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Transferring AU superannuation funds

Transferring your Australian superannuation funds to KiwiSaver

New Zealand residents can transfer their Australian superannuation savings into their New Zealand KiwiSaver scheme.

KiwiSaver members can also transfer their KiwiSaver savings to an Australian complying superannuation scheme, if they are moving permanently to Australia.

Before you transfer your funds, there are some important things to consider. Once the funds are transferred to New Zealand, you can only transfer them back to Australia if you move there permanently.

Please also read the Inland Revenue Department’s fact sheet on trans-Tasman transfers.

Get independent financial advice

One of the most important things on your checklist is to make sure you get independent financial advice as this involves the management of your retirement funds.

There are costs associated with transferring your Australian superannuation savings into a New Zealand KiwiSaver scheme. 

There are also currency conversation impact and tax implications to consider.

When you are ready to transfer your funds into a New Zealand KiwiSaver, you also need to be able to choose a KiwiSaver provider that meets your savings needs and retirement profile.

Just because you can transfer your savings to KiwiSaver does not mean you should.

What to consider before transferring your money

Here are the top facts to know before you transfer your funds:

  1. the amount you are planning to transfer
  2. the fees and transfer costs of your Aussie superannuation scheme and your KiwiSaver provider
  3. the loss of benefits, if any, when you transfer your Aussie savings into a KiwiSaver scheme
  4. the tax implications when you transfer your Aussie savings into a KiwiSaver scheme
  5. the basis for comparing your Aussie provider with the KiwiSaver provider

 Ask yourself these questions before you make your transfer

1. What is the amount of money I'm planning to transfer?

Whether it's $5,000 you want to transfer or $500,000, everybody will have a different idea of how important that money is. In other words what is a small amount of money for you could be a large amount for someone else. Your circumstances usually influence your ultimate decision.

Know your rollover valueYour ‘rollover’ value is the full amount you are entitled. Check with your Australian superannuation provider(s) to find out what the amount is. You may decide that the amount is small enough to consolidate without the need to undertake extensive research, or that the cost to transfer is fair and reasonable.

If your superannuation is a large sum, we strongly encourage you to take more time to fully understand the implications of the transfer. 

If you're not sure who your provider is, check the Australian Tax Office's Lost Member Register or use the SuperSeeker tool which can be found at www.ato.gov.au/superseeker

2. How do the fees and transfer costs compare between my Australian superannuation scheme and KiwiSaver provider?

Know your fees

Most investment management fees vary. Find out how fees are charged. These are the typical types of fees:

  • fixed charges (for example, monthly fees)
  • percentage-based fees (fees charged as a percentage of the investment portfolio’s total value)
  • performance-based fees (fees charged when the fund managers’ returns do better than the market’s benchmark).

Make sure you understand all the fees that apply across all of your investments especially between your Australian and KiwiSaver providers so you can consider whether you are better off consolidating the funds or not.

Know your transfer costs

Your Australian provider(s) may charge a fee to transfer the funds. Likewise your KiwiSaver provider may charge a fee to arrange it. Currency exchange rate fees are likely to apply so find out exactly what you will be charged as this could influence your decision.

3. What benefits (if any) will I be giving up if I transfer my money to KiwiSaver?

You may have benefits linked to your Australian superannuation savings. Check if your Aussie superannuation savings offer:

  • additional benefits such as life, total and permanent disability or income protection insurance
  • any guarantees on the amount paid out upon retirement age.

The guarantees usually depend on how much you have contributed and for how long. They are sometimes referred to as a company final salary, accumulation fund or combination of these.

It always pays to check what (if any) benefits you may have and their value. You may decide you don't want to give these benefits up.

4. Are there any tax implications to transfer my Aussie superannuation savings to KiwiSaver?

The way you pay tax on your investments will differ in Australia and New Zealand. Which country is more favourable as the home for your superannuation savings depends on your individual funds and your circumstances. The table below captures our current understanding of the tax differences:

 

Australia superannuation fund

KiwiSaver

Tax on transfers

no tax on transfer of savings to NZ

no tax on transfer of savings to Australia

Tax on earnings

generally a flat rate of 15%

range from 10.5% to 28% depending on your Prescribed Investor Rate (PIR)

Tax on capital gains

taxes gains on equities

does not tax gains on Australasian equities

To help you understand how the tax implications will affect you, we strongly recommend you visit the Inland Revenue Department and the Australian Tax Office websites.

5. What other things should I compare between my Australian provider(s) and my KiwiSaver provider?

Look at what types of funds or assets can you invest in

  • It may vary between you Aussie provider(s) and KiwiSaver providers. Know all your options so you are comfortable with the choices you can make.

Look at whether you have control over investments in each country

  • Australian superannuation providers do offer a greater variety of options for choosing your own investments.
  • Check what investment options there are as you may not be able to invest in the same options within current KiwiSaver schemes.

Look at how you access information and advice once your money is transferred

  • Think about how you are going get information about your investments.
  • Ask yourself, do you like regular face-to-face contact with your providers, or are you happy to discuss your investments over the phone, by email, or over the internet.
  • Think about what works best base on where you live.

What can you do with your superannuation funds at 60 years old

After your Australian superannuation funds have been transferred to your KiwiSaver, they will be available when you reach 60 years old, and you meet the Australian definition of retirement at that age.

For superannuation transfers into KiwiSaver from countries other than Australia or the UK*, you will not have access to the funds until you reach the New Zealand retirement age (currently 65), and you have been in KiwiSaver for at least five years. Check our information on UK pension fund transfers here.

(* From April 2015, UK QROPS transfers are no longer permitted into a KiwiSaver Scheme)