Learn about New Zealand's Kiwisavers, the all-or-nothing deal

New Zealand Kiwisaver (kiwisaver)

The New Zealand Kiwisaver is New Zealand's flagship pension program, similar to our national pension. In other words, you can think of it as a policy where you save some of the money you earn now, and some of it is paid for by the government, so that you can receive a pension later in life to support you in your old age.

The money is taken from the people, and the government-appointed institutions (banks, etc.) roll it around, and if they make a profit, they distribute that profit to the people, so that in the long run, they get more money back than they put in. But it's a kind of accumulative investment, so of course you can lose money.

Unlike the Korean National Pension, the New Zealand Kiwisaver is not compulsory - you only have to enroll if you want to.

New Zealand Kiwisaver enrollment requirements

The requirements to join Kiwisaver in New Zealand are fairly straightforward. You just need to be a resident of New Zealand and have permanent residency (including temporary residency) or citizenship. In terms of age, you can join as long as you're at least 18 years old.

Because of these requirements, we've seen a lot of interest in New Zealand Kiwisaver from people who have just gotten their permanent residency, but unfortunately, we're not able to offer it to people on work visas.

If you've been granted temporary permanent residency and have decided it's time to apply for permanent residency after two years, you may find it helpful to read my original post, How to apply online for permanent residency in New Zealand.

How to apply for New Zealand Kiwisaver

When you get a job and have an employer

New Zealand Kiwisaver is usually automatically enrolled by your employer when you start work. If you don't want it at that time, you can talk to your employer and ask to be removed.

In my case, I received a page from my employer after I got my green card, and it was a form to fill out with information about my Kiwisaver, including my contribution, %, etc.

1 TP3T of your own contribution can be set at 31 TP3T, 41 TP3T, 61 TP3T, 81 TP3T, or 101 TP3T.If you don't make a decision, your employer will assume it's 31 TP3T, which is 1 TP3T from your pre-tax weekly or biweekly paycheck.

The reason why it feels like you're losing out if you don't have kiwisavers is because your employer is forced to add 3%. The employer's contribution is always 31 TP3T, regardless of your own contribution of 1 TP3T, because it's not your money, it's your employer's money that's added to it.

If you're employed by an employer, you don't have to think much about it because your contributions are withheld from your weekly or fortnightly paycheck. You can find out how much is taken out on your PAYE slip.

If you've gotten a job and haven't heard about Kiwisaver from your employer, it's worth asking them.

Self-employed or Unemployed

Self-employed people, freelancers, and those without an employer can sign up for New Zealand Kiwisaver by going to a government-appointed organization and applying in person.

If your primary bank is included, you can go there, or you can go to any of the government-designated institutions regardless.

You can go here to sign up for Kiwi Saver, set your own contribution of %, and make your payment. You can find the government-appointed organizations below.

I chose the Mercer organization and have been making payments to date. I don't remember why I chose Mercer at the time, but I have no major complaints to date.

KiwiSaver Product Introduction

The New Zealand Kiwisavers can easily be thought of as an accumulation fund. There are different types of funds, too: some are aggressive, with a heavy weighting in stocks, while others are more conservative, with a heavy weighting in cash or bonds.

You only need to remember one thing. High risk high return, low risk low return, i.e. if the risk is high, the return will be high, if the risk is low, the return will be low. This is a matter of personal preference, so you can choose a KiwiSaver product based on your own personal preferences.

For example, let's take a very quick look at the Mercer Kiwisaver product I'm enrolled in.

I've pulled up two low-risk products, and you can see the product name, risk level, and investment percentage, and then choose a product. I've been contributing by selecting Sustainable Plus Balanced (Growth 6, Stable 4).

Once you've chosen a product, you can change it at any time in the app if you want to, so it's a little less intimidating. For reference Other products from Mercer Kiwisaversto view the documentation, please utilize the link above.

And if you're interested in becoming a Mercer Kiwisaver, you can sign up using the online application button below.

Actually, Mercer is just for illustration purposes, and I figured if you picked one of the organizations dealing with kiwisavers above, it would probably be similar.

New Zealand Kiwisaver Advantages

The reason I mentioned that I feel like I'm losing out if I don't enroll is because my employer and the government add to my contributions, meaning my Kiwisaver isn't just my own money. If your employer and the government are giving you money, why wouldn't you?

New Zealand Kiwisaver benefits

The New Zealand government will add $521.43 to your Kiwisaver account each year if you have more than $1,042.86 in your account between July 1 of the previous year and June 30 of the following year.

Even if you don't earn $1042.86 during that time, the government will add 50 cents to every dollar you earn. For example, if you only earned $100, the government will add $50 to your account at 50 cents per dollar.

New Zealand Kiwisavers Cons

With both employers and the government putting money away for you, what's the downside? Think of the name pension and you'll get the answer: you can't find it until age 65.

I think the government has set the timing of the pension like this because they want people to put money away for a long period of time, so they can use it to support themselves later in life.

However, as always, there are exceptions. There are some cases where you may be able to find the money you've earned even if you haven't turned 65, and here are some of them.

Exceptions when you can spend money in Kiwisaver

In any of the above cases, you'll still need to provide documentation to prove your circumstances before you can apply for a withdrawal and receive your earned funds.

If you're interested in learning more about the New Zealand kiwisaver, please see the New Zealand IRD page below.

How to cancel your New Zealand Kiwisaver and what documents you need to do so

Even with all of these great benefits, there are times when you may need to cancel your Kiwisaver subscription. Maybe you've decided to move back to your home country, or maybe you're traveling to another country for work. In these cases, you can find the Kiwi Saver you've accumulated.

Kiwi How to cancel your saver and what documents you need to do soif you're curious, please refer to my previous post. While this is for a specific institution, I'm guessing that your own institution (bank, etc.) probably has a similar process.

Finalize

Today we've been talking about Kiwisavers in New Zealand, which seems to be a case of if you don't sign up, you're out of luck. While it's a little easier to sign up if you're employed by an employer, I wonder if the self-employed or unemployed have to do a little more legwork.

However, by doing your own research, you'll be able to better compare New Zealand Kiwisavers, so I think this is a good thing.

Kiwisaver is a great deal, and if you're planning to live in New Zealand for an extended period of time, you shouldn't miss out. Thank you for reading this article.