Trans-Tasman retirement savings portability
The Trans-Tasman retirement savings portability arrangement is intended to help Australian and New Zealand citizens who emigrate between the two countries, with the intention of staying indefinitely or permanently, to take their retirement savings with them when they move across the Tasman.
The benefits of these new arrangements enable Australians and New Zealanders to:
- take their retirement savings with them when they move between the two countries
- allow Australians and New Zealanders to consolidate their retirement savings in their country of residence
- reduce the costs associated with the fees and charges applied on super accounts held in each country.
It is voluntary for members to transfer retirement savings between Australia and New Zealand. It is also voluntary for Australian super funds to receive Trans-Tasman transfers.
If an Australian super fund receives all the information required to act on the request to transfer a member's retirement savings to a KiwiSaver scheme, they must act upon that request.
Can any super fund accept these transfers?
No. Superannuation monies transferred from New Zealand can only be accepted by APRA-regulated super funds. Similarly, superannuation monies transferred to New Zealand from Australia can only be received by KiwiSaver schemes.
Transfers to Australia cannot be accepted by the following:
- unfunded public sector superannuation schemes
- defined benefit funds
- approved deposit funds.
Do APRA-regulated super funds have to accept the transfer payments from a KiwiSaver scheme?
No. If a person is migrating to Australia from New Zealand, you do not have to accept their request to transfer their super money from their KiwiSaver to their Australian super fund.
Do Australian super funds have to transfer amounts to a KiwiSaver scheme?
If a member has requested the whole amount of their withdrawal balance be transferred, and has provided you with the information required to act on their request, you must transfer this amount for them. If you are satisfied with this information and you have been provided with their KiwiSaver account details, you have 30 days in which to complete the transfer.
How much of a member’s super balance can be transferred?
Any transfers between Australian super funds and New Zealand KiwiSaver schemes must be the whole balance of the account – partial transfers are not allowed.
Amounts being transferred from New Zealand to Australia are treated as personal (non-concessional) contributions and are, as a result, subject to the non-concessional contributions cap. If the balance of the KiwiSaver account being transferred exceeds the contributions cap, the fund may not accept it.
How are the contributions to be treated by the Australian super fund?
Any contributions transferred from a New Zealand KiwiSaver scheme are to be treated by an Australian super fund as:
- member contributions for the purposes of the contributions standards in the SIS Regulations (no-TFN and fund-capped contributions cannot be accepted)
- not taxable contributions for the purposes of the fund's income tax except where the non-concessional contributions cap is exceeded
- 'Non-Assessable Foreign Fund Amount' for the purposes of reporting the contribution on the MCS (but with returning New Zealand-sourced and Australian-sourced amounts identified by the member or the KiwiSaver Scheme excluded and those amounts to be included at 'All contributions for current year').
Australian super funds will need to separately administer the New Zealand-sourced component so it remains separately identifiable from any Australian-sourced component.
Do Australian conditions of release apply to any New Zealand-sourced components of a member's account?
Yes, with some modifications. Any New Zealand-sourced components that are held in a complying super fund are subject to Australia's conditions of release – for example, terminal medical condition or permanent incapacity. Normally, the member must have reached the age of retirement as specified in the New Zealand Superannuation and Retirement Income Act 2001 (currently 65 years of age) to access any New Zealand-sourced component.
The member may access the Australian-sourced component of their account on meeting an Australian condition of release.
What administration is required for these transfers?
Any New Zealand-sourced components are to be administered in such a way that they are kept separately identifiable within the member's account in the Australian super fund.
You need to report any KiwiSaver contribution amounts you accept on behalf of a member on the current version of Member contributions statement (MCS) electronic specificationExternal Link Contributions transferred from a New Zealand KiwiSaver scheme are to be treated as personal (non-concessional) contributions and are, as a result, subject to the non-concessional contributions cap.
When transferring amounts to a KiwiSaver scheme from an Australian fund, what information is required?
The trustee of the Australian super fund must be satisfied that all of the following apply:
- the member has permanently emigrated to New Zealand, by providing
- a statutory declaration stating that they have permanently emigrated
- proof of residence at an address in New Zealand
- the member has opened a KiwiSaver scheme that will accept the payment and supplied the name and account number of their KiwiSaver scheme that the member has requested and consented to the transfer of the whole balance of their account to the New Zealand KiwiSaver scheme.
