National Bank KiwiSaver Scheme - Employers

Information for employers

KiwiSaver is a voluntary work based retirement savings initiative.

As well as thinking about your own retirement, as an employer you need to provide your staff with relevant information about KiwiSaver, and deduct KiwiSaver contributions from eligible employees' gross salary or wages.

What is your role?

As an employer the Government requires you to do certain things, such as:

• Distribute a KiwiSaver information pack, supplied by Inland Revenue to all new employees and those who opt in. The pack contains general information about KiwiSaver, as well as where to obtain more information
• Provide Inland Revenue with all employees' details i.e. each employee's name, IRD number and address. This also applies for current employees who have chosen to opt in
• Make deductions of KiwiSaver contributions from the gross salary or wages of eligible employee members via the Inland Revenue PAYE system
• Provide employer contributions for your staff. Employers are generally required to match employee contributions to a KiwiSaver scheme of up to 2% of gross salary or wages. It is proposed the minimum employer contribution rate will rise to 3% of an employee’s gross salary or wages from 1 April 2013
• As an employer you will be able to choose whether or not you select a preferred provider for your employees who don't select a KiwiSaver scheme themselves. If you have selected a preferred KiwiSaver scheme for your employees, you will need to provide an Investment Statement for that scheme to all new employees and those who choose to opt in, prior to them opting in.

• The Basic First Steps
• Selecting a Preferred KiwiSaver scheme
• Employer Contributions
• Administration of KiwiSaver
• Tax

The Basic First Steps

What steps do I need to take to implement KiwiSaver?

Step 1. Provide information packs to all new employees:
The packs will be provided to employers by Inland Revenue and you will also need to give the pack to existing staff who choose to opt-in to KiwiSaver by giving you a KiwiSaver deduction notice or to those employees comtemplating opting in. The information pack must be provided to employees within seven days of starting work, opting in or requesting one*.

If you select the National Bank KiwiSaver Scheme as your preferred scheme, you must also give the employees who opt in to this scheme the National Bank KiwiSaver Scheme Investment Statement, which will be supplied to you as part of an additional pack.

*Some exceptions apply, such as for employees who are already KiwiSaver members or are employed by an exempt employer.

Step 2. Send Inland Revenue your new employee's details:
This includes staff who are subject to automatic enrolment (i.e. they’re new, aged 18 to 65 and haven’t already selected a KiwiSaver scheme) and employees who opt in by giving you a KiwiSaver deduction notice. Temporary employees on contracts of 28 days or less, casual employees engaged on an irregular and intermittent basis and who receive holiday pay and non-New Zealand residents are not subject to automatic enrolment.

Step 3. Deduct KiwiSaver contributions:
Deductions start from the employee’s next pay and are automatically set at the default amount equal to 2% of the employee's gross salary or wages. It’s proposed that the minimum employee contribution rate will rise to 3% of an employee’s gross salary or wages from 1 April 2013. Your employee may choose to contribute at a higher rate of 4% or 8%. Simply forward the contributions to Inland Revenue with your regular PAYE payments**.

** Certain aspects of the National Bank KiwiSaver Scheme and all other KiwiSaver schemes such as minimum contribution levels, the Government's incentives and the circumstances in which benefits can be withdrawn are prescribed in the KiwiSaver legislation. The legislation may be amended from time to time by the Government and any such legislation may impact on such schemes.

Step 4. Manage opt-out requests:
KiwiSaver is not compulsory and an employee who is automatically enrolled in KiwiSaver may choose to opt out within eight weeks of starting their new job. You will need to forward any opt-out requests to Inland Revenue and refund any contributions deducted but not yet forwarded to Inland Revenue to any employee who opts out. Inland Revenue will refund any employee and employer contributions you have already sent to Inland Revenue.

Step 5. Manage contributions holiday requests:
Your staff can apply for a contributions holiday and you will need to manage the change in deductions. (See 'Administration of KiwiSaver' for more information on contributions holidays.)

Do I have to give financial advice to my staff?

No, if you are only passing information on, or choosing a preferred scheme, you’re not liable as a financial adviser or promoter.

The packs you receive from Inland Revenue and The National Bank (as distributor of the National Bank Bank KiwiSaver Scheme if you choose it as your preferred scheme), contain information about how KiwiSaver works and how employees can sign up or receive more information.

