Frequently Asked Questions
KiwiSaver is a work-based savings initiative designed to help you prepare financially for your retirement. While you and your employer contribute to your savings, the Government also provides a number of benefits that make KiwiSaver a worthwhile investment for virtually every New Zealander.
Choosing to save into a KiwiSaver scheme is an important financial decision. Government and employer KiwiSaver contributions will help you build your retirement wealth. By participating in KiwiSaver, you can take charge of your financial future.
The key is to choose a KiwiSaver scheme that is tailored to your personal situation. We know there are many KiwiSaver schemes to choose from and you can invest in only one. We have developed a KiwiSaver scheme that has a number of attributes to attract discerning investors like you.
The benefits of KiwiSaver build up from day one. The earlier you start, the sooner you can start building your retirement wealth.
Further information on the NZ Funds KiwiSaver Scheme is contained in the current Product Disclosure Statement which may be downloaded here. A copy is also available on request by contacting NZ Funds.
1 April 2019 - CHANGE TO EMPLOYEE CONTRIBUTION RATES & CONTRIBUTION HOLIDAY
From 1 April 2019 employees can contribute 6% or 10% of their salary into KiwiSaver as well as the existing options of 3%, 4% or 8%.
The rules around what is currently called a contribution holiday changed. Under the pre-April 2019 rules, a contribution holiday could be up to five years, but from 1 April 2019 the maximum period will change to 12 months and will now be called a ‘savings suspension’.
Renaming the ‘Member Tax Credit (MTC)’ to ‘Government Contribution’.
Members may be entitled to a Government contribution (formerly called Member Tax Credits) of up to $521.43 pa. In order to qualify for the full amount, you need to be aged 18 or over and less than the Qualifying Age (currently 65), contribute approximately $20 per week (or a total of at least $1,040 per year) and meet certain other requirements.
For employed New Zealanders: In addition to your contributions your employer is generally required to contribute a sum equal to 3% (less tax) of your pay directly into your KiwiSaver account.
For self-employed or not employed New Zealanders: If you are self-employed or not employed, you need to decide how much you want to contribute. If you contribute approximately $20 per week (or a total of at least $1,040 per year) you may qualify for the (annual) Government contribution.
If you are employed, contributions will be deducted from your pay and invested in your KiwiSaver account. You can choose to contribute at a rate of 3%, 4%, 6%, 8% or 10% of your pay.
First Home Assistance
If you qualify, you may be able to withdraw funds from KiwiSaver for the purpose of buying a first home. You may also be eligible for a one-off payment from the Government to help you with your purchase.
If you are an employee, you can choose to pause your KiwiSaver savings by applying for what is called a ‘savings suspension’. Generally you can only take a savings suspension after one year of membership. A savings suspension can last up to a maximum of 12 months, and there is no limit on the number of saving suspensions allowed.
Regardless of whether you are employed, self-employed or not employed, you can join KiwiSaver if you:
- are a New Zealand citizen or you are entitled to be in New Zealand indefinitely
- live, or normally live, in New Zealand (with some exceptions) or
- have not reached the age of eligibility for New Zealand Superannuation (currently 65)
From 1 July 2019, you will no longer need to be under the age of eligibility for New Zealand Superannuation (currently 65) to join KiwiSaver, so long as you meet the other eligibility criteria above.
On average we can expect to have a longer and healthier retirement
Based on Statistics New Zealand’s (SNZ) Cohort Life tables, each new decade’s group of 65 year olds can expect, on average, to live between 1.5 and 2.0 years longer than those born 10 years earlier.
For example, if you are 45 today, presuming you reach 65, you can expect on average to live to 89 years if you are a male and 92 years if you are a female.
This graph shows the trend of the recent past and the near future average life expectancy for males and females, once they reach 65, based on SNZ data and our extrapolation of New Zealand’s life expectancy data.
Source: Statistics New Zealand, NZ Funds’ projection. Life expectancy at age 65.
First Home Purchase
You can apply to withdraw some of your investment to purchase a first home in New Zealand if you meet all of the following criteria:
- you have belonged or contributed to a KiwiSaver scheme or complying superannuation fund for at least three years
- the property you intend to purchase is, or is intended to be, your principal place of residence
- you have never held an ‘estate in land’ and
- you have not made a withdrawal from a KiwiSaver scheme for the purchase of a first home before.
Under the KiwiSaver Rules, members must leave a minimum of $1000 in their KiwiSaver account after the withdrawal and any funds transferred from an Australian complying superannuation fund cannot be withdrawn as part of a first home withdrawal.
If you would like to enquire about applying for a first home withdrawal from the NZ Funds KiwiSaver Scheme, please contact your Authorised Financial Adviser or email Link Market Services, the Administration Manager, at firstname.lastname@example.org or phone 0800 NZF KIWI (0800 693 5494).
Second Chance Withdrawal
In some circumstances, if you have previously owned a house or land you may still be eligible to withdraw your KiwiSaver savings as a second chance withdrawal. To qualify, you have to satisfy the Housing New Zealand criteria. You will need to make an initial application to Housing New Zealand, including details of your income and any assets or liabilities.
