- How the Trans-Tasman Portability Scheme is supposed to work
- Moving super from NZ is blocked by Aussie super funds, except for WA Super, FIRST Super and Energy Super
- Well done to WA Super, FIRST Super, and Energy Super, and tut-tut to the rest
- How do the trans-Tasman super portability rules work?
- Key features of the trans-Tasman portability laws
- Special rules applicable to New Zealand or Australia
- Comparison table of key features of current law and old law
- Australian super funds accepting KiwiSaver accounts
Nearly 5 years after the super rules changed, opening the door to super transfers between New Zealand and Australia, only 3 Australian super funds are accepting transfers FROM KiwiSaver accounts to Australian super accounts. Many more Aussie super funds however permit transfers of Australian superannuation savings TO New Zealand KiwiSaver schemes.
I consider this state of affairs a poor reflection on the superannuation industry, and an injustice for New Zealanders permanently relocating to Australia, or Australians returning home from NZ. No public list is available from the industry, or from the super regulators (APRA or ATO) to indicate which super funds are planning to accept KiwiSaver account transfers (nor does a list exist of those super funds permitting transfer of Australian super savings to a KiwiSaver account).
After checking the websites of more than 30 large super funds, only 3 super funds currently accept transfers of KiwiSaver accounts, or more precisely, discloses the fact that it accepts transfers from KiwiSaver accounts. The super funds are WA Super, FIRST Super and Energy Super.
Let’s hope that many more super funds follow WA Super, FIRST Super and Energy Super, in accepting transfers of KiwiSaver accounts and that this information is published on super fund websites. In the meantime, to the best of our knowledge, WA Super, FIRST Super (which is different to First State Super) and Energy Super, are the only Australian super funds offering this service.
Important: If any of our readers, including industry readers, become aware of other Aussie super funds accepting transfers FROM KiwiSaver accounts, please contact SuperGuide by sending us a comment on this article, or emailing us at firstname.lastname@example.org and we will update our list of three.
Note: In the comments section of this article and in direct emails, some readers have suggested certain other super funds accept KiwiSaver accounts, but at the time of writing, the super funds mentioned did not accept such accounts, although those super funds do allow Australian super savings to be transferred TO KiwiSaver accounts, as do many other super funds.
In short, the Trans-Tasman Portability Scheme has been a fizzer for Australians returning to Australia from New Zealand, and New Zealanders relocating to Australia and wanting to transfer NZ retirement savings to Australia.
For your reference: We have checked the websites, and compliance statements of 30 large super funds, and some of the large funds that do NOT accept KiwiSaver include AustralianSuper, HESTA, CareSuper, Cbus, REST, Hostplus, UniSuper, QSuper, First State Super, Telstra, VicSuper, Vision Super, Childcare Super, MLC, CBA and AMP, to name a few. Please notify SuperGuide if any of these super funds starting receiving KiwiSaver accounts, and we will update this article.
The reason for Australian super funds being so slow in offering this service, is mainly due to the fact that it is not compulsory for Australian super funds to accept KiwiSaver accounts, and the size of the KiwSaver accounts are relatively small. Conversely, most Australian super funds are allowing those fund members who are relocating to New Zealand, to transfer Australian super monies to KiwiSaver accounts in New Zealand, if the fund member so wishes.
How the Trans-Tasman Portability Scheme is supposed to work
Since 1 July 2013, it is legally possible for Aussies (and returning New Zealanders) to transfer Australian superannuation benefits TO KiwiSaver schemes, and for New Zealanders to transfer super FROM KiwiSaver accounts to an APRA-regulated super fund (that is, all types of Australian super funds except for a self-managed super fund).
The law change allowing super mobility between Australia and New Zealand is good news for those Australians who have moved permanently to New Zealand, or for Kiwis who have returned to NZ. On the face of it, the law change should also be good news for New Zealanders who have settled permanently in Australia, and who want to transfer KiwiSaver accounts to Australian super funds, although finding an Australian super fund willing to accept KiwiSaver accounts continues to be problematic.
Note: A KiwiSaver scheme is the New Zealand equivalent of an Australian super fund. A self-managed super fund (SMSF) is a super fund that is set up by individuals (up to 4 people) rather than run by a financial organisation.
Moving super from NZ is blocked by Aussie super funds, except for WA Super, FIRST Super and Energy Super
Unfortunately, just because something is legally possible does not always mean that you can actually make such a transfer happen. Although APRA-regulated superannuation funds accept a legitimate request to transfer Australian super savings TO a KiwiSaver account, there is no compulsion for Australian super funds to receive super FROM a KiwiSaver account.
