KiwiSaver changes - 2019.
There have recently been some changes to all KiwiSaver schemes that we wanted to tell you about.
The changes are to benefit KiwiSaver members by:
- Giving members a wider range of contribution rates to choose from.
- Allowing more people to join KiwiSaver, as those aged 65 or older will now be able to join.
- Making it clearer that stopping contributions to your KiwiSaver has a negative impact on retirement savings, by changing the name 'contributions holiday' to 'savings suspension'.
Changes from 1 April 2019
- Two new contribution rates are added. KiwiSaver members can now contribute 6% or 10% of their before-tax pay via their employer. Contribution rates are now 3%, 4%, 6%, 8% or 10%.
- The term 'member tax credit' or 'MTC' will be renamed to 'Government Contribution'.
- The name 'contributions holiday' will be changed to 'savings suspension'. The maximum time period for a savings suspension is being shortened from five years to one year.
Changes from 1 July 2019
- Anyone over age 65 can now join KiwiSaver.
- For members aged between 60-65 who join KiwiSaver for the first time will not have a lock-in period of five years. This has been removed so they will be able to withdraw their savings regardless of how long they have been a member after age 65. From age 65 the member will not be eligible for the government contribution and their employer can stop their contribution.
Changes from 1 April 2020
- Members who are 60 or over and joined a KiwiSaver scheme for the first time before 1 July 2019 will have the option to opt out of the five-year membership lock-in period. If a member opts out, they will not receive Government contributions and their employer can stop their contributions at age 65.
I am a KiwiSaver member. Do I need to do anything?
No, you don't need to do anything. These changes have been put in place to give you more options. If you would like to change your contribution rate, you can do so by completing the KS2 form and giving it to your employer.
If you have any questions about your KiwiSaver please get in touch with us.
From the team at Polson Higgs Wealth Management