Employers and KiwiSaver

This page gives an overview of employers' role in KiwiSaver.

An overview

KiwiSaver was designed to be a work-based retirement savings initiative to make it as easy as possible for Kiwis to save for their retirement. Some of the key requirements that employers have are to:

• Enrol employees who request to join KiwiSaver.
• Automatically enrol new staff where required and act on eligible opt-out requests.
• Provide Inland Revenue KiwiSaver packs to the above two groups and any employee who requests an information pack.
• Process KiwiSaver contributions with PAYE payments.
• Make employer contributions where employees are eligible.
• Act on contributions holiday notices.
• Change contribution levels when requested by employees.

All of these requirements and full information about how KiwiSaver works are detailed in Inland Revenue's KiwiSaver employer guides. But the questions your employees will ask you go beyond how KiwiSaver works.

You can redirect many of the KiwiSaver questions and importantly redirect the investment questions you receive to a trusted expert by choosing the ASB KiwiSaver Scheme as your Employer's Chosen Scheme.

As well as the option of choosing an Employer's Chosen Scheme, you can also choose to make additional employer contributions. If you want to know more about either of these options, please contact us on 0800 ASB RETIRE (0800 272 738) or kiwisaver@asb.co.nz

Employer contributions

As an employer, you are required to make contributions to KiwiSaver if:

• your employee is contributing to KiwiSaver; and
• your employee is aged 18 or over and not yet eligible to take out their end KiwiSaver retirement benefit; and
• you are not exempt from paying employer contributions. You may be exempt from paying employer contributions if you pay superannuation contributions for your employee to an alternative superannuation scheme described in the KiwiSaver legislation. If you think this exemption may apply to you or may enable you to reduce your employer contributions please contact us on 0800 ASB RETIRE (0800 272 738).

Employer contributions are generally 2% of the employee's pre-tax Salary or Wages. You may choose to contribute more.

The Government announced in the 2011 Budget that the compulsory employer contribution rate will increase from 2% to 3% of gross salary or wages with effect from 1 April 2013.

Contributions up to 2% (less any tax free contributions made by you as an employer to a complying superannuation fund on your employee's behalf) are generally free of employer's superannuation contribution tax ("Contribution Tax") for employees aged between 18 and the date they are eligible to take out their end KiwiSaver retirement benefit.

From 1 April 2012, there will be no exemption from Contribution Tax for any employer contributions. From 1 April 2012, Contribution Tax will be deducted at the employee's marginal tax rate before employer contributions are made.