Spending time in Australia on a working holiday has been part of the Kiwi way of life for many years. The trouble is that since 1992, when it became compulsory in Australia to contribute to a superannuation scheme, locked-in funds have had to be left behind when it’s time to come home.
From 1 July, 2013 however, it will be possible to transfer money between Australian complying superannuation schemes and KiwiSaver. Transfers in both directions will be allowed, with a few conditions.
It will be voluntary for scheme providers to accept transfers, so check with your KiwiSaver provider if you want to bring funds back.
Until now, Kiwis moving to Australia permanently have been able to cash up their KiwiSaver, however funds will now need to be transferred. Funds transferred into KiwiSaver from an Australian scheme will still be subject to slightly different rules than other KiwiSaver funds. Transferred funds will be locked in until retirement at a minimum age of 60.
Australian funds transferred won’t be available for a first home withdrawal, and will not count towards contributions required for the Government tax credit. If you permanently emigrate to a third country, transferred Australian funds will not be able to be taken to that country.
Despite these slightly different rules, transferring funds from Australia has advantages. You may have several Australian Superannuation accounts and it may be possible to consolidate them all into one KiwiSaver scheme making it easier to keep track of your savings and plan for the future.
You may also be able to save on administration fees by consolidating funds. Converting your savings to New Zealand dollars means you won’t be affected by changes in the exchange rate over time.
Contact your financial adviser to find out more about how to bring your Australian superannuation funds home.