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Thread: Kiwisaver- Opt out?

  1. #11
    Join Date
    Jun 2009
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    Manchester > Now Tauranga
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    4,392

    Default

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    Well I've not had chance to choose one, but you get 3 months where the IRD just stack up your cash and then they write to you to say who your default will be or you say who you want it to be. I'll definately put it into a much higher risk pot than the defaults as there's not a lot to lose for now. My min UK funds are in medium risk funds as well as I've 30 odd years to go before I retire, and I fully expect not to make it that far anyway

  2. #12
    Join Date
    Apr 2008
    Location
    UK to Roto-Vegas
    Posts
    279

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    I'm with Gareth Morgan Kiwisaver, when kiwisaver started it was ranked as the best scheme to be invested in. Can't remember why but a financially savvy expat friend said he was choosing that scheme and that was good enough for me!

  3. #13
    Join Date
    Apr 2008
    Location
    UK to Roto-Vegas
    Posts
    279

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    And Casey isn't in Kiwisaver. Funnily it takes the IRD 6 weeks to refund any kiwisaver payments made, despite opting out before starting work and continually telling your payroll you don't want to be in it.

  4. #14
    Join Date
    Oct 2006
    Location
    Petone, Wellington
    Posts
    494

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    Part of the reason for the delay in refunding Kiwisaver contributions is that members who are automatically enrolled for the first time after starting employment with a new company must be members for 2 weeks, you cannot withdraw from the scheme before this time and you must join.

    After 2 weeks auto-enrolled employees can then choose to opt out by giving their employer a completed KS10 opt-out form. Their employer can then stop deductions and send this form when they file the IRD employer monthly schedule which is either the following 5th or 20th of the month. Once IRD receive this form they usually process the refund within 30 days.

    Shawn

  5. #15
    Join Date
    Feb 2010
    Posts
    75

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    Not joining means that you are effectively throwing away a payrise from your employer. I deal with company pensions in the Uk and it makes me made the number of employees who miss out on money from their employer. The only people who benefit from you not joining is the Finance Director who benefits from lower employment costs.

    Join. If this will only represent a small amount of your retirement pot then do something risky with it like invest in UK equities No seriously twenty years left then invest in equities and take a few risks - not that I am giving you advice

  6. #16

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    Kiwisaver is a no brainer, everyones going to retire and the government/employer is co-contributing. My advice would be to make the minimum contributions to get the maximum output from your employeer and the government. Then add any additional funds into a private scheme which you can cash up if you needed to much easier.

    In regards to Kiwisavers funds, speak to a financial advisor. I recommend Fidelity Lifes Options funds which is number 1 by a long way. http://www.morningstar.net.nz/files/...rvey100510.pdf is the latest review of all the funds.

  7. #17
    Join Date
    Sep 2008
    Location
    Wellington
    Posts
    386

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    I was on a work permit and advised I will not qualify for Kiwisaver although it was sold to me that I was going to get it at the time of hiring.

  8. #18
    Join Date
    Jan 2007
    Location
    Chch, NZ
    Posts
    1,940

    Default Upon Retirement

    Hrm. and no one has thought about the high administration costs these Kiwisaver managed funds charge per year? and why is it fair that they still charge the administration fee for years when they UNDERPERFORM any particular index? Even worse in years where they lose heaps in portfolio value?

    Kiwisaver is not a no-brainer. Has anyone worked out how much their 2-4% contributions would end up being in 20 or 30 years time? No one questioned how much is this $1000 sign up bribe the NZ gov't has would be worth for seniors in 5 - 10 years time? Compounding interest only works with a decent amount of principal. That's why places like the UK and Canada allow massive 18% (of their taxable income) for contributions because it can't work otherwise.

    If a person wants superannuation, they're best to do it themselves. If they're not savy enough to learn about finances, perhaps they shouldn't be thinking about finances at all. Like the saying goes, if you don't want to get burned, don't touch it.

    BTW, Canada's TFSA (tax free savings account) allocates $5000/year per individual which based on a person earning $100,000/year is 5% of their income (not many earn $100k/year but this is an excessive example). How can such a scheme like this benefit more to Canadians then what Kiwisaver could offer (with the pidly 2-4% ? ). FYI, TFSA is on top of the superannuation RRSP.

  9. #19

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    Super BQ, it is a no brainer, if your going to be saving and want some extra free money then you take it. If you choose a good fund (Like Fidelitys Options) then you will see benefits.

    Lets remember we have just had a recession as well.

    You get $1000 for nothing from the government and your employeer co-contributes.
    Its rubbish compared to many other countries and I agree will not pay for your retirement if you put in the minimum, but this isnt another country so looking at what you get overseas is not going to do you any good.

    The fact its locked in and your flexability is low is problematic and I would always advocate that you should have your own private scheme to compliment it.

    But if you want something for nothing then you should take it.

    Tim

  10. #20
    Join Date
    Jan 2007
    Location
    Chch, NZ
    Posts
    1,940

    Default Where does Kiwisaver $ go?

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    /quote but this isnt another country so looking at what you get overseas is not going to do you any good. /quote

    It does when a considerable portion of the managed fund gets invested overseas.

    Recession or not, fund performance should be based on the stock marketing index performance. This isn't NZ highschool where students can get individual merit (satisfactory/unsatisfactory , excellence achievement or not). % returns is all that matters.

    Someone figure out the return on $1000 on 10, 20, or 30 years time less administration costs? IMO the $1000 freebee is a bribe and funds those administrators.

    Remember, very FEW managed funds overseas can 'consistently' make the claim of beating the index (less management fees) for 10 or 30 years. Why would NZ based funds be any different?

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