KEY POINTS:
Frustrated KiwiSaver investors are furious there are still major delays in processing their employer contributions more than six months after the incentive kicked in.
Several investors have told the Business Herald their first employer contributions went through after they became compulsory on April 1, but contributions since then
have become stuck with Inland Revenue.
One investor, who did not wish to be named, is experiencing double frustration as a KiwiSaver and as the financial manager at his workplace.
As well as delays with his own contributions, he has been fielding up to 10 queries a week from staff members concerned about the holdups.
The financial manager said he had been calling the IRD for the past eight weeks trying to sort it out, only to be told there was a computer error that was being fixed "as soon as possible".
But he said the story changed last week when he was told the delay was likely to be because his employer was not making the contributions. "But I know they are being paid because I sign the cheques.
"My concern is that the organisation does not get the credit for paying the contributions to staff. And from a personal point of view I'm worried the money will get lost," he said.
"The IRD has now had nine months to initially set up the system and a further six months to fix it."
Employee contributions to the superannuation scheme are Government guaranteed, so as long as information on the employer schedule is correct, the money can be passed on to the fund manager without it being with the IRD.
But the employer contributions have no such guarantee so the money must physically arrive with the IRD before it can be transferred to KiwiSaver providers.
The advent of employer contributions has effectively doubled the number of payments Inland Revenue must handle per person.
Before the start date, the department said it was well prepared to handle the influx, having spent months sorting out the system in the wake of major delays following the launch of KiwiSaver last year.
Some KiwiSavers have been told the delays are only an issue for those who are being paid at the 4 per cent employer contribution level rather than the minimum 1 per cent.
But not all of those who are having problems are being paid the 4 per cent.
Other investors have been given no explanation for the delay, although the IRD has admitted there are problems.
Inland Revenue group manager customer operations Heather Daly said as of September 30, 93 per cent of employer contributions deducted between April 1 and July 31 had been processed and sent through to providers.
"The 7 per cent of employer contributions that have not been finalised may be affected by problems with the employer report, or the money simply may not have arrived at Inland Revenue with the report.
"We are working hard with employers to raise awareness of their obligations to deduct these funds, and to educate them about how to fill in the monthly report correctly."
Daly said in some cases the transfer of employer funds may also have been affected by a system problem which occurred intermittently when there had been manual intervention to correct or change data on the employer reports. The department believed it had resolved the problem.
Staples Rodway associate tax partner Matt Baker said payment delays had improved markedly in the last couple of months but were still taking one to two months to come through.
"They seem to be travelling along at about a month or so behind for most of our members."
But he said reconciling the accounts of those in KiwiSaver was still a huge challenge because the payments came through in different amounts which could vary from a dollar to several hundred dollars.
The Inland Revenue is expected to launch new information on its website in the next couple of weeks explaining about how long it takes for KiwiSaver payments to come through.
* Have you experienced delays with your employer contributions being passed on? The Business Herald would like to hear from you. Email business@nzherald.co.nz