KiwiSaver providers in rush to be ready for fund moves after last-minute green light.
KiwiSaver providers have been left scrambling to get ready in time for the July 1 introduction of transtasman superannuation portability after a last minute rubber-stamp by the Australian Government.
Providers had expected to have several months to prepare for the change which will allow Kiwis to transfer money locked away in Australian super schemes into their KiwiSaver scheme.
New Zealand approved the legislation to allow transfers between the two countries in September 2010 but it took until last Friday for Australia to firm up its side of the deal - just one month out from its introduction date.
Nigel Jackson, Westpac's head of investment products, said the lead-in time was shorter than would have been ideal.
"It's going to be a bit of a scramble for everyone."
Jackson said Westpac was working towards the July 1 deadline but could not guarantee it would be ready in time.
"We are working to that date. It is a challenging one."
David Boyle, general manager of funds management for ANZ Wealth, said it hoped to be ready in time.
"We may not have the total system in place, we may have to do it manually."
Boyle said he didn't expect there to be rush of applications from July 1 and said those who did apply should be tolerant because it was a new process.
"It is going to take a bit of time to bed down ... we hope by September to have a pretty good process in place."
But a financial adviser specialising in superannuation advice predicted it could take at least six months for the first transfers to be completed.
Allan Rickerby, managing director of Super Advice Services, said those expecting a quick transfer would be disappointed.
"Realistically it will be six months before the money comes across," he said. Rickerby said he believed New Zealand's KiwiSaver providers were not yet set up to receive the money and Australian fund managers would also have to prepare to release the money.
Superannuation fund managers legally have to transfer the money within 30 days of receiving the application. But Rickerby said the challenge would be making sure all the correct information was in the application.
The situation is complicated by the fact that every time a person changes jobs in Australia a new scheme may be set up for them.
In New Zealand people keep the same KiwiSaver provider regardless of where they work or if they change jobs.
The Australian Tax office has around A$17.7 billion ($21.3 billion) in lost superannuation money and a large proportion of that is expected to belong to New Zealanders.
Bringing it home
* From July 1 Kiwis can apply to transfer money in Australian superannuation schemes to their KiwiSaver scheme.
* Home country laws will apply to the transferred money.
* Retirement savings transferred from Australia into a New Zealand KiwiSaver scheme can be withdrawn when members reach the age of 60 if they meet certain criteria.
* KiwiSaver savings transferred to Australian schemes can be withdrawn when members reach 65.