For Kiwis settled in Australia and hoping to transfer retirement savings into an Australian super fund, the news gets even worse. Nearly 5 years after trans-Tasman superannuation portability became possible, we have only found 3 Australian super fund accepting KiwiSaver transfers. As at publication date, just 3 super funds make the list of Australian super funds accepting KiwiSaver accounts, and the contact details of WA Super, FIRST Super (which is different to First State Super) and Energy Super, are set out at the end of the article.
The first Australian super fund to accept KiwiSaver accounts was WA Super, which started accepting transfers from 23 October 2014.
Note: For the transfer to comply with the Trans-Tasman Portability Scheme (as this ability to move super between Australian and NZ is known), an individual must transfer the FULL amount from the KiwiSaver account.
Well done to WA Super, FIRST Super, and Energy Super, and tut-tut to the rest
From a marketing perspective, the early-adopter decision by WA Super to accept KiwiSaver accounts is an absolute winner. For the other Australian super funds, who believe offering this service is not a priority, I believe this will eventually be a branding and marketing folly for those Australian super funds.
Keep in mind that around 50,000 new New Zealanders arrive in Australia each year, which can amount to a lot of funds under management for Australian super funds. Extrapolating these figures over the past decades and into the future, the increased portability could benefit potentially hundreds of thousands of people, and potentially mean new members for responsive funds. True, many KiwiSaver accountants are small, but retaining members is as important, if not more important, as attracting new members, to Australian super funds.
For example, let’s look at Hugh, a New Zealander now living permanently in Australia with a decent-sized super account in an Australian super fund. Hugh is pretty happy with the Australian super fund that he belongs to, and he thinks he might follow the advice of his super fund and consolidate his super into one account. He approaches his Australian super fund about the prospect of transferring his KiwiSaver account, and the Aussie super fund’s response is: they won’t do it. Note that the answer is not that they can’t do it, but they choose not to do it. Does that mean that the Australian super fund doesn’t care about Hugh, or his retirement plans? Or perhaps the message encouraging members to combine super accounts is just an empty slogan by Australian super funds.
We have a situation where existing fund members, hoping to consolidate super accounts, are knocked back because Australian super funds choose not to, or haven’t got around to, accepting KiwiSaver accounts (after 5 years). A possible reaction to this response would be to change to a super fund that does accept KiwiSaver accounts, but herein lies the dilemma. We have just three Australian super funds accepting KiwiSaver accounts (and SuperGuide will update this list when we learn of others, or when readers discover other super funds offering this service).
Nearly 5 years have passed since the introduction of the new rules, and I personally think not offering KiwiSaver transfers after this time period is slack and a missed marketing opportunity. If individuals are keen to move their super savings between countries then they are clearly engaged fund members who are likely to be contributing further, and taking an interest in their super.
Note: In 2013, ASFA, the super industry association, stated that Australian super funds may not accept KiwiSaver transfers until mid-2014, due to the already heavy IT workload experienced by super funds as a result of other super reforms. At the time of writing, April 2018, we remain in hope that more than 2 Australian super funds currently accepting KiwiSaver accounts will soon be joined by many others.
Invitation to Australian super funds: We receive emails every week from New Zealanders living in Australia wanting to transfer KiwiSaver accounts to Australia. If any super fund makes the decision to accept transfers from KiwiSaver accounts, or does so in the future, I will list the super fund’s details on the SuperGuide website – for free.
How do the trans-Tasman super portability rules work?
I have received a steady flow of emails from intrepid readers asking:
- Can New Zealand super benefits be transferred into Australian super funds? Yes, but only 3 super funds accept KiwSaver accounts
- Can Australian super benefits be transferred into NZ KiwiSaver accounts? Yes, in all cases, assuming the transfers fit within the Trans-Tasman Portability rules.
We quote from the WA Super website, explaining some of the restrictions placed on KiwiSacer money deposited into an Australian super account:
Important considerations before you transfer
There are rules that apply to money transferred from a KiwiSaver scheme, and they include:
- You cannot purchase property in Australia with funds received from a KiwiSaver scheme unless you have attained the age of 65.
- Money can only be transferred to and held in a complying super fund regulated by the Australian Prudential Regulation Authority (APRA).
- You cannot roll your KiwiSaver Component to another super fund in Australia unless they are a super fund who can also receive KiwiSaver transfers directly. This is because it is not compulsory for a super fund to accept KiwiSaver transfers.
