Helen Twose

Helen Twose on KiwiSaver and you

Helen Twose: IRD can help sort Novopay problems

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Inland Revenue's website has information for people affected by the teacher pay issues, including KiwiSaver.

A Cyprus-type raid on KiwiSaver funds is not possible without a law change.  Photo / AP
A Cyprus-type raid on KiwiSaver funds is not possible without a law change. Photo / AP

I am a retired school teacher who does casual relief teaching to supplement the pension.

When Novopay set up my pay they deducted KiwiSaver funds without my consent.

It took a few pay days to get this stopped but they took $127.18 and I am wondering how to get reimbursed for this amount.

Do I wait until the end of financial year tax return?

How does this work?

A: Inland Revenue are the people you need to contact. They receive KiwiSaver contributions from employers.

Every payday employers deduct KiwiSaver contributions from members' salary or wages.

They then send the contributions to Inland Revenue, usually by the 20th of the following month.

Inland Revenue then take about a month to check all the payroll details are correct before sending the contributions to KiwiSaver providers.

The contributions process is detailed on Inland Revenue's KiwiSaver website at http://www.kiwisaver.govt.nz/already/track-contrib/contrib-process/.

If there is an issue with your pay or deductions Inland Revenue's advice is to contact your payroll administrator first.

But it sounds like you have already done that.

So your next step would be to contact Inland Revenue directly.

Make sure you have your IRD number to hand when you call.

Inland Revenue's website has information for people affected by the Novopay issues - you can find this at http://www.ird.govt.nz/news-updates/like-to-know-update-ir-novopay.html.

•Joe Bishop, Kiwibank head of wealth products

Q: When news broke that Cyprus was going to raid the bank accounts of its depositors many wondered if it could happen here.

I'm more concerned that there is a possibility the Government could dip into KiwiSaver accounts to shore up its finances.

In time I, like many New Zealanders, will probably end up with more invested in KiwiSaver than in the bank. How well are investors funds protected?

A: KiwiSaver is governed by the KiwiSaver Act 2006, but is also subject to other regulations and legislation such as the Securities Act 1978 and the Income Tax Act 2007.

Any changes to the KiwiSaver rules or other legislation, such as changes to contribution rates or taxation of your savings, can only be made by a law change.

While the Government can propose changes, it needs to go through the legislative process before any can be made.

Your savings invested in a KiwiSaver scheme and any returns generated by those savings are not guaranteed either by the Government, your KiwiSaver scheme provider, trustee or any other party involved with your KiwiSaver scheme.

However, your scheme provider and trustee have a legal duty of care to members of their KiwiSaver scheme and are required to act in the best interests of members.

•Fiona Oliver, AMP general manager of wealth management.

Q: I have been in a KiwiSaver conservative fund since the scheme's inception.

I'm now 61 and I've been contributing at the 8 per cent rate and the employer contributions have mostly been at 4 per cent so I now have almost $80,000 in my account.

I've been reasonably satisfied at the returns I have been getting - approximately 5 per cent per annum after fees.

However, I have decided that I would like to join a growth fund for the remainder of my years of paid work, but, while happy with my provider's conservative fund performance, I'm not impressed with its growth fund performance. I would therefore like to sign up to another provider's growth fund, but would like to leave my $80,000 where it is.

If I were doing this as a normal investment decision it would be easy.

I'd just stop contributing to my conservative fund account and I'd join a growth fund elsewhere and start paying money in to that.

However, I've read that one can only belong to one KiwiSaver provider.

I fully understand that I can't contribute to two at once.

This would have IRD processing two sets of employer contributions and giving me two sets of tax credits.

This is obviously unfair and would be an administrative nightmare.

What I'm talking about is stopping all contributions to my current KiwiSaver account and leaving it lying totally dormant.

I would then join another provider's growth fund for the next few years with all contributions and tax credits going to this new account.

Surely this is not disadvantaging anyone, and gives KiwiSaver contributors the flexibility that the market needs to seek the best provider.

Some providers may be good defensively and others better at aggressive investments.

This is how the real market operates and what is on offer for non-KiwiSaver money.

A: Congratulations, your example really illustrates how regular savings in KiwiSaver can quickly become substantial. As the law currently stands you can only be a member of one KiwiSaver scheme at a time.

While I understand your seeking flexibility, it would be administratively complex to allow membership of more than one scheme at a time and seems unlikely to change in the foreseeable future.

All I can suggest in these circumstances is to look for a KiwiSaver provider with capabilities in managing both growth and conservative assets that you are comfortable with.

A scheme that employs specialist managers for the different asset classes may be a good solution.

•Kate Armstrong, Westpac Head of Investments and Insurance.

•Disclaimer: Information provided is stated accurately to the best of the respondent's knowledge at the time of publication. It is general in nature and should not be construed, or relied on, as a recommendation to invest in a particular financial product or class of financial product. Readers should seek independent financial advice specific to their situation before making an investment decision.

To have your KiwiSaver questions answered by the Herald's panel of industry players, email Helen Twose, helentwose@gmail.com.

- NZ Herald

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