here rather than offshore, Christchurch's George Bayley says.

A Budget for a sustainable, prosperous New Zealand

Wed, 13 Feb 2008 00:00:00 +1300

Finance Minister Michael Cullen will deliver his ninth Budget on 22 May 2008.

KiwiSaver 'will change plans for retirement'

Wed, 13 Feb 2008 00:00:00 +1300

Less importance will be placed on home ownership at retirement due to KiwiSaver and housing affordability, Mercer investment managers and consultants predict.

KiwiSaver breaks through 40,000 barrier

Thu, 07 Feb 2008 00:00:00 +1300

The number of New Zealanders joining KiwiSaver continues to beat initial expectations, finance minister Michael Cullen said today.

Merchants of KiwiSaver doom are wrong

Wed, 30 Jan 2008 00:00:00 +1300

Commentary: Headlines generated by commentators suggesting that KiwiSaver portfolios are taking a beating and that investors would be better keeping their money under the mattress and out of growth assets like shares are financially naive and simply wrong.

Delays dog processing of KiwiSaver funds

Mon, 28 Jan 2008 00:00:00 +1300

Thousands of KiwiSaver contributions made between July and September have not been processed.

Correction not a crash, say analysts

Thu, 17 Jan 2008 00:00:00 +1300

Brokers and investment analysts are still playing down the slide in the sharemarket, but the trend is undeniable as the NZX has opened lower yet again this morning - its incredible 11th straight session of losses in a row.

Bank tips two more interest rate rises

Wed, 16 Jan 2008 00:00:00 +1300

The prospect that inflation will continue to rise has prompted Westpac economists to predict the central bank will lift the official cash rate twice this year to an eye-watering 8.75 per cent.

KiwiSaver fund's big return bucks trend

Tue, 15 Jan 2008 00:00:00 +1300

An Auckland fund manager is claiming to have made one of the best returns on a KiwiSaver fund, contrasting the performance of others who have lost money since the scheme was launched last year.

Social and ethical attitudes crucial

Mon, 14 Jan 2008 00:00:00 +1300

During recent years, investors have increasingly considered environmental, social, and broad governance issues in their investment decisions, over and above a narrow focus on financial return.

The new KiwiSaver Legislation

Thu, 03 Jan 2008 00:00:00 +1300

Special report from the Policy Advice Division of Inland Revenue.

Tax Bill’s KiwiSaver provisions to be fine-tuned

Tue, 11 Dec 2007 00:00:00 +1300

The government has introduced a number of minor changes to fine-tune KiwiSaver legislation in the taxation bill currently before Parliament.

http://www.taxpolicy.ird.govt.nz/publications/files/sop167.pdf

Communication Awards: Air New Zealand KoruSaver cleans up

Thu, 29 Nov 2007 00:00:00 +1300

At the 2007 ASFONZ Communications Awards ceremony held in Wellington last night Air New Zealand cleaned-up, winning three of the five awards including the Supreme Award for Excellence.

We need to get the source text of http://www.asfonz.org.nz/whats_new/Air%20New%20Zealand%20KoruSaver%20cleans%20up.pdf from somewhere else and paste into this article.

KIWISAVER - How do I choose?

Fri, 16 Nov 2007 00:00:00 +1300

KiwiSaver information for employers & individuals. KiwiSaver product and fee information as well as indicative investment performance.

Select committee reports on tax bill

Thu, 15 Nov 2007 00:00:00 +1300

The Finance and Expenditure Committee has reported to Parliament on the Taxation (Annual Rates, Business Taxation, KiwiSaver, and Remedial Matters) Bill.

http://www.taxpolicy.ird.govt.nz/

Kiwis keep it real on hopes for retirement

Wed, 24 Oct 2007 00:00:00 +1300

Research by default KiwiSaver provider Mercer shows that while we would prefer to retire at the age of 57, most of us don't expect to stop working until at least 65.

http://www.nzherald.co.nz/section/3/story.cfm?c_id=3&objectid=10471685