Finance Minister Bill English at yesterday's Australian Business Economists luncheon in Sydney. Photo/AP
New Zealanders with retirement savings left languishing in Australian accounts will soon be able to bring their money back, after a deal was signed today between Finance Minister Bill English and Australian Treasurer Wayne Swann.
The ministers are portraying today's move as " significant progress towards a single economic market".
Today's memorandum of understanding will allow New Zealanders and Australians to transfer retirement savings across the Tasman should they move.
Currently when New Zealanders work in Australia and move back their compulsory retirement savings are left behind.
Australia's Tax Office estimated last year it had about A$13 billion ($16.6 billion) in the "lost" accounts in the Australian superannuation system, with a huge chunk of the money belonging to New Zealanders.
"This will make it easier for people to move freely between the two countries and help to return people's "lost" retirement savings," says a statement issued this afternoon by the two ministers.
A tax treaty was also signed and talks about speeding up "regulatory harmonisation" to stimulate business and create jobs. More talks on this will be held between the two country's Prime Ministers when they meet next month.
Retirement savings portability:
The memorandum of understanding will allow transfers of retirement savings between certain Australian superannuation funds and New Zealand KiwiSaver funds.
Participation in the scheme will be voluntary for eligible funds, as well as for individuals wishing to transfer their retirement savings.
The two Governments believe it will "enhance the movement of labour between the two countries by enabling individuals to streamline and consolidate their retirement savings in their country of residence."
It will also reduce the exposure to "multiple sets of fees and charges" and should "support the growth of individual's retirement incomes."
Another benefit for the Australian Government is the expected cut in the number of small, uneconomic accounts sitting idle in the Australian compulsory superannuation scheme.
New Zealanders who have returned home after working in Australia but have lost track of their retirement savings in Australia can go to the
Australian Taxation Office website to check for lost accounts. www.ato.gov.au/superseeker.
- NZ HERALD STAFF / NZPA