Selecting a Preferred KiwiSaver scheme

How do I select the National Bank KiwiSaver Scheme as my preferred scheme?

• Sign the Preferred Provider Agreement confirming your intention to appoint the National Bank KiwiSaver Scheme as the preferred scheme for your business.
• Return the form to:
  National Bank Managed Funds
  Freepost 324
  PO Box 7149
  Wellesley Street
  Auckland 1141
• OnePath (NZ) Limited will advise Inland Revenue of your choice so Inland Revenue will enrol your staff into the National Bank KiwiSaver Scheme unless they select a different KiwiSaver scheme.
• The National Bank will then provide you with National Bank KiwiSaver Scheme Investment Statements and employee packs to give out to your staff.

Do employees have to join my preferred scheme?

No, they can choose another scheme if they want to by reading their chosen KiwiSaver scheme's Investment Statement and completing the application form. An employee’s KiwiSaver scheme can be, in order of priority, their choice, your choice (as employer), or a default provider if neither the employee nor you make a choice.

Employer Contributions

Do I have to offer employer contributions for my staff?

Yes, employers are generally required to match employee contributions to a KiwiSaver scheme up to 2% of gross salary or wages. It is proposed that the minimum employer contribution rate will rise to 3% of an employee’s gross salary or wages from 1 April 2013.

Administration of KiwiSaver

What is the impact on payroll?

Employers must pass on all employee contributions to Inland Revenue as part of the PAYE process via a monthly schedule (no matter what your pay cycle).

What records must I keep?

You will need to record which employees are KiwiSaver members, their contribution rates and any notification of contributions holidays or opt outs. You are also required to keep KiwiSaver records in the same way as you keep PAYE records.

What happens if a new employee already belongs to a KiwiSaver scheme?

They keep their existing scheme. You will need to deduct the relevant contribution amount and pay this to Inland Revenue, who will then pay this amount to the employee’s KiwiSaver scheme.

When will KiwiSaver contributions start being deducted from an employee’s pay?

For employees who are automatically enrolled in KiwiSaver, contributions will be deducted from their first pay after starting their new job. They can choose to opt out within eight weeks, Inland Revenue (not the KiwiSaver scheme) will hold contributions during this time.

How do existing employees opt in?

If they are under the qualification age for New Zealand Superannuation (currently 65), are entitled to permanently reside in New Zealand and live or normally live in New Zealand, existing employees can opt in by giving you a deduction notice or enrolling directly with a KiwiSaver scheme. They also must not already belong to a KiwiSaver scheme. If you have a preferred KiwiSaver scheme, they will be opting into that scheme, unless they sign up directly with the provider of another KiwiSaver scheme.

Can further employee contributions be made into a KiwiSaver scheme other than at the set contribution rates?

Yes. Employees can make additional contributions via Inland Revenue or directly to the National Bank KiwiSaver Scheme either by lump sum or direct debit.

What is a contributions holiday and how does it work?

Members can apply to Inland Revenue for a contributions holiday (i.e. they can stop their KiwiSaver contributions for a set period of time), if either:

• 12 months have passed since their first contribution was received by Inland Revenue or a KiwiSaver scheme; or
• They are suffering, or likely to suffer, financial hardship and at least one contribution from the member has been received by Inland Revenue into their KiwiSaver account.

The contributions holiday will be three months (unless the Inland Revenue agrees to a longer period) in the case of financial hardship otherwise the contributions holiday may be between three months and five years.

At the end of the period, contributions will resume unless a member reapplies to Inland Revenue to renew the contributions holiday.

Tax

What are the KiwiSaver tax advantages?

The Government will contribute 50 cents for each dollar a member aged 18 and over who resides in New Zealand (limited exceptions apply) and who contributes to a KiwiSaver scheme, up to a maximum of $521.43 per year (approximately $10 per week). This is known as a Member Tax Credit ("MTC"). Members must belong to KiwiSaver for a full 12 month period (from 1 July to 30 June) and contribute $1042.86 in that period in order to be eligible to receive the maximum MTC. If you join KiwiSaver part-way through a year (1 July to 30 June), you'll receive a MTC based on the number of days in the year you've been a member. The MTC is paid into the member's KiwiSaver account, for each year they are eligible, until they're eligible to withdraw from KiwiSaver at age 65 or after having been a KiwiSaver member for five years, whichever is later.

