What is an Employer's Chosen Scheme?
There are a number of ways an employee can be allocated to a KiwiSaver scheme. As an employer, you can choose a KiwiSaver scheme for your business and staff. Your employees will be allocated to your chosen KiwiSaver scheme when they join KiwiSaver, unless they choose an alternative KiwiSaver scheme.
An Employer's Chosen Scheme can:
- provide you with access to support for any KiwiSaver queries that you or your employees may have;
- allow you to redirect KiwiSaver enquiries to a trusted expert;
- give you access to specialist assistance in promoting your KiwiSaver message;
- give your employees a clear message of support that you are interested in their financial well-being;
- help you communicate a consistent KiwiSaver message to your employees;
- introduce an independent investment expert for your employees to turn to.
Who do I contact if I want to choose the FirstChoice KiwiSaver Scheme as my Employer's Chosen Scheme?
If you've decided to choose FirstChoice KiwiSaver as your Employer's Chosen Scheme, we look forward to working with you and your employees.
Click here to request a FirstChoice KiwiSaver Employer Guide.
If you'd like to discuss your options, or you have any questions, please contact our Employer Sales and Support team on 0800 782 330 or email kiwisaver@asb.co.nz.
Once I have sent in my Employer's Chosen Scheme Agreement, what do I do next?
Once you've sent back your Agreement, you won't need to do anything until you receive the FirstChoice KiwiSaver Investment Statements. You'll then need to hand these out along with the Inland Revenue KiwiSaver Information Packs (KS3) and a simple statement (we will supply a draft for you) advising your employees if they do not select their own KiwiSaver scheme they will be placed in FirstChoice KiwiSaver.
If you need additional Investment Statements, simply call or email us and we will send them to you. You'll then have access to all the help and support materials you need. And remember, we're here to assist, simply call 0800 782 330 or email kiwisaver@asb.co.nz
What happens if I do not select a KiwiSaver scheme for my employees?
If neither you nor your employee selects a scheme, Inland Revenue will automatically allocate your employee to one of the six default schemes.
What is a default KiwiSaver scheme?
Individuals who are automatically enrolled or opt into KiwiSaver and do not select a scheme (and whose employer has not chosen a preferred scheme) will be allocated to one of six default schemes by Inland Revenue.
Which employees do not need to be automatically enrolled?
Employees who do not meet the citizenship and residency requirements, including people who hold temporary, visitor and student permits cannot be KiwiSaver members.
Here are some examples of where automatic enrolment does not apply:
- Staff employed on a temporary employment contract of 28 days or less.
- Casual agricultural workers.
- Employees under the age of 18.
- Employees over the age of eligibility for New Zealand Superannuation (currently age 65).
- Election day workers or private domestic workers (where they pay their own PAYE).
- People who only receive payments subject to withholding tax.
- Anyone who is not required to have PAYE deductions made from their salary or wages.
- Anyone who changes jobs but stays on the same payroll (for example the business is sold or amalgamated).
- Employees of an exempt employer.
What happens if I have a temporary employee where I extend the contract past 28 continuous days?
Once you extend the contract beyond 28 continuous days you must give them a KiwiSaver information pack, enrol them in KiwiSaver and start deductions from their next pay.
I have a lot of staff under age 18 - what do I tell them?
New and existing employees under age 18 are able to join KiwiSaver, but only by contacting a scheme provider (such as ASB Group Investments) directly. Once the employee has been accepted by the scheme, you will need to start deducting their KiwiSaver contributions from their gross salary or wages. Normal rules apply for deduction levels; they should be set at 2% of the employee's gross salary or wages unless the employee requests to contribute at 4% or 8%.
What if I have employees with more than one job?
Employees with more than one job will be able to choose to join KiwiSaver and make contributions from any or all of their employment sources. However, contributions will need to be deducted from an employee's salary or wages on all new jobs started within 12 months of joining KiwiSaver. 12 months after the member's first contribution to a KiwiSaver scheme, the member can apply for a contributions holiday from any or all jobs.
What do I do when a new employee joins my company and they are already a member of a KiwiSaver scheme?
You will need to commence deductions from their first pay and forward to Inland Revenue accordingly.
Do I have to do anything if my employee wants to change KiwiSaver schemes?
No, this is managed by Inland Revenue and the new KiwiSaver scheme provider.
Do employers have to contribute?
Yes, 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 not yet eligible to receive their KiwiSaver retirement benefit.
Compulsory 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.
You may be exempt from making KiwiSaver employer contributions, or able to pay a lower percentage, if you (the employer) are already making employer contributions to an existing registered superannuation scheme (including complying superannuation funds). Any tax free employer contributions to complying superannuation funds also reduce the level of tax free employer contributions to KiwiSaver.
Can I reduce my employer contributions?
If you currently contribute more than 2% into your employee's KiwiSaver accounts and wish to reduce your contributions to the compulsory employer contribution rate of 2%, we suggest that you seek legal advice.
What do I have to do if an employee wishes to reduce their contribution rate?
You can either ask your staff for written confirmation of their intention to reduce their contribution rate or ask them to complete a KiwiSaver deduction form (KS2). You will then need to reduce the contribution rate through your payroll system.
What if our company already has an existing superannuation scheme?
If you currently offer a superannuation scheme for your employees and would prefer to continue with this scheme instead of KiwiSaver, you can apply for an exemption from the automatic enrolment requirements, as long as your existing scheme meets certain criteria.
ASB Group Investments can help you work through your options and assist you to determine the best approach for your business. Contact us at firstchoice@asb.co.nz or phone 0800 1ST CHOICE (0800 178 246).
Can I still claim the $20 per week employer tax credit?
No, the employer tax credit that you may have received from the Government prior to 1 April 2009, is no longer available.
Where can I find more information about KiwiSaver?
You can find more information at www.kiwisaver.govt.nz or go to the Inland Revenue's website at www.ird.govt.nz/kiwisaver/employers
Disclaimer
A copy of the Investment Statement for the FirstChoice KiwiSaver Scheme ("FirstChoice KiwiSaver") is available here or by calling 0800 1ST CHOICE (0800 178 246).