KiwiSaver HomeStart Grant
In addition to the first home withdrawal, if you've been a regular contributor to KiwiSaver, you might also be eligible for a grant to help you buy your first home. The grant is administered by Housing New Zealand.
The amount of the grant depends on whether you are are purchasing an existing home or building or purchasing a new home. You could get:
- $1,000 a year for each year you've been a contributing KiwiSaver member, up to a maximum of $5,000, if your first home will be an existing home; or
- $2,000 a year for each year you've been a contributing KiwiSaver member, up to a maximum of $10,000, if you are purchasing a new home, a property bought off the plans or land to build a new home on.
Housing New Zealand can confirm if you are eligible for the KiwiSaver HomeStart Grant (income, house price caps and other criteria apply).
For more information, visit the Housing New Zealand website at www.hnzc.co.nz
What are the KiwiSaver first home withdrawals rules when a trust is involved?
If a member is buying their first home through a trust of which they are a trustee then, provided they personally meet the first home withdrawal criteria (that is, have been in KiwiSaver for three years, have not previously made a first home withdrawal, the home is going to be their principal family home, and they have not previously owned an interest in land), they can make a first home withdrawal and the trust can use the money for the purchase of the home. The member as trustee will need to be named on the Sale and Purchase Agreement.
If a member is the trustee of a trust that owns a property, then that member can make a first home withdrawal (even though they legally own an interest in land as a trustee) for the purchase of their own first home, provided that they have no reasonable expectation of occupying the property owned by the trust until the death of the current occupier or their survivor. Put simply, if you are not the occupier of the property owned by the trust then you are not considered to own it for the purposes of the first home withdrawal rules.
If a member is only a settlor or beneficiary of a trust that owns a property (and not a trustee of that trust), the trust is irrelevant and the normal first home withdrawal criteria apply.
What are the criteria for a withdrawal from KiwiSaver on the grounds of significant financial hardship?
If you can provide evidence that you are suffering significant financial hardship, you may be able to withdraw some of your KiwiSaver savings. Significant financial hardship includes if you are:
- unable to meet minimum living expenses
- unable to meet mortgage repayments on the home you live in, resulting in your mortgage provider enforcing the mortgage on your property
- modifying your home to meet special needs because you or a dependent family member have a disability
paying for medical treatment if you or a dependent family member
- becomes ill
- has an injury or
- requires palliative care
- suffering from a serious illness or
- incurring funeral costs if a dependent family member dies
How much can be withdrawn for significant financial hardship?
You may be able to withdraw the current value of contributions you and your employer(s) have made to KiwiSaver. You cannot withdraw any Government contribution (including the $1,000 kick-start).
KiwiSaver Serious Illness Withdrawals
If you are seriously ill you can apply to withdraw all of your KiwiSaver savings. You can make a serious illness application if you have an illness, injury or disability that:
- means you are totally and permanently unable to work in a job suited to your education, experience or training or
- poses a serious risk of death in the short-term
When do you become eligible for KiwiSaver retirement withdrawals?
You are eligible to access your KiwiSaver funds when you qualify for NZ Superannuation (currently at age 65) and you have been invested in KiwSaver for more than five years. This is referred to as the eligibility age.
From what starting date is the five years in KiwiSaver counted?
The five year qualification date means the earlier of:
- the date that is five years after the day on which you first became a member of a KiwiSaver scheme or
- the date that is five years after the day on which the Commissioner of Inland Revenue received your first contribution for a KiwiSaver scheme
What are your options once you reach eligibility age?
Once you reach the eligibility age you have three options:
- Do nothing. Just because you are eligible to access your KiwiSaver account doesn't mean you have to! For many people, leaving their funds invested in KiwiSaver presents them with a highly diversified, cost effective retirement savings solution.
- Set up a regular withdrawal from your KiwiSaver account to supplement your New Zealand Superannuation or other retirement income sources.
- Access some or all of your funds when you need them.
Do I still qualify for the employer contributions?
No you don't qualify. However, if you keep on working your employer is able to make contributions if they wish to, but it is not compulsory. Talk with your employer about this.
Do I still qualify for Government contributions?
No. Once you reach eligibility age you are no longer eligible for Government contributions.
Please note: In the year the member becomes eligible to withdraw they are entitled to the Government contributions for part of that year only.
How do I initiate a KiwiSaver withdrawal from the NZ Funds KiwiSaver Scheme?
Complete the Application for Withdrawal — Retirement Form. Once completed and signed by all parties (yourself and a Statutory Declaration witness), send along with a copy of your photo ID, to verify age, to:
Freepost NZ Funds KiwiSaver Scheme
Private Bag 92050
Victoria Street West
P. 0800 693 5494
F. (09) 362 9821
What is a statutory declaration and why is it required?
The KiwiSaver Act requires that a statutory declaration is completed by the member prior to withdrawing any Government contributions. A statutory declaration is a written statement declaring something to be true, and is made in the presence of an authorised witness.
