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Frequently Asked Questions
What are my responsibilities in
relation to KiwiSaver?
Where can I get more Employee Packs from? Which employees qualify for KiwiSaver? How much do I deduct from salary/wages? Do I deduct contributions from Redundancy payments? Where are employee and employer contributions paid? When do I have to start making contributions? What records do I need to keep? How do employees choose a KiwiSaver scheme? Can I select a Preferred Provider without being liable for Investment performance? Should I select a Preferred Provider? Why should I pick AonSaver as my Preferred Provider? If I select a Preferred Provider, can employees still choose their own KiwiSaver Provider? What does AonSaver cost? How can you help my staff understand more about KiwiSaver? How do I select AonSaver and what does it mean? What is the difference between a Preferred Provider and a Default Provider? As an Employer I already contribute to a scheme, do I need to contribute again to KiwiSaver? What are the penalties if I do not meet my obligations? What are my responsibilities in relation to KiwiSaver? All employers are required to:
Where can I get more Employee Packs from? The employee packs are supplied by Inland Revenue. You can
download them from the IRD website at www.ird.govt.nz/kiwisaver or
at www.kiwisaver.govt.nz. You can also call Inland Revenue on 0800
257 777. Which employees qualify for KiwiSaver? Any employee who meets the following criteria can be enrolled into KiwiSaver by their employer:
Seasonal agricultural and domestic workers can opt-in but are not subject to automatic enrolment rules. back How much do I deduct from salary/wages? Employees are required to nominate a contribution rate of either 2%, 4% or 8% of their gross taxable income. If an employee does not make a choice, you are required to make deductions at 2%. From 1 April 2013: The minimum employee deduction might increase from 2% to 3%. Deductions are made on their gross taxable income: Wages + Overtime + Taxable Allowances = Gross Taxable Income x 2%, 3%, 4% or 8% You record the KiwiSaver deduction on the IR348 Employer
Monthly PAYE Schedule, or on the IR File if you file your PAYE
Schedule electronically. Do I deduct contributions from Redundancy payments? No. Where are employee and employer contributions paid? Both employer and employee contributions are paid to Inland
Revenue with your PAYE payments. An EMS (Employer Monthly
Schedule) has been created that will have two extra columns - one
for employee contributions and one for employer contributions.
Inland Revenue will pay the contributions to the member's
KiwiSaver Provider using their IRD number as the unique account
identifier. When do I have to start making contributions? Employers are required to make a 2% contribution to all KiwiSaver accounts belonging to staff who have joined KiwiSaver. From 1 April 2013: Compulsory employer contributions might increase from 2% to 3%. There is no contribution payable for employees who are not
KiwiSaver members. What records do I need to keep? We recommend you have a documented procedure to show that you distributed KS3 packs to all new employees, and existing employers who indicate they want to opt-in to KiwiSaver. We also recommend you date stamp and keep copies of the following information.
back How do employees choose a KiwiSaver scheme? It is up to individual employees to identify their own provider. They can find out who the KiwiSaver Scheme Providers are by logging on to the official KiwiSaver website at www.kiwisaver.org.nz. If employees do not choose a specific scheme, they will be
allocated to the Employer's Preferred Provider. If the Employer
does not have a Preferred Provider, each individual enrolled
member will be allocated to a Default Provider. Not all employees
will be allocated to the same Default Provider. Can I select a Preferred Provider without being liable for Investment performance? Yes. Merely passing on information about KiwiSaver to employees, or choosing a KiwiSaver scheme for their employees who do not choose their own scheme, will not make an employer liable as a promoter or investment provider under the investment advisers and securities legislation. This explanation also appears in the 'KiwiSaver Questions and Answers' dated 18 September 2006 on the Treasury website at www.treasury.govt.nz/kiwisaver. Employers should not provide any advice on which investment
option may be appropriate for individual KiwiSaver members. For
advice on investment options KiwiSaver members should be referred
to www.sorted.org.nz or contact an Authorised Financial Advisor. Should I select a Preferred Provider? Yes. A Preferred Provider will assist with any questions you or your staff have. It will mean you can direct all queries to one place for support, rather than dealing with just Inland Revenue and multiple Default Providers. If you select AonSaver, you and your employees will get the benefits of:
back Why should I pick AonSaver as my Preferred Provider? AonSaver offers a range of benefits and attractive features to both employers and individuals, namely:
Specialist Administrator -
Aon has a specialist team that has been administring superannuation and retirement savings schemes since 1976. Aon currently administers a large portion of the KiwiSaver schemes currently operating.
Independence -
Aon does not manage your money or invest it in finance companies. Aon has selected four leading fund managers. We monitor their performance, and if required can remove and replace a fund manager if they under-perform.
