KiwiSaver is governed by a number of acts and regulations, with the principal act being the KiwiSaver Act 2006.
The Income Tax Act 2007 also has significant influence on KiwiSaver, with a Government ‘tax credit' subsidy to match eligible member contributions up to a capped level each year.
The KiwiSaver Act 2006 is the base legislation for the regulation of KiwiSaver schemes and is supplemented by certain administrative provisions of the Superannuation Schemes Act 1989. KiwiSaver schemes will be considered registered superannuation schemes for the purposes of investment in registered superannuation schemes.
The Taxation (KiwiSaver and Company Tax Rate Amendments) Act 2007 was passed in May 2007. Amongst other things, this Act clarified a number of issues in the KiwiSaver Act 2006, as well as introducing member tax credits and reducing the maximum rate of tax payable on income earned by PIE vehicles.
The Taxation (KiwiSaver) Act 2007 was passed in December 2007. Amongst other things, this Act introduces compulsory employer contributions with effect from 1 April 2008.
The Taxation (Urgent Matters and Annual Rates) Act 2008 was passed in December 2008. Amongst other things, effective 1 April 2009 this Act reduces and caps the KiwiSaver employer contribution at 2% and repeals the employer tax credit.
The Taxation (Annual Rates and Budget Measures) Act 2011 was passed in May 2011. Amongst other things, effective 1 April 2012 this Act removes the Employer Superannuation Contribution Tax (ESCT) exemption on employer contributions and makes it compulsory for all employers to deduct ESCT at the applicable progressive ESCT rate. The Act also reduces the rate at which the Member Tax Credit (MTC) is paid to 50c for each $1 contributed by members to the new maximum amount of $521.43 per year. The lower maximum and MTC rate will apply for MTCs paid for the year ended 30 June 2012 and later years.
Disclaimer: The KiwiSaver Design and Role of Employers summaries on this website are provided for general information purposes only. The legislation governing KiwiSaver and superannuation schemes is complex and contains additional detail and requirements not explained on these pages. Workplace Savings NZ does not accept any liability for reliance on this information.