Recently, the NZ and Australian governments reached agreement on portability of retirement savings.
QUESTION: I joined KiwiSaver when I finished university and started my first job. I have been a member for nearly four years and think I have about $10,000 in my account. I plan to go overseas at the end of the year. Can I cash up my KiwiSaver?
ANSWER: Once you stop working in New Zealand and go overseas you will no longer be making contributions to your KiwiSaver but the account will remain open. When you return and begin work back in New Zealand, your contributions to your KiwiSaver can then re-commence.
If you plan to emigrate on a permanent basis, it will depend on where you are planning to live as to how transferable your KiwiSaver becomes. If you leave New Zealand permanently and settle in, let's say, Britain, you may be able to cash up your KiwiSaver after you have been away for at least 12 months or request that the proceeds be transferred to an authorised superannuation scheme. The amount transferred will include the total balance less any Government tax credits you have received.
If, on the other hand, you decide to settle across the ditch, you will soon have only one option. Recently, the NZ and Australian governments reached agreement on portability of retirement savings. Australian legislation is expected some time during 2011 to allow for the transfer of full KiwiSaver entitlements, including the Government tax credits, to an Australian complying super scheme. This will also be reciprocal - so Australians settling in New Zealand will be able to transfer their scheme into a KiwiSaver scheme.
Either way, you will have to supply evidence that you are living overseas and complete a statutory declaration that you have permanently emigrated.
If you think you may return at some time it may be easier to leave your KiwiSaver scheme intact to await your return. Talk to your financial adviser or your scheme provider before you leave. Make sure you keep them updated each time you move or arrange for statements to go to your parents' address if this is an option for you.
Shelley Hanna is an authorised financial adviser FSP12241. Her disclosure statement is available on request and free of charge by calling 870 3838. The information contained in this article is of a general nature and is not intended to provide specific or personalised advice. If readers have any KiwiSaver questions they would like answered please send them to firstname.lastname@example.org