KiwiSaver FAQs

Here you'll find answers to some of the most common questions we've received at KiwiSelect. If you have a question that isn't answered here, please don't hesitate to contact us - we're here to help! 

It is important to understand that KiwiSelect does not offer Personalised Financial Advice through the site. If you want Personalised Financial Advice from KiwiSelect, then you will need to contact one of our Authorised Financial Advisers to arrange an interview. Click on the "Before we begin" tab to learn more about this. 

Q. What is KiwiSaver?

KiwiSaver is a retirement savings scheme introduced by the government. It's designed to help New Zealanders save for their retirement and it offers incentives (like employer and government contributions to savings - more on these below) that aren't available with other saving methods.

Q. Who is eligible to join?

You can join KiwiSaver if you're:

  • a New Zealand citizen, or entitled to live in New Zealand indefinitely, and
  • living or normally living in New Zealand (subject to some exceptions), and
  • under the age of 65 (and yes, kids are able to join too!).

So, if you're a Kiwi doing your OE in the UK or in Australia, you're unfortunately not able to join KiwiSaver just yet. Make sure you get it sorted when you return to NZ!

Q. Who should join?

The incentives make KiwiSaver a smart choice for most people who need to save for their retirement and can afford to contribute 3% of their pay. If you're employed, chances are your investment will be more than doubled as a result of the employer and government contributions. Self-employed people or non-earners don't get an employer contribution, but the incentives (government contributions) still make KiwiSaver extremely attractive. 

Because KiwiSaver works so well for most people, it's probably simpler to look at who shouldn't join.

Q. Who shouldn't join?

Leaving aside those people who simply can't join (because they are ineligible for some reason) it's fair to say the answer to this question is "almost nobody". Although some people do better than others, the bells and whistles that KiwiSaver offers mean that everyone, in pretty much every situation, is likely to do well out of KiwiSaver. Probably the only eligible people that shouldn't join KiwiSaver are employees who genuinely can't afford to contribute 3% of their wage.

Q. Should I enrol my children?

As of May 2015, the $1,000 kick-start grant has been stopped for someone joining KiwiSaver for the first time. This means that any child being enrolled will not receive an initial contribution unless one is made manually. We still believe that KiwiSaver is a great thing get kids inolved in though, as even a small regular contribution can make a major difference over a long time period. For instance, even a small regular contribution like $10 a week can amount to almost $10,000 by the time they reach 18 years of age. When you consider that all of these can be withdrwawan to put towards buying a first home, even that small contribution can be very, very useful.

Q. I'm an employee, what do I get?

As an employee, you do well out of KiwiSaver because on top of the government contributions you also get contributions from your employer.  Here's a look at where all the money is coming from:

  • A government contribution (the member tax credit) of 50 cents for evey dollar you contribute up to $521.43 a year (for people aged over 18). This means that you have to contrbute $1,042.86 per year yourself to get the full entitlement.
  • Employer contributions of 3%.

This list also applies to self-employed people who pay themselves a wage through the PAYE system.

Q. I'm self-employed (not paying PAYE), what do I get?

Self-employed people don't receive an employer contribution, but you still get:

  • A government contribution (the member tax credit) of 50 cents for every dollar you contribute up to $521.43 a year (for people aged over 18). This means that you have to contribute $1,042.86 per year yourself to get the full entitlement.

One positive thing for self-employed people is that you have the flexibility to choose, in consultation with your provider, how much you'd like to contribute yourself.

Q. I'm a non-earner, what do I get?

It works the same for a non-earner as it does for a self-employed person.  Here's what you get:

  • A government contribution (the member tax credit) of 50 cents for evey dollar you contribute up to $521.43 a year (for people aged over 18). This means that you have to contrbute $1,042.86 per year yourself to get the full entitlement.

