Getting started on KiwiSaver

I have started a new work position for a small organisation and among my many duties I am responsible for payroll. This is new to me, and I am not sure what KiwiSaver information I should be gathering from my staff. Not all are in KiwiSaver and there is one person that has started at the same time as me. Does she need to fill out a KS2 form if she wants to be in KiwiSaver?

Your new role may look daunting, but help is just a few keystrokes away.

You can read up on your KiwiSaver obligations as an employer or payroll person on the IRD website.

Your first task is to check whether new employees are eligible to join KiwiSaver.

Anyone under the age of 65 who is entitled to live in New Zealand indefinitely can join KiwiSaver.

Foreigners here on a work visa are not entitled to join. With just a few exceptions (see below) new staff members who are eligible have to be opted in when they start a new job.

You should fill out a KS1 form for each of these new employees.

This provides Inland Revenue with basic information both on you as the employer and your employee.

This form should be completed even if the new staff member says that they plan to opt out of KiwiSaver.

Eligible staff members under 18 or employed on a temporary basis (28 days or less) or casual agricultural workers (three months or less) do not have to be opted in.

They can still choose to be in KiwiSaver and employer contributions must be paid. They should fill out a KS2 form and give it to their employer.

Eligible existing employees can also sign up to KiwiSaver at any time by filling out a KS2 form. An email or verbal instruction to their employer may be enough, but they should check their payslip to make sure that contributions have started.

The KS2 form is a written record for the employer of their employee's intention to join and their contribution rate - they can choose 3 per cent, 4 per cent or 8 per cent.

Having this written record is protection for the employer in case there is any dispute down the track either about that date of joining or the contribution rate.

An eligible new staff member has eight weeks from the day they start their new job to opt out of KiwiSaver.

They have to complete the KS10 Opt Out form.

All contributions both employee and employer will be refunded by Inland Revenue.

If you have a good payroll system at your workplace, this will help you manage your employees KiwiSaver status and contributions.

You will be asked to select from four options: automatically enrol; definitely exempt; opted out; opted in. Under each option you will be given specifications and explanations.

Your payroll system will also keep track of all contributions and you can provide information to any staff member who asks for it.

You should avoid giving investment advice to staff members, but you can invite suitably qualified people into the workplace to talk about KiwiSaver.

Some workplaces sign an agreement with a fund manager to be a "preferred provider".

This means that all new members are signed up to that fund manager's Scheme, instead of being randomly allocated to a default Scheme by Inland Revenue.

The fund manager may give free seminars on retirement planning and money management to your employees.

Employees who wish to join a different Scheme can do so.

Finally, to make sure you are on top of your KiwiSaver obligations, read the IRD information sheet 'Meeting your Employer Obligations for KiwiSaver'.

This runs through all scenarios.

- Shelley Hanna is an authorised financial adviser (FSP12241). Her disclosure statement is available on request, free of charge, by calling (06) 870 3838, or see peak.net.nz. The information contained in this article is of a general nature and is not personalised.
Send your KiwiSaver questions to shelley.hanna@peak.net.nz.