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Thread: Kiwisaver- Opt out?

  1. #1
    Join Date
    Jun 2009
    Location
    Manchester > Now Tauranga
    Posts
    4,393

    Default Kiwisaver- Opt out?

    I've been defaulted into the scheme and I think it looks good to me. Nothing special, but not a bad way to partially fund pension saving (in the uk I was saving 17 or 18%, so the c5% from the kiwi saver including my 2% will be jsut a start. But I don't like the way that can't opt out once I've opted in without changing job. Seems mental to me, even with the 5 year holiday option after 12 months.

    If I do pay in I'll also choose my own fund, but anyone have any strong views?

    As always, many any thanks to all those that have been through this ahead of me and are prepared to share experiences / knowledge.

    Duncan

  2. #2
    Join Date
    May 2008
    Location
    Nr Christchurch
    Posts
    46

    Default

    I stayed opted in as it seemed the easiest way to save for retirement with some government and employer contribution. Maybe a more financially astute person could find another investment vehicle that would do better, but that isn't me. I am also a volunteer budget advisor and I have had a client who wanted to get their funds plus employer contributions out of Kiwisaver (not the government contribution) and it is possible if you can prove significant financial hardship. There are also other circumstances like serious illness, moving overseas and buying your first home. You can also change contribution rates. You've probably seen this website, but it is helpful: http://www.kiwisaver.govt.nz/

  3. #3
    Join Date
    May 2009
    Posts
    431

    Default

    Quote Originally Posted by Duncan74 View Post
    But I don't like the way that can't opt out once I've opted in without changing job. Seems mental to me, even with the 5 year holiday option after 12 months.

    If I do pay in I'll also choose my own fund, but anyone have any strong views?

    Duncan

    Just a technical point, there isn't an opportunity for you to 'opt in', you will automatically go into Kiwisaver and have the provider randomly selected for you, unless you opt out.

  4. #4
    Join Date
    Jun 2009
    Location
    Manchester > Now Tauranga
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    4,393

    Default

    not sure that's right as if you fill in the form ks2 then you are opting in and you lose the right to opt out in the first 6 weeks. This was the issue i had today when payroll pressured me to sign the opt in form.

  5. #5
    Join Date
    Oct 2009
    Location
    Martinborough, Wairarapa
    Posts
    867

    Default

    Quote Originally Posted by Duncan74 View Post
    I've been defaulted into the scheme and I think it looks good to me. Nothing special, but not a bad way to partially fund pension saving (in the uk I was saving 17 or 18%, so the c5% from the kiwi saver including my 2% will be jsut a start. But I don't like the way that can't opt out once I've opted in without changing job. Seems mental to me, even with the 5 year holiday option after 12 months.

    If I do pay in I'll also choose my own fund, but anyone have any strong views?

    As always, many any thanks to all those that have been through this ahead of me and are prepared to share experiences / knowledge.

    Duncan
    Sorry, I've never used it. My only salaried job here was with the government and they had a separate scheme.

  6. #6
    Join Date
    Dec 2007
    Location
    Stanley Bay, Auckland, NZ
    Posts
    1,480

    Default

    Kiwisaver is a good idea - but I'm only putting in the minimum amount (2%). If you put in the 2% then you get your employer's 2% and taxpayer matching $20 per week. So as an investment vehicle it is good value as the value of your investments would have to fall by more than 50% for you to not be breaking even!

    Because of the lock in though I'm not going for any more than 2% - any spare money goes to paying off our mortgage quicker as that gives us more immediate financial certainty when it looks like interest rates may be heading up again soon (part of our mortgage is a revolving credit facility so we can pay in and draw down anytime we want - a great way of paying off your mortgage quickly!

    OH also has a kiwisaver account even though she doesn't work. You still get the $1,000 sign up bonus and we put in $20 a month to get the taxpayer matching amount. Our kids also have one but you don't get the taxpayer matching amount until you are 18 so we don't put anything in to the account - there is just the $1,000 kickstart in for them on a high risk investment strategy.

  7. #7
    Join Date
    Dec 2006
    Location
    Coromandel peninsula - ex UK
    Posts
    1,540

    Default

    Some employers automatically enrol employees to Kiwisaver, and others don't.

  8. #8
    Join Date
    May 2009
    Posts
    431

    Default

    Quote Originally Posted by Jo Jo View Post
    Some employers automatically enrol employees to Kiwisaver, and others don't.
    It is not optional if you do not fill in the forms to say otherwise, the employer should automatically enrol you. You can however opt out within eight weeks and have any deductions refunded:

    Automatic enrolment
    When you start a new job, if you're not already a member and are eligible, your employer will automatically enrol you in KiwiSaver.

    You'll be automatically enrolled in KiwiSaver if you're aged from 18 to 64 years, start a new job with a new employer and your job is:

    full-time
    permanent part-time
    a temporary contract for more than 28 days, or
    as a casual agricultural worker for more than 3 months.


    Exceptions to automatic enrolment
    You won't be automatically enrolled if you:

    are under 18 years old
    are a casual agricultural worker or election day worker
    are a private domestic worker and you pay your own PAYE
    are employed on a temporary employment contract of 28 days or less
    are a casual employee who receives holiday pay with your wages (in accordance with the Holidays Act 2003)
    are on paid parental leave or ACC
    stay on the same payroll when a business is taken over or amalgamated, or
    if you relocate with the same employer
    only receive schedular payments (formally withholding payments)
    aren't required to have PAYE deductions made from your salary and wages
    revert to an employer from whom you were seconded, straight after that secondment.
    http://www.kiwisaver.govt.nz/new/joi...to/auto-enrol/

  9. #9
    Join Date
    Feb 2010
    Location
    New Zealand
    Posts
    162

    Default

    As previously stated there is some "free" money going - the kickstart and matching contribution from the state each year and also employer contribution so it is worth putting in the minimum (2%) or enough to get the whole matching state contribution. Any further matching of contributions by employer in excess of that is probably better invested elsewhere so to avoid the lock-in.

  10. #10
    Join Date
    Oct 2009
    Location
    Auckland
    Posts
    617

    Default

    Just wondering if you picked your provider, or are going with a default provider? In my initial explorations, it appears ASB have a good reputation, and that ANZ are going through some turmoil (though that doesn't necessarily mean they should be avoided). I'm curious, too, about Huljich given their recent issues.

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