Q. I'm a minor (under 18), what do I get?

As of May 2015, the $1,000 kick-start grant has been stopped for someone joining KiwiSaver for the first time. This means that the only contributions for someone under the age of 18 will now come from manual contributions (direct debit or lump sum) or when they start working. It is important to remember that for an employee under the age of 18, the employer is not required to make any matching contributions. 

It's worth noting that if you are under 18, you need your legal guardians consent.

Q. Do I have to make contributions?

You don't have to join KiwiSaver, however if you do join, most people need to make contributions. If you're an employee you can choose to contribute either 3%, 4% or 8% of your income. If you're self-employed, you don't have to make regular contributions - though to get the full benefits you'll probably want to! Finally children and non-earners can also join – and no contributions are required (though please check the info about enrolling children above).

Q. Can I stop making contributions?

You can take a 'Contributions Holiday'. If you're an employee, then you can do this after 12 months of contributing (or within the first 12 months of becoming a KiwiSaver member if you are experiencing, or likely to experience, financial hardship and the Inland Revenue accepts your application for an earlier contribution holiday). Contribution holidays can usually be between 3 months and 5 years long, and at the moment there's no limit to the number of contribution holidays you can take. If you're self-employed or a non-earner, you can take a contribution holiday anytime (though some KiwiSaver providers might have minimum contribution amounts).

Q. Who is looking after my money?

There are dozens of organisations offering KiwiSaver plans to the public. Some of these companies will manage your investment themselves (e.g. they decide where and how it is invested), while others will hire external 'fund managers' to do this.
 
Also, KiwiSaver providers have to appoint an independent trustee. The trustee's role is supervise the provider's scheme – for example checking documents, approving investment decisions etc.

Q. When can I withdraw my money?

Your savings are 'locked in' until you reach the age of eligibility for NZ Superannuation (currently 65) or you've been in the scheme for five years, whichever comes later. However there are a few situations where you can access your savings early – for example if you are suffering financial hardship, move overseas permanently, buying your first home, or become seriously ill.

Q. Where is my money invested?

Your money is managed by your KiwiSaver provider (e.g. ANZ, AMP, etc) or the fund manager they appoint.  Where it is invested depends on which type of fund you choose (e.g. Cash Fund, Balanced Fund, Growth Fund, etc). At one end of the scale, with a Cash Fund, it's pretty similar to having your money in the bank. At the other end of the scale, with a High Growth Fund, your money will be invested in local and international companies (i.e. in the share market).  With the funds in between, your money would usually be invested in a mix of different investment types, like cash, fixed interest, property and shares.

Q. What types of fund are there, and which should I choose?

There are basically four different fund profiles - cash, conservative, balanced and growth.  Some funds are slow and steady with lower growth, while others aim for higher growth but have more ups and downs. Choosing a suitable fund depends on two things:

Remember that this information is of a general nature and must not be considered as personalised advice.

Age - Generally speaking, time is your friend. If you have plenty of time you can aim for higher growth because short-term up & downs wouldn't concern most people. However, as you near retirement, slow and steady is the way to go.

Attitude - You need to be comfortable with your KiwiSaver Investment. Are you prepared for sharp ups and downs, but higher long-term growth? Or do you want slow and steady with lower growth?

KiwiSelect has a simple, interactive tool to help you learn about the different fund types so that you can choose the one that you believe best suits you.

Q. I don't want to choose a fund, what should I do?

That’s fine - some providers offer an option where they automatically assign you a fund based solely on your age. Your fund changes automatically as you get older (for example, a 35 year old might be placed in a growth fund and then moved to a balanced fund when they reach 45). At KiwiSelect we call this option 'Set & Forget'.

Otherwise you can seek personalised financial advice from one of KiwiSelect's Authorised Financial Advisers - Click here to learn more about Personalised Financial Advice).

