KiwiSaver: Key points for State sector employees
Issued by the State Services Commission 20 May 2011, based on legislation current as at 19 May 2011.
Q: I currently work in the State sector and do not have an employer-subsidised savings scheme; can I join a KiwiSaver scheme?
A: Yes. You can choose to join a KiwiSaver scheme (if you meet the eligibility criteria). If you contribute 2% of your gross salary to a KiwiSaver account (or 4% or 8%) you will be entitled to an upfront contribution of $1000 on first joining and an annual member tax credit paid into your KiwiSaver account. The annual member tax credit is paid after 30 June each year, and is calculated based on your contributions in the previous twelve months. The Government proposes to halve the annual member tax credit payable for the year ending 30 June 2012, and beyond, up to the equivalent of $10 per week. From 1 April 2013, the Government proposes to increase the minimum employee contribution rate and the compulsory employer contribution rate to 3% of gross salary. If you want information about KiwiSaver, or to see who is eligible to join, see www.kiwisaver.govt.nz
Q: I currently work in the State sector and am a member of an employer subsidised savings scheme (e.g. Government Superannuation Fund, National Provident Fund, State Sector Retirement Savings Scheme, Teachers Retirement Savings Scheme); can I join a KiwiSaver scheme as well?
A: Yes. You can choose to join a KiwiSaver scheme (if you meet the eligibility criteria), even if you belong to another scheme. If you contribute 2% of your gross salary to a KiwiSaver account (or 4% or 8%) you will be entitled to an upfront contribution of $1000 on first joining and an annual member tax credit paid into your KiwiSaver account. The annual member tax credit is paid after 30 June each year, and is calculated based on your contributions in the previous twelve months. The Government proposes to halve the annual member tax credit payable for the year ending 30 June 2012, and beyond, up to the equivalent of $10 per week.
Q: Can I shift my existing savings account balance into KiwiSaver?
A: The answer to this question will depend on the rules of your existing scheme. Check with your scheme provider.
Q: I am employed in the State sector and am a member of an employer-subsidised savings scheme; can I also get the compulsory employer contribution if I join KiwiSaver?
A: No. In general, employer contributions to existing schemes count towards the compulsory employer contribution for KiwiSaver.
Q: Is the Government is planning to stop employer contributions to KiwiSaver for State sector employees?
A: No. State sector employers, just like all other employers, are expected to pay compulsory employer contributions to KiwiSaver accounts, for all employees who are KiwiSaver members and meet the eligibility criteria. However, from 1 July 2012, State sector employers will manage those KiwiSaver costs directly rather than relying on separate funding from Government.