Retirement savings brought back to New Zealand won't be hit by IRD, but watch out for Australian exit fees.

My husband and I both have money in Australian Superannuation Schemes from a few years ago. We want to move it to our KiwiSaver Schemes as soon as we are able in July. We were wondering if we will be taxed on this money by the Australian or New Zealand government, and if there will be any other charges or fees we will need to be aware of.

It's great that you've given thought to consolidating your superannuation savings ahead of July 1. We can confirm New Zealand will not tax any transfers from Australia and Australia will not specifically tax any transfers of retirement savings to New Zealand. Earnings on your Australian superannuation savings will continue to be taxed (at a flat rate of 15 per cent) while your savings are still invested in Australia. Once in KiwiSaver, earnings will also be taxed (under the current Portfolio Investment Entity (PIE) tax regime). In regard to fees, your Australian superannuation provider should disclose any transfer or exit fees before you initiate the transfer. Although unlikely, you should also check with your KiwiSaver provider if any incoming transfer fees may be charged.
•Vedran Babic, Fisher Funds operations manager.

In the KiwiSaver rules it is stated that "all employer contributions paid to a superannuation fund for the benefit of an employee are liable for ESCT (employer superannuation contribution tax). The exception to this is if the employee and employer have agreed to treat some or all of the employer contributions as salary or wages under the PAYE rules". Does this mean that if the employer and employee agree the employee can get the amount equivalent to superannuation contribution tax paid to him as part of salary instead of paying to the superannuation fund?

Employer contributions to a superannuation or KiwiSaver scheme are generally subject to employer's superannuation contribution tax (ESCT), and are not salary or wages for the purposes of the PAYE rules. However, an employer and employee may agree to treat some or all of the employer's contribution as salary and wages. The contribution must still be made to the superannuation or KiwiSaver scheme, and it will still be taxed, but (where an agreement is in effect) it will be taxed under the PAYE rules rather than the ESCT rules. Either way the employer contributions are taxed and the tax is paid to Inland Revenue, and it is not possible for the employee to get the amount equivalent to ESCT or the employer's contribution paid to him or her as salary instead of it being paid to Inland Revenue (in the case of ESCT) or the scheme (in the case of the employer contribution).


Although it would be nice if that were the case. ESCT rates are calculated on the basis of the sum of the employee's before-tax salary or wages and his or her employer's contributions for the previous income tax year (or the estimate sum of the employee's before-tax salary or wages and employer's contribution for the relevant income tax year if the employee was not employed for the whole of the previous income tax year). PAYE rates are based solely on an employee's before-tax salary or wages, so it is possible for ESCT and PAYE rates to be different. However, do not expect a tax windfall (in the form of an increased employer contribution to your superannuation or KiwiSaver scheme) if your employer agrees to treat their employer contribution as salary and wages. Because the PAYE and ESCT rates broadly align, any tax benefit would be marginal in most cases. In addition, if you and your employer agree to this arrangement, your salary and wages will increase, which could adversely affect your obligations and/or entitlements where these are based on salary and wages.
•Emma Harding, Chapman Tripp senior solicitor, Simon Akozu, Chapman Tripp senior solicitor.

While many people might be balancing KiwiSaver vs mortgage payments I've got a hefty student loan to deal with before I even get to the point I can save for a house. I'm paying off more than the minimum required so I can shift the debt as fast as possible but is this coming at the expense of my retirement savings?

It's important to start planning for your retirement sooner rather than later. As people are living longer than ever we'll need more savings to enjoy a comfortable lifestyle later in life. Deciding when to start planning for retirement will depend on a number of factors, in particular your current situation, and that's where a financial adviser comes in. They can work with you to figure out what it is you want and need to do, and put a plan in place to help you achieve your short and long-term financial goals. In most cases an initial consultation is free of charge.

•Fiona Oliver, AMP general manager of wealth management.

•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 NZ Herald's panel of industry players email Helen Twose,