Specialist Fund Managers -
We have selected four leading fund managers, offering a choice of 13 funds in which you can invest your retirement savings. These fund managers are independently rated and monitored. AonSaver allows members to split their investments across funds and investment managers. Most KiwiSaver schemes only offer one choice of Fund Manager, the same Fund Manager who brings you the scheme.
Investment Choice -
AonSaver offers 13 funds. Members can select any one, or up to four funds in which to have their savings invested. We also offer the "set and forget" Russell Target Date Portfolios. These set and forget funds automatically change their investment strategy as you get closer to your retirement age. They take the complexity out of the decision over which fund to invest in.
Daily Unitised Fund -
Money received is invested daily with the fund members have chosen. Investment returns are reported back overnight and member accounts are updated daily.
Online Viewing -
Once you have opened your account, you will receive an eBenefits certificate with your User ID and password that will enable you to log in and view your account online. If I select a Preferred Provider, can employees still choose their own KiwiSaver Provider? Yes. Even if you enrol employees with your Preferred Provider, they can still select their own KiwiSaver Scheme. Any member of KiwiSaver can change their KiwiSaver Provider every three months. backWhat does AonSaver cost? There is no cost to employers. All fees are charged direct to member accounts. An administration charge of up to $50 per year will be debited to each member account. Our fund manager fee, including our trustee fee, ranges from 0.74% to 1.05% on funds under management. These fees range depending upon the type of investment. For members under 18 our administration charge is $40 per year. This amount will be debited to the members account. backHow can you help my staff understand more about KiwiSaver? AonSaver has a KiwiSaver in a Nutshell booklet available to your staff. In addition the AonSaver Investment Statement provides an explanatory
note on the types of investments offered and which may be
appropriate to each individual. Our website at www.aonsaver.co.nz
also has information and calculators that may assist. If your
employees need further advice, they need to contact a financial
adviser for more detailed advice. A list can be obtained at
www.sorted.org.nz How do I select AonSaver and what does it mean? To select AonSaver as your Preferred Provider visit our website, www.aonsaver.co.nz and select the 'register now' function under the employer section. You will be asked to provide your payroll IRD number and contact details. The terms and conditions will be available for you to view, but the appointment of AonSaver can be revoked at any time. Alternatively, you can contact your local Aon office and sign an agreement with an Aon broker. By selecting AonSaver as your Preferred Provider, Aon will provide you with:
back What is the difference between a Preferred Provider and a Default Provider? A Preferred Provider is a KiwiSaver scheme that an employer actively selects. All staff enrolled in KiwiSaver will be enrolled with the employer's Preferred Provider if the employee does not actively select their own KiwiSaver scheme. A default Provider is a KiwiSaver scheme that Inland Revenue will allocate members to where neither the employer or the employee have actively selected a Preferred Provider. The risk for employers in not selecting a Preferred
Provider is that staff will be allocated to different Default
Providers and the employer will not have any point of reference
for support. As an Employer I already contribute to a scheme, do I need to contribute again to KiwiSaver? Employers who contribute to Superannuation schemes established prior to 17 May 2007 (budget night) can elect to have their employer contribution count toward their compulsory KiwiSaver Employer contribution. You will also need to advise your employee if you choose to do this. Contact us if you want one of our consultants to speak with
you and explain this further. What are the penalties if I do not meet my obligations? The penalties for failing to provide employees with KS3 Employee Guides and Investment statements, and/or failing to deduct KiwiSaver contributions is $50 for a small employer, and $250 for a large employer. In addition, standard PAYE late payment penalties apply to
any late paid KiwiSaver contributions. Why should I choose AonSaver?
Can I join KiwiSaver? Can I join KiwiSaver if I am self employed or not working? What do Children and Young People get out of KiwiSaver? How do I choose a KiwiSaver Scheme? How much do I put into my KiwiSaver Account? How do the tax credits work? Where are my savings invested? What are contribution holidays? How does the first home deposit subsidy work? When can I get my savings out? Why should I choose AonSaver?
With so may KiwiSaver schemes on offer you may be asking what makes AonSaver different, or why it may be appropriate. AonSaver offers individual members the following benefits:
Specialist Administrator -
Aon has a specialist team that has been administring superannuation and retirement savings schemes since 1976. Aon currently administers a large portion of the KiwiSaver schemes currently operating.
Independence -
Aon does not manage your money or invest it in finance companies. Aon has selected four leading fund managers. We monitor their performance, and if required can remove and replace a fund manager if they under-perform.
Specialist Fund Managers -
We have selected four leading fund managers, offering a choice of 13 funds in which you can invest your retirement savings. These fund managers are independently rated and monitored. AonSaver allows members to split their investments across funds and investment managers. Most KiwiSaver schemes only offer one choice of Fund Manager, the same Fund Manager who brings you the scheme.
