Employees need to know their rights around KiwiSaver at work or they could risk missing out on money.

Employers don't always meet their legal requirements, according to David Boyle, general manager investor education at the Commission for Financial Capability.

That could mean anything from failing to enrol employees to pocketing their deductions.

Some KiwiSaver tips workers should know include:


Understand your employment status

Many employees are actually contractors or consultants, says Boyle.

If that's you, be aware that your employer doesn't have to contribute to your KiwiSaver or take deductions from your pay to pass onto the Inland Revenue Department (IRD) on your behalf.

You could be missing out because you need to handle KiwiSaver yourself.

You can opt out

If you're auto-enrolled you can opt out within eight weeks of joining or if you're aged under 19.

But don't. KiwiSaver will benefit your financial future.

You can switch providers

If you've been auto-enrolled your money will be invested with whichever default provider your employer has chosen.

That's not the end of the world. You might, however, want to choose your own. It's not difficult to switch.

Even if you don't switch providers, it's essential to ensure you're invested with a suitable fund for your personal circumstances.

You might prefer a higher-growth investment or an ethical provider or fund.

You can search for the right type of fund at Fundfinder.sorted.org.nz. The SavvyKiwi and Canstar websites are also helpful.

Your contributions can be increased

Most employees are enrolled to pay 3 per cent of their salary. But you can choose to contribute 4 or 8 per cent (but your employer will still only contribute 3 per cent).

Ask your employer to increase your contributions if that's what you want to do. You can also make one-off voluntary contributions directly to your KiwiSaver provider or through the IRD.

Find out who is paying your KiwiSaver contribution

There's a catch with KiwiSaver called "total remuneration package".

If that's what you've agreed to in your employment agreement, your employer's 3 per cent KiwiSaver contribution comes out of your salary.

However, contributions are not allowed to take an employee's salary below the minimum wage. This means total remuneration packages aren't legal for employees on minimum wage. They must be paid the 3 per cent over and above their wage.

Contribute on parental leave

It's all too easy to stop your contributions while taking time out to parent. More women are affected by this than men and it can mean missing out on employer contributions, member tax credits and investment growth, which will have a long-term impact.

Some people just can't afford to continue contributing voluntarily. Where one spouse continues to work the couple needs to consider how to fund the other's KiwiSaver.

For the record, KiwiSaver does come out in the relationship property wash up if the couple subsequently splits. The reason to make voluntary contributions while parenting is to ensure the couple maximises retirement savings.

Check your employer is still contributing

Sadly, some employers aren't as honest as they should be.

Many Kiwis have found that their boss has failed to pass on their contributions to the IRD.

"That's illegal," says Boyle.

Checking your payslip isn't enough to ensure this isn't happening to you.

Log in at Kiwisaver.govt.nz/already to check that the payments have been received by the IRD. If the company has gone under it's too late. So check regularly.

Know your rights as a young worker

If you're aged under 18 your employer doesn't have to pay KiwiSaver contributions.

When you reach 18, make sure you ask your employer to begin contributions, otherwise you could be missing out.

Your take-home pay can't be less than what it was previously.

So your employer must pay over and above your existing pay and can't claim that you were already receiving a total remuneration package.

Exempt employers

If your employer already offers a registered superannuation scheme it may have an exemption from auto-enrolling new employees.

Exempt employers still have to make KiwiSaver available to staff who want to join and make contributions/deductions.

Things change when you hit 65

You'll stop getting the member tax credits and your employer can cease contributions.

Of course, many good employers choose to keep contributing their 3 per cent voluntarily.

If you haven't joined KiwiSaver it's too late once you reach the 65-year milestone, as one correspondent to my colleague Mary Holm found out.

The correspondent thought she had $10,000 invested, including her employer's contribution and investment growth. She was given back her $3900 contributions when it was found she had been enrolled too late.

No retirement savings scheme is perfect. But the more you know, the greater benefit you will receive as a member.