What Do I Have To Do?

KiwiSaver is a great savings initiative to help New Zealanders save for their retirement. As an employer, there are a few things you need to do to offer KiwiSaver to your staff. We're here to help you manage KiwiSaver and make it as easy as possible to implement it for your business and staff. Below is an overview of your key obligations.

Determine whether your new employee is subject to automatic enrolment provisions.

Most new employees aged 18 to 64 will be subject to automatic enrolment with a few exceptions.

Provide Inland Revenue with:

The name, address and IRD number for all employees subject to automatic enrolment as well as existing staff who choose to join KiwiSaver.

Provide an information pack to:

• each employee subject to automatic enrolment, within seven days of the employee starting the new employment;
• each employee who opts in through their employer, within seven days of the employee opting in;
• each employee who requests an information pack in contemplation of opting in.

If you have chosen a KiwiSaver scheme you must also provide your employees, at the same time, with:

• an investment statement for that KiwiSaver scheme (supplied to you by the scheme provider)
• a written statement advising your employees that if they don't choose their own KiwiSaver scheme, they will be enrolled in your chosen KiwiSaver scheme.

Deduct contributions and pay to Inland Revenue.

• Start making deductions for KiwiSaver contributions from the first pay at 2% of gross salary or wages, unless an employee elects to contribute 4% or 8%, and forward to Inland Revenue with PAYE payments.
• The Government announced in the 2011 Budget that the minimum employee and compulsory employer contribution rate will increase from 2% to 3% of gross salary or wages with effect from 1 April 2013.
• Employees may choose to alter their contribution rate. You will need to do this through your payroll system.

Act on any opt out requests.

• You'll need to act on any opt out forms you receive from employees and send them to Inland Revenue.
• Employees can only opt out between the end of the second and eighth weeks of starting a new job. This only applies if the employee is defaulted into KiwiSaver for the first time.
• If an employee opts out you'll need to stop their KiwiSaver deductions.
• If you have made deductions but not yet passed them on to Inland Revenue, you can refund them to the employee.

Act on contributions holiday notices.

• Employees in KiwiSaver can apply to Inland Revenue for a contributions holiday 12 months after their first contribution to KiwiSaver.
• Inland Revenue will notify you that a contributions holiday has been granted.
• You must then stop any deductions.
• Inland Revenue will then notify you when the contributions holiday ends. You must recommence deductions from the date of this notice.

Employer contributions

Employers are generally required to contribute 2% of an employee's gross salary or wages where their employee is contributing to KiwiSaver, is aged 18 or over and is not yet eligible to receive their KiwiSaver retirement benefit. Employers can choose to contribute more. The Government announced in the 2011 Budget that the minimum employee and compulsory employer contribution rate will increase from 2% to 3% of gross salary or wages with effect form 1 April 2013.

These employer contributions are free of employer's superannuation contribution tax up to 2% of the employee's gross salary or wages to the extent they are matched by the employee. From 1 April 2012, employer superannuation contribution tax will be deducted at the employee's marginal tax rate before employer contributions are forwarded to the scheme.

An employer may be exempt from making employer contributions towards KiwiSaver, if the employer is already contributing to:

• an existing registered superannuation scheme, or
• a complying superannuation fund.

Any tax free employer contributions to complying superannuation funds also reduce the level of tax-free employer contributions to KiwiSaver.

Disclaimer

The FirstChoice KiwiSaver Scheme is provided by ASB Group Investments Limited.

The information contained in this website is for general informational purposes and is designed for use by New Zealand Residents only. None of the Crown, the Trustee, the Manager, ASB Bank Limited and its subsidiaries (the Banking Group), the Commonwealth Bank of Australia, or any other company in the Commonwealth Bank of Australia Group, or any of their Board members or directors (as the case may be), nor any other person or party, guarantees the securities offered in this website or the performance of those securities (including any of the investments or returns made in respect of the securities).

A copy of the Investment Statement for the FirstChoice KiwiSaver Scheme is available here or by calling 0800 1ST CHOICE (0800 178 246).