If you’re an employee, there are a number of things you should know about KiwiSaver including how it works, the benefits KiwiSaver offers and whether it’s right for you.

How KiwiSaver works

If you’re aged between 18 and 65 you’ll be automatically enrolled in KiwiSaver when you start a new job* (unless your employer has a similar scheme approved by the Government Actuary).  You then have from the end of week two through to the end of week eight to decide if you wish to remain in KiwiSaver or opt-out.

Existing employees have not enrolled automatically but can join KiwiSaver.  If you’re an existing employee and want to join, simply let your employer know you want to opt-in or contact your chosen KiwiSaver scheme provider. It’s important to remember that if you choose to opt into KiwiSaver, you can’t opt out.

You can choose to contribute either 3%, 4%, 6%, 8% or 10% of your gross (before tax) salary or wages to KiwiSaver. These contributions are then taken from your net (after tax) salary or wages and put into your KiwiSaver account. After contributing regularly from your salary or wages for 12 months, you can apply for a temporary break from saving (a ‘contributions holiday’). 

You’ll receive an Investment Statement as part of the enrolment process containing important information about KiwiSaver which you need to read and understand.  Once you become a KiwiSaver member, your KiwiSaver provider will send you updates on how your savings are progressing.  You can also visit your scheme providers website and www.kiwisaver.govt.nz for easy online access to information on your KiwiSaver account.

Savings are locked-in to KiwiSaver until you reach the age of eligibility for New Zealand Superannuation (currently 65), or for five years for people who join after age 60. There are exceptions to this, for example significant financial hardship, first home purchase, serious illness, death, or permanent emigration. (Conditions apply.) KiwiSaver offers a number of features and benefits to encourage you to save for retirement, click here to find out more.  You may also want to use the Quick KiwiSaver calculator on the Sorted website to work out how much you may be able to save for your retirement with KiwiSaver.

If you’d like to know more about how KiwiSaver works you can check out www.kiwisaver.govt.nz.

*Exceptions from KiwiSaver automatic enrolment criteria include: casual and temporary employees employed under a contract of service for 28 continuous days or less, election day workers, private domestic workers, casual agricultural workers employed for less than three months, people who hold temporary visitor or student permits, and employees that remain on the same payroll when a business is taken over or amalgamated, or if they’re relocated with the same employer. For more information visit www.kiwisaver.govt.nz.

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