A couple of changes to KiwiSaver came into effect last week, with a couple more changes planned for the future. If you are an employer or an employee who is a KiwiSaver member learn more about these changes below:
Additional Employee contribution options
Employees can now (as of 1st April) contribute 6% or 10% of their wage to KiwiSaver, in addition to the current options of 3%, 4% and 8% KiwiSaver.
The employer contribution rate is unchanged and remains at 3%.
Contribution holiday changes
1st April also saw changes made to the ‘contribution holiday’ – this holiday allowed KiwiSaver members to suspend their contributions for a specific period of time. This has been renamed as a ‘savings suspension’ and will apply to an employee who has been a member of KiwiSaver for at least 12 months. Previously you could suspend your KiwiSaver contributions for up to 5 years, this has now been reduced. The length of the savings suspension can now be up to a year.
It is proposed employees over 65 who are not currently joined in a KiwiSaver scheme will be able to join as of the 1st July 2019. Currently, new members need to be enrolled in KiwiSaver for a minimum of 5 years. From the 1st July any new members between the ages of 60 and 65 will not be locked into the scheme for 5 years. They can choose to withdraw their KiwiSaver funds when they turn 65.
From 1st April 2020 KiwiSaver members will be able to opt-out of this 5 year period when they reach the age of eligibility for NZ Super. Should they choose to opt-out they will be no longer eligible for employer contributions or government contribution.
For more information on the KiwiSaver changes or to update your KS2 forms please visit the IRD website.