Trans-Tasman retirement savings portability
What is the policy intent?
This scheme will help Australians who relocate to New Zealand and New Zealanders who relocate to Australia to consolidate their retirement savings in their country of residence and avoid paying fees and charges on accounts in two countries.
It is intended to remove a barrier to labour mobility between the two countries.
Although not a Super Reform measure, this scheme has links to a number of reform measures and is a change that APRA funds may need to consider.
Participation in the scheme is voluntary for both members and funds, and is scheduled to commence on 1 July 2013. Royal assent for the legislation was received on 10 December 2012.
Retirement savings once transferred will generally be subject to the rules in the host country.
What are the main legislative changes?
The regulations are currently being drafted.
New law
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Current law
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Members of Australian super funds may transfer their super to a New Zealand KiwiSaver scheme.
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There are no provisions to allow members of Australian super funds who emigrate to transfer their super benefits to a foreign super fund.
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Members of KiwiSaver schemes may transfer their retirement savings to an Australian super fund.
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Retirement savings from foreign super funds may be transferred into the Australian super system.
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Contributions from KiwiSaver schemes are:
- personal contributions
- non-concessional contributions that count towards the non-concessional contributions cap
- not taxed and
- included in the contributions segment of the super interest.
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Retirement savings transferred from foreign super funds are
- personal contributions
- non-concessional contributions that count towards the non-concessional contributions tax
- may be taxable in certain circumstances
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Benefits transferred to a KiwiSaver scheme are not taxed on their exit from the Australian super system.
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No equivalent
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When benefits are transferred to a KiwiSaver scheme, the transferring trustee of the Australian fund must provide a statement in respect of the benefits to the KiwiSaver scheme provide and to the member.
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No equivalent
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How will it work?
Individuals will be able to transfer their retirement savings between a New Zealand KiwiSaver account and an APRA-regulated fund (other than a defined benefit fund).
Moving permanently from Australia to New Zealand
Individuals who receive super guarantee contributions or make contributions to an APRA-regulated fund in Australia that participates in this scheme, who then move permanently to New Zealand, will be able to transfer their super (in whole or part) to a KiwiSaver account with a New Zealand fund.
It will also be possible to transfer lump sum payments from an Australian SMSF to a KiwiSaver account.
Moving permanently from New Zealand to Australia
Individuals moving permanently from New Zealand to Australia will be able to transfer their super from a KiwiSaver account to a participating APRA fund. The amount transferred will be treated as non-concessional contributions and will be subject to the non-concessional contribution caps. Transfers in excess of the caps will be subject to the Excess Contributions Tax (ECT).
Where an amount is transferred from a KiwiSaver account to an APRA fund, it must remain in the fund until the member reaches age 65 and be identifiable as being a transfer from a KiwiSaver account. These amounts must be identified separately on the MCS.
In addition, these amounts can only subsequently be rolled over to another participating APRA fund and must be identified separately on the Rollover Benefit Statement (RBS).
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You cannot transfer monies from a KiwiSaver into an SMSF.
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Reporting and forms
The following forms are being amended to facilitate reporting of transfers to and from KiwiSaver accounts:
- Member contribution statement
- Rollover benefit statement
- SMSF annual return
- A new transfer form is also being developed for use by funds.
What isn't decided?
The following details are still being considered:
- application of the data standard to these transfers
- whether transfers from KiwiSaver accounts need to be reported separately on member statements
- whether partial rollover from one APRA fund to another APRA fund is permitted
- whether partial transfer of retirement savings from KiwiSaver account to a participating APRA fund is permitted
- Whether MySuper accounts must accept KiwiSaver accounts.
Last Modified: Friday, 5 April 2013