Frequently Asked Questions

What are my responsibilities in relation to KiwiSaver?
From 1 July 2007 all employers are required to:

• Assess the eligibility of new employees for enrolment in KiwiSaver
• Distribute copies of the Inland Revenue Employee Guide (KS3) to all new employees, and any employee wanting to opt-in
• Distribute copies of the Investment Statement (if you have a preferred Provider)
• Enrol new employees within 7 days of commencing their new job
• Enrol existing employees wanting to opt-in
• Start deducting KiwiSaver contributions from an employee’s first pay
• Process any opt-out notices

Where can I get more Employee Packs from?
The employee packs are supplied by Inland Revenue. You can download them from the IRD website at www.ird.govt.nz/kiwisaver or at www.kiwisaver.govt.nz. You can also call Inland Revenue on 0800 257 777.

Which employees qualify for KiwiSaver?
Any employee who meets the following criteria can be enrolled into KiwiSaver by their employer:

• Aged between 18 and 65 years
• NZ or Australian citizen or resident, or holding a NZ permanent residency permit
• Employed for more than 28 days, whether part-time or full-time
• Have PAYE deducted from their salary/wage
  Employees under the age of 18 must contract directly with PSBG KiwiSaver.
  Seasonal agricultural and domestic workers can opt-in but are not subject to automatic enrolment rules.

How much do I deduct from salary/wages?
Employees are required to nominate a contribution rate of either 2%, 4% or 8% of their gross taxable income. If an employee does not make a choice, you are required to make deductions at 2%.
Deductions are made on their gross taxable income:
Wages + Overtime + Taxable Allowances = Gross Taxable Income 2% x 4% or 8%
You record the KiwiSaver deduction on the IR348 Employer Monthly PAYE Schedule, or on the IR File if you file your PAYE Schedule electronically.

Do I deduct contributions from Redundancy payments?
Yes.

Where are employee and employer contributions paid?
Both employer and employee contributions are paid to Inland Revenue with your PAYE payments. A new EMS (Employer Monthly Schedule) has been created that will have two extra columns - one for employee contributions and one for employer contributions. Inland Revenue will pay the contributions to the member’s KiwiSaver Provider using their IRD number as the unique account identifier.

When do I have to start making contributions?
From 1 April 2009 employers will be required to make a 2% contribution to all KiwiSaver accounts belonging to staff who have joined KiwiSaver. There is no contribution payable for employees who are not KiwiSaver members.

What records do I need to keep?
We recommend you have a documented procedure to show that you distributed KS3 packs to all new employees, and existing employees who indicate they want to opt-in to KiwiSaver.
We also recommend you date stamp and keep copies of the following information.

• Opt-in requests received from employees
• Opt-out notices received from employees
• Contribution holiday notices provided to employers by Inland Revenue
  Records need to be kept for 7 years.
  

How do employees choose a KiwiSaver scheme?
It is up to individual employees to identify their own provider. They can find out who the KiwiSaver Scheme Providers are by logging on to the official KiwiSaver website at www.kiwisaver.govt.nz.
If employees do not choose a specific scheme, they will be allocated to the Employer’s Preferred Provider. If the Employer does not have a Preferred Provider, each individual enrolled member will be allocated to a Default Provider. Not all employees will be allocated to the same Default Provider.

Can I select a Preferred Provider without being liable for Investment performance?
Yes.
Merely passing on information about KiwiSaver to employees, or choosing a KiwiSaver scheme for their employees who do not choose their own scheme, will not make an employer liable as a promoter or investment provider under the investment advisers and securities legislation.
This explanation also appears in the KiwiSaver Questions and Answers dated 18 September 2006 on the Treasury website at www.treasury.govt.nz/kiwisaver.
Employers should not provide any advice on which investment option may be appropriate for individual KiwiSaver members. For advice on investment options KiwiSaver members should be referred to www.sorted.org.nz.

 

Should I select a Preferred Provider?
Yes.
A Preferred Provider will assist with any questions you or your staff have. It will mean you can direct all queries to one place for support, rather than dealing with just Inland Revenue and multiple Default Providers.
If you select PSBG KiwiSaver, you and your employees will get the benefits of:

• A PSBG KiwiSaver helpdesk
• Enrolment from the PSBG KiwiSaver website
• An Employers handbook guide
• Supplies of an easy to follow Investment Statement
  All this will be provided at no cost to you as an Employer.

Why should I pick PSBG KiwiSaver as my Preferred Provider?
PSBG KiwiSaver offers a range of benefits and attractive features to both employers and individuals, namely:

• A single point of contact for employers and individuals
• Competitive fees
• Online member account access, 24/7

If I select a Preferred Provider, can employees still choose their own KiwiSaver Provider?
Yes.
Even if you enrol employees with your Preferred Provider, they can still select their own KiwiSaver Scheme. Any member of KiwiSaver can change their KiwiSaver Provider every three months.
PSBG KiwiSaver does not charge any fee to individual members for changing schemes.

What does PSBG KiwiSaver cost?
There is no cost to employers. All fees are charged direct to member accounts.
An administration charge of up to $50 per year will be debited to each member account. 

How can you help my staff understand more about KiwiSaver?
Our website at www.psbg.co.nz also has information and calculators that may assist.