Trans-Tasman portability arrangements
2015 KiwiSaver rules on trans-Tasman portability of savings apply only to the ability to withdraw funds on permanent emigration.
Schedule 1 of the KiwiSaver Act 2006, clause 14B(1)
New rules that apply to trans-Tasman portability of savings make it clear that they apply only to the ability to withdraw funds upon permanent emigration and are not an exception to the other KiwiSaver early withdrawal provisions.
Background
In mid-2013, the trans-Tasman savings portability arrangements between New Zealand and Australia came into effect. Under the arrangements, a KiwiSaver member cannot withdraw their retirement savings in cash upon permanent migration to Australia, as can be done if a member migrates to a country other than Australia. Rather, the member may transfer their savings to an Australian complying superannuation scheme. Participation is voluntary for members (who can choose to keep their KiwiSaver accounts open if they wish) and providers (who are not obliged to accept KiwiSaver funds).
Previously, the trans-Tasman portability rule in the KiwiSaver Act stated "a member may not withdraw any amount … after the member's permanent emigration to Australia …" (emphasis added). This could be interpreted as preventing a KiwiSaver member who has permanently migrated to Australia from making a withdrawal in any of the other circumstances provided for in the KiwiSaver Act (for example, withdrawal upon retirement or death, or withdrawal in the case of serious illness).
The portability rule has been amended to clarify that it is only an exception to the ability to withdraw funds in cash upon permanent emigration (not an exception to the other KiwiSaver early withdrawal rules).
Key features
In circumstances when a member has permanently migrated to Australia, but has chosen to retain their KiwiSaver account, the trans-Tasman savings portability arrangements:
- are only an exception to the ability to withdraw funds upon permanent emigration; and
- do not prevent any other withdrawal provided for in Schedule 1 of the KiwiSaver Act (although there may be other reasons why a withdrawal may not be allowed, for example, the New Zealand-based restriction for first homes).
Application date
The amendment came into force for early withdrawal applications made on and after 1 April 2015.