Q. Can I change to a different provider?

Yes - moving between providers is simple (but you may be charged a transfer fee by your old scheme provider and we recommend you check this with your provider before moving to a new provider).  There is nothing special or difficult that you need to do. Just complete a new application and the new provider (and IRD) will take care of the rest.  There is just one additional question on the KiwiSelect online form: 'Are you an existing KiwiSaver Member'. Tick 'yes' to this and give the name of the old provider. Easy as that.

Q. Can I change my fund selection?

Changing funds is easy and free (unless you change more than a few times a year - in which case some providers will charge a fee).  KiwiSelect can provide you with a short 'fund switch' form.

Q. What are the benefits for first home buyers?

There are two benefits for KiwiSaver members about to buy their first home:

  1. If you've been a KiwiSaver member for at least 3 years, you may be able to withdraw some of your savings to put towards buying your first home. You can withdraw your contributions and your employer contributions, but not the government contributions.
  2. You may also be eligible for a one-off payment from the Government to help you. You can get $1,000 for each year you've been contributing to KiwiSaver, up to a maximum of $5,000 for each member. (Some income and house price caps apply).

Q. How can KiwiSelect help?

KiwiSelect is a website designed to help you explore KiwiSaver investment options, provide general information about fund profiles, and compare a range of providers. It's free to use, there's no pressure, and you can sign up online in just minutes. You can also switch from your existing KiwiSaver provider to one of the providers on the site - just follow the simple steps.

It is important to understand that KiwiSelect does not offer Personalised Financial Advice through the site. If you want Personalised Financial Advice from KiwiSelect, then you will need to contact one of our Authorised Financial Advisers to arrange an interview. Click here to learn more about this. 

Q. Does using KiwiSelect cost?

It's free - there are no hidden charges. The service offered by the KiwiSelect website is entirely free of charge to use.

Q. How does KiwiSelect get paid?

KiwiSelect gets paid by the various providers for distributing their KiwiSaver plan. The current rates are:

Provider Fund Percentage Fee charged Expressed in Dollar terms Upfront payment
AMP All 0.20% per annum of account balance $20 per annum per $10,000 invested Not applicable
 
Fisher Funds Fisher Funds Growth Portfolio 0.25% per annum of account balance $25 per annum per $10,000 invested Not applicable
  Fisher Funds Conservative Portfolio 0.10% per annum of account balance $10 per annum per $10,000 invested Not applicable
 
Booster Booster Capital Guaranteed, Asset Class Conservative, and Asset Class Growth funds 0.25% per annum of account balance $25 per annum per $10,000 invested $30
  Booster Conservative, Balanced, Socially Responsible Investment Balanced, Balanced Growth, Socially Responsible Investment Growth, High Growth, Geared Growth, Enhanced Income, Trans- Tasman Small Companies Share, International Share, and Options funds 0.50% per annum of account balance $50 per annum per $10,000 invested $30
 
ANZ ANZ OneAnswer Cash Plus, NZ fixed Interest, International Fixed Interest funds 0.15% per annum of account balance $15 per annum per $10,000 invested Not applicable
  ANZ OneAnswer Conservative and Conservative Balanced funds 0.20% per annum of account balance $20 per annum per $10,000 invested Not applicable
  ANZ OneAnswer Balanced, Balanced Growth, Growth, Australian Property, International Property, Australian Share and International Share funds 0.25% per annum of account balance $25 per annum per $10,000 invested Not applicable
 
Smartkiwi All 0.20% per annum of account balance $20 per annum per $10,000 invested Not applicable
 
Generate All 0.25% per annum of account balance $25 per annum per $10,000 invested Between $50 and $300, depending on account balance.

Q. Can I contact KiwiSelect with questions?

Definitely – whether it's arranging a contribution holiday, making a fund switch, or sorting out your first home buyers subsidy, we'll have the tools and service to assist.

Just remember that certain questions that you may want answered could involve Personalised Financial Advice. Click here to learn more about this. And if you are not sure, call us - we are here to help! 

 

To start exploring your options please head to the KiwiSelect home page. Or if you have a question not answered above, please contact us - we're here to help!