Kiwisaver: Employer cash lags by a few months

The KiwiSaver website advises reconciling your contributions with what is in your provider account every six months. Photo / APN

Money goes to Inland Revenue after tax deducted and appears in account after details have been checked.

I pay into a standard KiwiSaver scheme (3 per cent me, 2 per cent employer), the ASB KiwiSaver provider.

One sum is taken out each month from my salary for each side, employer and me.

Obviously the employer's contribution each month is slightly less but that's not the problem.

On checking my KiwiSaver deposits in my ASB bank account, the employer's contribution is a lot less than what has been taken from my salary each month, and instead of one payment it consists of a lot of smaller deposits, which I can't reconcile, with different totals each month.

I know the IRD deposits these amounts, but I feel that a lot of money seems to have gone missing over the course of the year.

My contribution is always shown in one figure so is easy to check.

They say there is a delay for the IRD portion, which is fair enough, but surely it should still be the same deposited amount as what has been deducted from my pay?

Please help!

"If you are over 18, employed and contributing to KiwiSaver, then in most circumstances your employer has to put money in for you too - currently 3 per cent of your before-tax salary, less employer's superannuation contribution tax (ESCT)," says Craig Haycock, ASB's general manager of products and strategy.

When KiwiSaver began, employer contributions were only 2 per cent but that changed last April when it lifted to 3 per cent.

In April 2012, the government introduced an Employer Superannuation Contribution Tax (ESCT) on KiwiSaver contributions from your boss.

Previously that 2 per cent contribution had been tax-free.

The ESCT rate ranges from 10.5 per cent to 33 per cent depending on your salary and employer contributions.

"Deductions from your salary generally take around three months to reach your KiwiSaver account," says Haycock.

"Your employer pays them to Inland Revenue (along with your PAYE tax); Inland Revenue checks them and (if correct) forwards them to your KiwiSaver provider."

The KiwiSaver website says contributions can take up to three months to be transferred to your provider but will earn a small amount of interest - currently 1.57 per cent - which will be credited to your KiwiSaver account.

The delay is down to the time it takes Inland Revenue to run checks on the payroll report employers need to file on the 20th of each month.

The process can take longer if there are any queries or information missing.

"Contributions don't always arrive in the order they were deducted and they won't always arrive as a single payment," says Haycock.

"The best way to track your contributions is to sign up for Inland Revenue's My KiwiSaver online service at kiwisaver.govt. nz."

My KiwiSaver records contributions made to the Inland Revenue, including the government kick-start and member tax credits, but doesn't keep track of your overall KiwiSaver balance, investment returns or any money you may have paid directly to your provider.

It will tell you when Inland Revenue transfers contributions to your KiwiSaver provider and how much interest was earned.

"It might pay to check with your employer that the contribution you are looking at on your pay slip is after ESCT has been deducted - that should reconcile with what you see in My KiwiSaver," Haycock says.

"Reconciling KiwiSaver contributions is not easy - but it should be possible between your pay slips, the Inland Revenue My KiwiSaver service and, as you are an ASB KiwiSaver Scheme member, FastNet Classic online banking."

The KiwiSaver website advises reconciling your contributions with what is in your provider account every six months, by which time any timing differences will have worked their way through the system.

"We invite you to contact one of our helpful team of specialists on 0800 ASB RETIRE (0800 272 738) if you have any questions," says Haycock.

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.