Investing
Emigration no obstacle to accessing KiwiSaver funds
3rd Mar 11, 5:45pm
by
If I leave New Zealand, can I take my KiwiSaver funds with me? Can they be transferred?
Thanks for your question.
As it stands, if you decide to quit NZ, you are able to take your KiwiSaver funds with you and close out your account. There is however, a minimum mandatory one-year waiting period to do so.
On Government's KiwiSaver website, it states that you may be able to withdraw your contributions, your employer's contribution, the $1,000 kick-start and all the returns your fund has generated. The tax credit portion of your KiwiSaver fund is the only part that is exempt. Those monies are returned to Government.
If you are going this route, you'll need some paperwork to back up your request.
That includes a statutory declaration that says you have permanently emigrated from New Zealand. You'll also need to provide evidence that you have left the country; passport records, boarding passes and the like. You're also required to show proof that you have lived at a overseas address during the year that you left the country.
The transferability question is murkier.
With New Zealand and Australia moving toward a Single Economic Market, there are provisions to allow an ease of movement of superannuation funds. While New Zealand has enacted the necessary legislation, the scheme won't come into effect until Australian laws are changed accordingly. That's expected to happen later this year.
Details of the scheme and questions and answers can be found on Inland Revenue's policy website.
So far, Australia is the only country with whom a smooth retirement savings transference can take place. Yet the same outcome can effectively be achieved regardless of where you move, points out Nigel Tate president of the Institute of Financial Advisers.
Unless you spend your KiwiSaver nest egg upon receiving a cheque (a distinct risk for some I imagine) you should be able to deposit the money in a comparable retirement savings vehicle wherever you end up.
There should not be any penalties or fees for closing out your account if you are emigrating. But just to be safe, it's best to check with your provider and perhaps get something in writing if there is any doubt of that policy changing down the road.
For those who plan to remain invested in New Zealand and KiwiSaver, transferring between funds and amonst providers could get a little stickier, or at least more expensive. While the service was previously free of charge to KiwiSavers, providers are now starting to limit the number of complimentary fund transfers you can take. According to Tate, providers are also looking at imposing a charge to change to another provider.
As KiwiSaver nesteggs have grown in value, transfers have started to happen with greater frequency. While there may be some benefit in doing so, the chopping and changing routine can be costly in the sense that high return-chasing KiwiSavers are buying into a new fund when unit prices are high.
Whether you are staying or leaving, transfering or staying put, it pays to look at the big picture, read the fineprint and look closely before you leap.
Do you have a question about KiwiSaver?
Send us an email and we'll do our best to find you an answer.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.