Frequently Asked Questions
Click on each of the headings below to find answers to questions you might have about KiwiSaver.
For more information on the KiwiSaver schemes offered by Craigs Investment Partners, please read the kiwiSTART® Select and kiwiSTART® Defined Investment Statements.
Who participates in KiwiSaver?
New employees will be automatically enrolled into KiwiSaver with contributions of 2% deducted from their gross pay. The Government has announced a proposal in the 2011 Budget that the minimum employee contribution rate will rise from 2% to 3% with effect from 1 April 2013. This will also be the new default rate. Find out more
Existing employees can opt-in at any stage. Enrolment in the scheme is not compulsory for employees under 18, current employees, the self-employed, casual agricultural workers and beneficiaries (non–workers) and under 18’s. These people can however choose to participate on a voluntary basis.
Those close to the age of 65, who are currently employed and pay PAYE, should be mindful that there is a minimum period of 5 years from initial entry before you can access your funds.
Anyone under the age of eligibility for New Zealand Superannuation (currently 65) and who is a New Zealand citizen (or entitled to live in New Zealand indefinitely) and who is living or normally living in New Zealand (with some exceptions) may open a KiwiSaver account.
Your KiwiSaver savings will be available to you at the age of attaining entitlement to New Zealand Superannuation (currently 65) or after five years membership - whichever is the later. Earlier access may be avaliable in the event of:
- Death
- Serious illness
- Permanent emigration (member tax credits must be repaid)
- Significant financial hardship (excludes member tax credits and Government kick-start)
- First home purchase (excludes member tax credits and Government kick-start)
Your contribution rate will stay the same unless you elect to change it. An employee member can elect to change their contribution rate by contacting their employer.
If an employee changes employment, the employee contribution rate will default to the 2% rate unless the employee notifies his or her new employer that he or she wishes to contribute at the 4% or 8% rate.
The Government has announced a proposal in the 2011 Budget that the minimum employee contribution rate will rise from 2% to 3% with effect from 1 April 2013. This would also be the new default rate. Find out more
You can suspend payments for a period of between three months and five years (a contributions holiday) if more than 12 months have passed since the earlier of:
- the date that IRD received your first contribution; or
- the date that the scheme received your first contribution.
The IRD will write to members nearing the end of their contributions holiday and ask when contributions are to re-commence. Further contributions holiday may be taken consecutively.
Members may also be eligible for a contributions holiday for 3 months or more if suffering, or likely to suffer, financial hardship.
KiwiSaver is designed to supplement New Zealand Superannuation – to give a better standard of living in retirement. New Zealand Superannuation is a universal benefit available to all New Zealanders once they reach the age of eligibility for New Zealand Superannuation (currently 65). KiwiSaver membership does not affect eligibility for New Zealand Superannuation.
Employees are automatically “opted in” to their employer’s preferred KiwiSaver provider unless they identify their own preferred provider.
Employees can choose their own scheme by notifying a KiwiSaver scheme provider directly. If neither the employee nor employer selects a preferred provider the IRD will allocate the employee to a default provider.
Employee contributions must be paid via the IRD’s PAYE system.
Is there any upper limit to an employee’s contributions?
The maximum level of regular contribution via PAYE is 8% of gross pay. In order to make additional contributions, members can pay these to IRD or contribute directly to their KiwiSaver provider.
Craigs Investment Partners strongly recommend that investors seek advice prior to any decision to join a KiwiSaver-compliant scheme or to contribute more than 2% of their gross pay.
The Government has announced a proposal in the 2011 Budget that the minimum employee contribution rate will rise from 2% to 3% with effect from 1 April 2013. This would also be the new default rate. Find out more
The minimum contribution rate for employees is 2% of before tax salary or wages (that means total salary, including bonuses, commission, extra salary and overtime). Alternatively they can choose to save 4% or 8%, (although employers are not required to contribute greate than 2%). KiwiSaver members can make one-off lump sum payments any time, through their KiwiSaver provider or the IRD.
You can use the table below to determine how much you will need to contribute.
| Your contribution per month |
| Annual salary |
2% |
4% |
8% |
| $10,000 |
16.67 |
33.34 |
66.67 |
| $20,000 |
33.33 |
66.67 |
133.33 |
| $30,000 |
50.00 |
100.00 |
200.00 |
| $40,000 |
66.67 |
133.33 |
266.67 |
| $50,000 |
83.33 |
166.67 |
333.33 |
| $60,000 |
100.00 |
200.00 |
400.00 |
| $70,000 |
116.66 |
233.33 |
466.67 |
| $80,000 |
133.33 |
266.67 |
533.33 |
| $90,000 |
150.00 |
300.00 |
600.00 |
| $100,000 |
166.67 |
333.33 |
666.67 |
The self-employed, non workers and individuals under the age of 18 are not required to save 2% - they are able to make payments directly to their KiwiSaver provider subject to the minimum copntribution terms.
The Government has announced a proposal in the 2011 Budget that the minimum employee contribution rate will rise from 2% to 3% with effect from 1 April 2013. This would also be the new default rate. Find out more
All employee KiwiSaver contributions are forwarded to the KiwiSaver scheme provider via the IRD. All KiwiSaver members can view their contributions received by the IRD at www.kiwisaver.govt.nz
If an employee changes jobs, becomes self-employed or leaves paid employment, they will be able to continue making contributions via their new employer or directly to the scheme provider.
KiwiSaver makes provision for these groups to participate and receive many of the incentives announced under KiwiSaver - without the need to pay 2% of gross pay. The KiwiSaver contributions of people who are self-employed, unemployed or beneficiaries are made directly to their chosen provider.
Find out more about the changes to KiwiSaver
No. KiwiSaver is a personal superannuation scheme between each member and their scheme provider. The Government does not guarantee returns. Each individual will need to reguarly review the performance of their scheme at regular intervals. The Government guarantees employee contributions from the date of deduction from pay until receipt by KiwiSaver scheme providers. The Government does not guarantee employer contributions.
KiwiSaver schemes are governed by trust deeds (amongst other things) and are regulated in a similar way to registered superannuation schemes. All KiwiSaver schemes first have to be approved by the Financial Markets Authority.
KiwiSaver scheme providers need to meet minimum ongoing requirements and disclose certain information to assist people in making a choice. Employers are able to select a scheme provider for their employees (deemed a Preferred Provider). Alternatively, the Inland Revenue will select a provider at random from a list of Default Providers.
Joining kiwiSTART® is easy. Simply download and read the Investment Statement for one of our registered KiwiSaver schemes and complete the application form.
kiwiSTART® Select Investment Statement
kiwiSTART® Defined Investment Statement