KiwiSaver: Hiccup in KiwiSaver moves to Oz

KiwiSaver flights to Australia seem to be stuck in the departure lounge. Photo / Thinkstock

Q: My partner and I are looking to transfer our KiwiSaver to Australia. Has any further traction developed on this issue since your article last year? Do you have a list of providers that can do this transfer?

A: For two years now, New Zealanders moving to Australia and Australians settling in New Zealand have been able to also relocate their superannuation savings.

The new rules made it possible to take your KiwiSaver funds, including member tax credits and the $1000 kick-start, to an Australian provider.

This replaced a regime where funds, minus the Government contribution, could be cashed up when you left for Australia. This still stands for emigrating anywhere other than Australia.

KiwiSaver providers were quick to offer transfers from an Australian superannuation fund but KiwiSaver flights to Australia seem to be stuck in the departure lounge.

Although a provider must release the funds when asked, there is no compulsion on the other side of the Tasman to accept the money.

Australian providers, bogged down in major industry changes, were putting transfers from KiwiSaver funds in the too-hard basket.

I checked with Bruce Kerr at Workplace Savings, the organisation that represents some KiwiSaver providers.

"There has been progress in the transfer of KiwiSaver funds to Australia since last year," Kerr said.

"We are aware of six Australian providers who are accepting transfers of KiwiSaver funds into their schemes: First Super, Christian Super, Emplus Super, Lucrf Super, WA Super and Telstra Super, although you can only open a Telstra Super account if you are an employee of Telstra, or the relative of an employee.

"This list is not exhaustive, as there may be additional providers that we are unaware of," Kerr added.

"We understand this is frustrating for Kiwis who have emigrated to Australia, however in order to accept KiwiSaver funds most Australian providers are required to make costly changes to their systems, which has prohibited many Australian providers from doing so."

Being less than a decade old, KiwiSaver is the new kid on the block compared to its Australian counterpart. The upside of this is the systems in place to handle KiwiSaver are newer and more easily tweaked to accommodate changes.

In time, things may change in Australia and until then your KiwiSaver can remain here. But because you're no longer living here permanently you won't be eligible for benefits like the member tax credit and first-home withdrawal.