This statutory declaration must be signed and dated in front of someone who has the authority to take statutory declarations and they must also sign to confirm that you have signed the declaration in front of them.
The witness for a statutory declaration must be one of the following:
- Member of Parliament
- Justice of the Peace
- Registered Legal Executive (Fellow of NZILE) or
- Government Officer authorised to take statutory declarations
If I want to take out money on a regular basis, what are my options?
Minimum withdrawal amounts:
- Regular withdrawals: $100 per withdrawal (for weekly, fortnightly and monthly withdrawals)
- Ad-hoc withdrawals: $500 minimum lump sum (paid within two days after receipt of correctly completed documentation)
When will these withdrawals be paid?
- Weekly and fortnightly withdrawals will be paid on Tuesdays.
- Monthly withdrawals: will be made on the 15th of each month (or prior working day if the 15th falls on the weekend or public holiday)
- Full withdrawals: once a full withdrawal form has been submitted it may take up to 4 weeks before funds are deposited. Part of the process involved with a full withdrawal includes requesting and receiving the member's final Government contributions from the IRD
Can I frequently change the amount of the regular withdrawals from the NZ Funds KiwiSaver Scheme?
The purpose of a regular withdrawal is to provide a stable ongoing payment to the member.
In order to change the amount of the regular withdrawal the member will have to complete a new withdrawal form and await the next process date.
Another (perhaps better) option would be for the member to request a lump sum (one-off) withdrawal which can be processed within two business days of receipt of a correctly filled in form.
Can I still make contributions to the NZ Funds KiwiSaver Scheme after I am eligible to withdraw?
Yes. You are able to make voluntary or employer deducted contributions after you reach eligibility age.
What are Government contributions?
To help you save, the Government will make an annual contribution towards your KiwiSaver account as long as you are a contributing member aged 18 or over.
The maximum annual Government contribution you are entitled to is $521.43.
To get the full Government contribution automatically, you have to contribute at least $1,042.86 a year. Employer contributions and Government contributions do not count towards eligibility for this credit.
The Government pays 50 cents for every dollar of member contributions annually up to a maximum payment of $521.43. This means that you must contribute $1,042.86 annually to qualify for the maximum payment of $521.43.
If you contribute less than $1,042.86 from your pay, you can make voluntary contributions to ensure you receive the full contribution from the Government.
If you contribute less than the full amount, you will receive a Government contribution that is proportionate to your contribution.
Who is eligible for Government contributions?
The Government contribution will be paid each year (around July/August) to members of a KiwiSaver scheme until you are eligible to withdraw your savings, provided:
- you are 18 or over, and
- live (or normally live) in New Zealand (subject to some exceptions)
Joining KiwiSaver or turning 18 part-way through a year
If you join KiwiSaver part-way through a year (1 July to 30 June), you’ll receive a Government contribution based on the number of days in the year you’ve been a member.
Similarly, if you turn 18 during the year (1 July to 30 June), you’ll receive a Government contribution based on the number of days in the year that you are 18.
What happens to Government contributions when I turn 65?
Once you turn 65, if you have been in KiwiSaver for more than five years your entitlement to Government contributions ceases. If you have not been in KiwiSaver for five years by the time you turn 65, then your entitlement to Government contributions will continue until you have been in for five years. In order to receive these Government contributions in this case you will need to contribute the required minimum of $1,042 into your KiwiSaver account.
When Are Government contributions Paid?
We will claim the Government contribution on your behalf after 1 July each year. You do not have to do anything. Your Government contribution will appear in your KiwiSaver account within a month of us having made the claim.
Breakdown of services
You get access to a diversified range of assets and access to a range of global investment managers.
Your KiwiSaver Strategies have in place a downside mitigation overlay – which means we aim to dampen falls in the value of your KiwiSaver balance when investment markets drop significantly in value.
You have a choice of the LifeCycle Process or MemberChoice Process where you choose your own mix of Strategies.
With the LifeCycle Process your investment is automatically allocated across the three Strategies each year based on your age.
Your KiwiSaver Strategies are managed with a responsible investment approach.
We provide full transparency of the individual investments held by your KiwiSaver Strategies.
You receive monthly market commentary on the KiwiSaver Strategies by email.
You receive regular personalised emails with our OnTrack service which is designed to help you get the most out of your NZ Funds KiwiSaver Scheme.
You can access myNZFunds - your online account management portal – which shows daily balances as well as transaction information and your investment performance.
You can sign up for a quarterly text service which provides your quarter end balance.
Six-monthly Webinars provide an update on the market and the NZ Funds KiwiSaver Scheme.
Our local call centre is available to take your calls if you need help with your KiwiSaver investment.
In addition to the services your fees cover, we help you access Authorised Financial Advisers from a nationwide network of firms that advise on KiwiSaver (advice fees may apply).
Our online Risk360 tool lets you check your risk profile at any time.
We also make available, free of charge, myWealth – our award winning online financial modelling software that helps New Zealanders plan for their retirement.