Investment Choice -
AonSaver offers 13 funds. Members can select any one, or up to four funds in which to have their savings invested. We also offer the "set and forget" Russell Target Date Portfolios. These set and forget funds automatically change their investment strategy as you get closer to your retirement age. They take the complexity out of the decision over which fund to invest in.
Daily Unitised Fund -
Money received is invested daily with the fund members have chosen. Investment returns are reported back overnight and member accounts are updated daily.
Online Viewing -
Once you have opened your account, you will receive an eBenefits certificate with your User ID and password that will enable you to log in and view your account online. Can I join KiwiSaver? If you are under the age of 65 and have New Zealand citizenship or permanent residency you are entitled join KiwiSaver and open an AonSaver account. Individuals aged between 18 and 65 years will be
automatically enrolled by their employer when they start a new
job. Other individuals under the age of 18 years, and those
already in employment can join KiwiSaver by opting-in. Individuals
can opt-in through the AonSaver website. Can I join KiwiSaver if I am self employed or not working? Yes. Individuals who are self employed or not working can open an AonSaver Account by opting-in. The amount you need to contribute to open your AonSaver Account is $200. This is also the minimum amount you need to contribute each year. You may pay this amount by cheque, or by direct debit for $20 per month. If you set up a direct debit you don't have to open the account with $200. All members over the age of 18 years qualify for and will
receive a matching tax credit of up to $521.43. Remember, to maximise your tax credit you need to contribute $1042.86 per year to your AonSaver account. What do Children and Young People get out of KiwiSaver? Individuals under the age of 18 can open an AonSaver account, but don't have to contribute at all until they start working. The government will provide a kickstart payment of $1,000 which will be invested in the member's selected fund. When the member turns 18 years of age, they will qualify for and receive a tax credit of up to $521.43 per year. To receive this, members must save $1042.86 each year. After three years of saving, members may qualify for a
first home deposit subsidy. They will be able to withdraw their
member contributions towards a deposit on their first home, and
may qualify for a home first deposit subsidy of between $3,000 and
$5,000. How do I choose a KiwiSaver Scheme? It is up to individuals to select their own KiwiSaver scheme. If you are self employed or not working, you need to contract direct with a KiwiSaver Scheme Provider. This means you obtain a copy of the Scheme's investment statement and complete the member enrolment/application form. Employees who are auto enrolled or who opt-in will be enrolled by their employer, or if they choose, they can enrol themselves by completing a Scheme's member enrolment/application form. If an employee does not choose a specific KiwiSaver Scheme, they will be automatically enrolled with their employer's Preferred KiwiSaver Scheme. If an employer does not have a Preferred KiwiSaver Scheme, employees will be allocated to a Default KiwiSaver Fund by Inland Revenue. Individual's can enrol with AonSaver online
here, or by
calling our free phone 0800 266 463. How much do I put into my KiwiSaver Account? The minimum contribution for employees is 2% of their gross taxable salary/wage. This will be deducted by your employer each pay and paid direct to Inland Revenue, who in turn will pass this on to AonSaver for depositing into your account. Individuals can choose a contribution rate of either 2%, 4% or 8%. From 1 April 2013: The minimum employee deduction might increase from 2% to 3%. If you are self employed, or not working, the amount you contribute is negotiated direct with AonSaver. The minimum contribution is $200 per year. For members under 18, there is no minimum contribution amount until you start working.
How do the tax credits work? All KiwiSaver members over the age of 18 years will receive a member tax credit matching their contributions up to $10 per week or $521.43 per year. Therefore, if a member over the age of 18 years contributes and saves $1,042.86 each year, the government contribution will be 50c for every dollar contributed, up to $512.43 each year. The member tax credit will be paid to your AonSaver account once each year after 30 June. AonSaver will arrange for this credit to be paid to your account by Inland Revenue. backWhere are my savings invested? AonSaver provides a choice of 13 funds provided by four leading Fund Managers. Each of these funds will provide different returns as they are invested in different types of assets. Individual members are required to choose the funds in
which they want their savings invested. More information about the
funds is contained in the AonSaver Investment Statement. What are contribution holidays? After 12 months, any member can apply to suspend their
contributions to KiwiSaver by applying for a contributions
holiday. You must have been a member for 12 months before you can
apply. To apply for a contributions holiday, you need to complete
a KS10 form and hand this to your employer and send it to Inland
Revenue. How does the first home deposit subsidy work? Members who have been contributing at least 2% to a KiwiSaver scheme for at least three years may qualify for a first home deposit subsidy. If a member meets the criteria, they will be able to withdraw the contributions they, and their employers, have made to their KiwiSaver Account and qualify for a first home deposit subsidy from Housing new Zealand. The criteria includes:
When can I get my savings out? KiwiSaver funds are locked-in until a member reaches the qualifying age for New Zealand Superannuation (currently age 65), or for a minimum of five years if a member is over the age of sixty when they first join the scheme. There are limited circumstances in which a member can access their savings early, these include:
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