Up until 1 April 2012 tax is not applied to the first 2% of employer contributions. From 1 April 2012 tax is applied to all employer contributions.

More Information

Where can members find more information about their National Bank KiwiSaver Scheme investment?

National Bank KiwiSaver Scheme information is available by calling us on 0800 156 020, Monday to Friday, 8.30am to 5.30pm.

The Fund	Management Fee	Trustee Fee*	Current Admin Fee	Entry/ Withdrawal Fee
Cash Fund	0.35% p.a.	0.065%* p.a.	$2.00 per month	Nil
Conservative	0.85% p.a.	0.065%* p.a.		Nil
Conservative Balanced	0.85% p.a.	0.065%* p.a.		Nil
Balanced	0.90% p.a.	0.065%* p.a.		Nil
Balanced Growth	0.95% p.a.	0.065%* p.a.		Nil
Growth	1.00% p.a.	0.065%* p.a.		Nil

*The Trustee Fee: The current Trustee Fee is calculated on the gross asset value of the National Bank KiwiSaver Scheme on each valuation day and paid quarterly in arrears as follows:

• Up to 0.065% p.a. for the first $100 million of the gross asset value of the National Bank KiwiSaver Scheme.

• Up to 0.050% p.a. of the gross asset value of the National Bank KiwiSaver Scheme between $100million and $200 million.

• Up to 0.040% p.a. on the gross asset value of the National Bank KiwiSaver Scheme over $200 million.

Switching Fees: Switches are transfers between funds within the National Bank KiwiSaver Scheme. Subject to certain rules, you can either switch the fund(s) your contributions are invested in and/or switch some or all of your existing investment between funds. You can make up to two switches a year for free. Thereafter, the Manager may apply a switching fee (currently $25) to each subsequent switch transaction. The switching fee will be deducted from the fund your investment is switched from.

Other Expenses: The manager and Trustee may recover expenses such as audit, registry, custodian, legal fees and certain postage fees from the National Bank KiwiSaver Scheme, as well as losses incurred due to refunding amounts that are incorrectly paid by employers. The expenses charged to the Funds are subject to a cap set by the Manager from time to time.

For further information on how and when these fees are charged, and the expenses payable, please see the National Bank KiwiSaver Scheme Investment Statement (PDF 1.20MB). Terms defined and references construed in this webpage have the same meaning and construction set out in the current Investment Statement.

Subject to the KiwiSaver Act 2006, the Manager may alter the fees set out above and introduce new fees from time to time.

OnePath (NZ) Limited and Guardian Trust Superannuation Trustees Limited may recover administration expenses from the National Bank KiwiSaver Scheme.

The management fees, trustee fees, and expenses (such as audit, registry, custodian, legal and certain postage fees) are met by way of deduction from investment income and assets, and are reflected in the unit prices of the relevant funds.

Administration fees are paid in arrears from the fund in which you have the highest balance. Your unit balance will be adjusted accordingly. The fund deducts these fees for tax purposes on your behalf. See the National Bank KiwiSaver Scheme Investment Statement for further information on fees and expenses payable. GST does not currently apply to the management, trustee, switching or administration fees but will be added if applicable. Fees are subject to change.

Fees are deducted from income allocated to you by the National Bank KiwiSaver Scheme and cannot be claimed in your personal tax return.

To select OnePath (NZ) Limited ("OnePath") as your preferred KiwiSaver provider and the National Bank KiwiSaver Scheme as your preferred Scheme, call us on 0800 156 020, Monday to Friday, 8.30am to 5.30pm or visit any National Bank branch.

Joining or switching to the National Bank KiwiSaver Scheme yourself is easy. All you have to do is read the Investment Statement, fill in the application form and OnePath will co-ordinate the rest.

Copies of the National Bank KiwiSaver Scheme Investment Statement (including the application form) are available as PDFs.

You'll need Adobe Acrobat Reader to read the PDF version. If you don't have it, don't worry - it's free. Just follow this link to the Adobe site to download a copy.