Once the APRA fund trustee has made the decision to release the member benefits to a New Zealand KiwiSaver scheme, the APRA fund completes the KiwiSaver scheme payment statement (NAT 74638).
The payment must be made to the KiwiSaver scheme no later than 30 days after the trustee receives all the information in relation to the transfer from the member. In addition, a statement to the KiwiSaver scheme must be made within seven days after that.
A copy of the statement must be forwarded to the member within 30 days of the payment.
Members can only transfer the whole balance of their account – partial transfers are not permissible.
When accepting amounts from a KiwiSaver scheme to an Australian fund, what information is required?
Under the Trans-Tasman Regulations, the trustee of the Australian super fund may request the following information from the KiwiSaver scheme or fund member before accepting the contributions from a KiwiSaver scheme in New Zealand:
- details of any Australian-sourced amount or returning New Zealand-sourced amount that forms part of the amount to be transferred
- details of any tax-free components of an Australian-sourced amount
- details of any Australian sourced amounts that were restricted or unrestricted non-preserved
- any information that a trustee of the Australian super fund requires to decide whether or not to accept the transfer of funds.
Where the amount being transferred is more than the non-concessional contributions cap, the Australian fund must ensure that none of the amount is received unless it contains Australian or returning NZ-sourced amounts which is not subject to the
non-concessional contributions cap.
How are operational costs within the Australian fund applied to the member's account?
Any reduction to the amount of the member's benefits within the Australian fund must first be deducted from the Australian-sourced component of the member's account. Operational costs could include fees and insurance.
If there are insufficient funds in the Australian-sourced component, the remainder may be deducted from the New Zealand-sourced component of the member's account.
Are Trans-Tasman transferred amounts to be preserved?
Yes. Any money received from a KiwiSaver scheme is to be treated as a preserved benefit in the same way as other amounts in the fund would be treated as preserved benefits.
Are New Zealand-sourced components subject to the same benefit accrual rules as Australian-sourced components of members' accounts?
Yes. It is appropriate to treat a New Zealand-sourced amount as being subject to the same contribution and benefit accrual standards as an Australian-sourced amount within a member's account.
Are there any age restrictions on members wanting to transfer funds between Australia and New Zealand?
No, there are no age restrictions – however, if a super benefit has commenced being paid as a pension to the member, then the balance of the account cannot be transferred as part of a Trans-Tasman portability arrangement.
What are the main legislative changes?
Table 4: Comparison of new and previous laws
Members of Australian super funds may transfer their super to a New Zealand KiwiSaver scheme.
There are no provisions to allow members of Australian super funds who emigrate to transfer their super benefits to a foreign super fund.
Members of KiwiSaver schemes may transfer their retirement savings to an Australian super fund.
Retirement savings from foreign super funds may be transferred into the Australian super system.
Contributions from KiwiSaver schemes are:
- member contributions
- non-concessional contributions that count towards the non-concessional contributions cap
- not taxed
- included in the contributions segment of the super interest.
Retirement savings transferred from foreign super funds are:
- member contributions
- non-concessional contributions that count towards the non-concessional contributions tax
- may be taxable in certain circumstances.
Benefits transferred to a KiwiSaver scheme are not taxed on their exit from the Australian super system.
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 provider and to the member.
What reporting and forms have been amended or introduced?
The following forms and instructions have been amended to facilitate reporting of transfers to and from KiwiSaver accounts:
- Member contributions statement
- Rollover benefits statement.
A new KiwiSaver scheme payment statement was introduced on 1 July 2013.
What happens if a member does not yet have a fixed address in New Zealand when they complete the form?
Members must provide to you proof of residence in New Zealand following their emigration to New Zealand.
Can you customise the KiwiSaver scheme payment statement?
If you decide to reproduce our KiwiSaver scheme payment statement, you only need one signature from an authorised officer of your fund. One signature block will be sufficient in the approved form.
How can you confirm your member's residency before transferring their super?
You can ask your member to provide a statutory declaration to prove they have permanently emigrated to New Zealand.
Can your member use a New Zealand statutory declaration?
Yes, this is acceptable.