Existing Superannuation Schemes

Existing Superannuation Schemes

  • An existing registered superannuation scheme can continue as before, but most employers (other than exempt employers) will be required to enrol all new employees automatically into KiwiSaver, and all employers will have to allow permanent employees to opt in to KiwiSaver.
  • An existing scheme can also convert to a "KiwiSaver" scheme (by meeting all KiwiSaver scheme rules) with the consent of all members and on application to the Government Actuary. Members will then be KiwiSaver members and will be subject to the same lock-in requirements and will be entitled to the taxpayer-provided subsidies.
  • Initially an existing scheme could establish a KiwiSaver scheme section within the existing scheme called a "bolt-on". Members then choose whether to join the KiwiSaver section or not, with any contributions or transfers to that section subject to the lock-in requirements and entitlement to the Government subsidies.  The ability to bolt-on a KiwiSaver scheme section was removed in 2011.  Bolt-on KiwiSaver schemes are treated as separate legal entities to the existing scheme for most purposes.
  • Employees of an exempt employer will still be able to join a KiwiSaver scheme by opting in.
  • Members continuing to contribute to an exempt employer's scheme for at least three years after 1 July 2007 will be eligible for first home deposit assistance as the rules are currently stated, as will contributors to KiwiSaver schemes.
  • Initially an exemption from ESCT was available for existing schemes that became complying funds to the same level as a KiwiSaver scheme.  Effective from 1 April 2012 the ESCT exemption was removed, and it became compulsory for all employers to deduct ESCT at the individual KiwiSaver members applicable progressive ESCT rates. 
  • Members of an existing scheme can continue in that scheme and also enrol in a KiwiSaver scheme.  They will need to meet the 3% minimum contribution threshold for KiwiSaver, irrespective of any contributions to their existing scheme, and would be entitled to receive the various tax incentives offered to KiwiSaver scheme members.  The government signaled in its May 2011 Budget that if a National Party led government remains in power after the 2011 election,  then the minimum regular contribution for members would increase to 3% of gross wage or salary. This was ratified and took effect from 1 April 2013.