- You cannot roll your KiwiSaver Component to a Self-Managed Super Fund (SMSF) or to another country.
- The KiwiSaver component cannot be accessed until you reach the New Zealand retirement age (currently age 65).
- Any amounts transferred count towards your non-concessional (after tax) contribution cap.
- If you are age 65 or over you must meet the work test (that is, you have worked 40 hours or more in any consecutive 30 day period during current financial year) before WA Super can receive KiwiSaver funds from New Zealand.
- Should you permanently return to New Zealand the option to transfer the funds back to New Zealand is also available.
Source: WA Super (www.wasuper.com.au)
Important: The new rules do not mean that you can access your super benefits when you move to New Zealand, or move to Australia. Accessing retirement savings is still subject to the current rules, such as retiring and reaching a certain age, or suffering severe financial hardship.
Key features of the trans-Tasman portability laws
Key features of the portability measures are:
- You can transfer retirement savings between an Australian complying superannuation fund (regulated by APRA) and a New Zealand KiwiSaver scheme, and vice versa.
- A super fund or KiwiSaver scheme does not have to offer you this option.
- You do not have to transfer your super benefits when you move countries but you have the option.
- Any transfers conducted will be subject to minimal compliance and administration costs.
- Amounts transferred from a KiwiSaver scheme to an Australian super fund are not taxed on entry. They are treated as non-concessional contributions, and are subject to the non-concessional cap.
- Amounts transferred from an Australian super fund to a KiwiSaver scheme are not taxed when leaving Australia.
- Your retirement savings will be subject to the super rules of the host country, although there are exceptions (see next section).
Background: In July 2009, the Australian Treasurer and the NZ Minister of Finance signed an arrangement between the Governments of Australia and New Zealand on the portability of retirement savings between the two countries, According to the Explanatory Memorandum for the draft legislation, the arrangement: “establishes a scheme to enable Australians and New Zealanders to transfer their retirement savings when they move between Australia and New Zealand, while preserving the integrity of the retirement savings systems of both countries.”. In September 2012, the Australian government released draft legislation, and on 10 December 2012, the Australian parliament passed the ‘Superannuation Legislation Amendment (New Zealand Arrangement) Act 2012’, taking effect from 1 July 2013.
Special rules applicable to New Zealand or Australia
The following special rules apply to Australian-sourced retirement savings held in KiwiSaver schemes:
- cannot be used to purchase a first home (unlike other KiwiSaver savings)
- can only be accessed from age 60 provided you satisfy the Australian definition of retirement
- cannot be transferred to a third country.
The following special rules apply to New Zealand-sourced retirement savings held in Australian super funds:
- can only be transferred to complying super funds regulated by APRA (which precludes SMSFs)
- cannot be transferred to a third country
- may be accessed when the member reaches the Age of retirement in New Zealand (currently age 65).
Comparison table of key features of current law and old law
|Current law||Old law|
|Members of Australian superannuation funds may transfer their superannuation benefits to a New Zealand KiwiSaver scheme.||There are no provisions to allow members of Australian superannuation funds who emigrate, to transfer their superannuation benefits to a foreign superannuation fund.|
|Members of KiwiSaver schemes may transfer their retirement savings to an Australian superannuation fund.||Retirement savings from foreign superannuation funds may be transferred into the Australian superannuation system.|
|Contributions from KiwiSaver schemes are:
||Retirement savings transferred from foreign superannuation funds are:
|Benefits transferred to a New Zealand KiwiSaver scheme are not taxed on their exit.||No equivalent|
|When benefits are transferred to a KiwiSaver scheme, the transferring trustee of the Australian fund must provide a statement in respect of the benefits to the KiwiSaver scheme provider and to the member.||No equivalent|
Table source: Explanatory Memorandum, Superannuation Legislation Amendment (New Zealand Arrangement) Act 2012: Portability of Superannuation between Australia and New Zealand. Table heading has been changed from original.
For more information on the rules applying to transfers between Australian super funds and KiwiSaver accounts, click ATO super trans-tasman to access the special section on this topic on the ATO website
Australian super funds accepting KiwiSaver accounts
|Fund name||Telephone||Fund website|
|WA Super||1300 99 85 42 (or 08 9480 3500 when calling from Perth)||https://www.wasuper.com.au/members/why-wa-super/kiwisaver-transfers/|
|FIRST Super||1300 360 988 (or +61 3 8663 2110 when calling internationally)||https://www.firstsuper.com.au|
|Energy Super||1300 436 374 (or +61 7 3231 6266 when calling internationally)||https://www.energysuper.com.au|