Helen Twose: My wife missed out on $16,500 from KiwiSaver

It is up to new staff to decide if they want to remain or opt out. Photo / Getty Images

Q: My wife and I moved to Rotorua from Australia eight years ago. She started teaching in 2009 as maternity cover, then fulltime from 2010. She had been given links for KiwiSaver by the payroll department in 2009 but didn't follow it up. Looking now at that link, the fund states it stopped taking new members with the KiwiSaver changes in 2008. By my calculations she has missed out on at least $12,500 of employer contributions and $4000 of Government contributions.

A: Unlike in Australia, where superannuation saving is compulsory, joining KiwiSaver is your choice. But employers are required to sign up all eligible new staff to KiwiSaver and immediately begin deducting and adding KiwiSaver contributions.

It is up to new staff to decide if they want to remain or opt out. There are limited exceptions to this automatic sign-up rule, including contractors, secondees and casual staff.

Chris Partridge, CEO of payroll specialists SmartPayroll, says employers are obligated to give new staff a KiwiSaver information pack (KS3) within seven days.

"The pack contains an introduction to KiwiSaver and a KS2 (joining) form. If the employee decides to join, they fill in the KS2 form stipulating if they want to make contributions at 3, 4 or 8 per cent.

"If the employee doesn't complete the form the employer must still enrol them in KiwiSaver and make deductions at the default rate of 3 per cent from their first pay," he says.

"An employer is also legally required to contribute to an employee's KiwiSaver at 3 per cent of their gross salary or wage."

The employer must inform IRD and the employee has eight weeks to decide if they want to opt out.

If they don't choose a KiwiSaver scheme IRD will allocate one automatically when it receives their KiwiSaver contribution.

Some companies have a preferred scheme, but employers must advise new employees in writing, including an investment statement, that they'll be allocated to this scheme unless they choose their own, says Partridge.

If a KiwiSaver scheme closes, your provider will be in contact to let you know what your options are.

Partridge says the Ministry of Business Innovation and Employment's Employment New Zealand service - 0800 20 90 20 - may be able to give more advice.

• IRD KiwiSaver link for employers