Employer Responsibility

As an employer, you play an important role in helping your employees to save. From 1 July 2007 all employers will be required to make KiwiSaver available to all new staff, unless the employer qualifies for an exemption from automatic enrolment. Please check with our Authorised Financial adviser for changes effective from 1 July 2011.

Your KiwiSaver responsibilities include the following:

Financial advice

You should avoid the possibility of future liability resulting from the provision of financial advice. If you're simply passing on information about KiwiSaver it's unlikely to constitute giving financial advice. We strongly recommend that you advise your employees to seek independent advice especially in relation to choosing a product provider and or savings scheme. Different savings schemes may provide differing rates of return, levels of risk and policy wordings. 

We can provide employees with the information that they need to make these decisions by completing individual Risk Profiles and assessing individual needs.     

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When KiwiSaver deductions start

You are required to start KiwiSaver deductions from a new employee's first pay onward. If they later decide to opt out you will need to check their opt-out form and pass it on to the Inland Revenue.

If an employee opts out you may refund any contributions you still hold. If you have already passed the contributions on to the Inland Revenue with your monthly EMS they will refund them directly to the employee. If you have made any employer contributions, the Inland Revenue will refund these to you.

Deductions for existing employees need to start on the first pay after they join KiwiSaver.

The Inland Revenue will hold contributions deducted in the first three months while a new member is deciding which scheme to go for. The contributions are then paid, with interest, into their KiwiSaver account with their scheme provider.

Starting enrolment

Employers start the enrolment process by: giving new employees a KiwiSaver information pack within seven days of their starting work (excluding casual and temporary employees employed under a contract of service that is for 28 days or less, election day workers and private domestic workers) giving Inland Revenue the names, IRD numbers and addresses of all new employees and those who want to join KiwiSaver, using a new form that you send in monthly with your employer monthly schedule (EMS) or before giving employees investment statements from your chosen KiwiSaver scheme provider, if you have one.

Making KiwiSaver deductions

You need to deduct employees' KiwiSaver contributions from their before-tax pay and forward them to Inland Revenue through the PAYE system. You also need to ensure that new employees' KiwiSaver contributions start from their first pay. The Inland Revenue have added new calculations tables to the Four-weekly and monthly PAYE deduction tables (IR341) to help make it easier for you to work out how much to deduct.

Responding to Opt-Out requests

A new employee can only opt out between weeks two and eight of starting employment with you. You need to action any opt-out forms you receive from employees and send them to Inland Revenue. If an employee opts out you need to stop their KiwiSaver deductions. If you have made deductions but not yet passed them on to Inland Revenue, you can refund them to the employee. Alternatively, you can send them with your EMS and the Inland Revenue will refund the employee directly.

Responding to Contribution Holiday requests

People who have been saving with KiwiSaver for 12 months can apply for a temporary break from saving, called a Contributions Holiday, of between three months and five years.

If an employee takes a break from saving with a Contributions Holiday you need to stop their deductions and restart them when their savings break finishes, or when they ask you to.

Inland Revenue will send you a reminder before an employee, on a break, is due to start making contributions again. Contributions holidays are flexible and an employee may ask you to re-start deductions before their holiday period expires.

Financial Hardship

If a KiwiSaver member suffers financial hardship or serious illness within the first 12 months of contributing to KiwiSaver, they should talk to Inland Revenue. They may be eligible for an early Contributions Holiday.

Going on holiday

If one of your employees takes a holiday, overseas or in New Zealand, and continues to be paid by you in that time, you should continue their KiwiSaver deductions unless they take a contributions holiday.

Record keeping

Employers need to record which employees are KiwiSaver members, their contribution rate and any notification of contributions holidays or opt-outs. You'll already know that you are legally bound to keep PAYE records and these will also show the KiwiSaver amounts you deduct and pass on to the Inland Revenue.

Preferred providers

You can choose to have a preferred KiwiSaver provider. This will mean that employees who don't choose their own savings scheme will go with your preferred provider, instead of one of the 6 default scheme allocated by the Government. If you choose to have a preferred provider the Government Actuary will let the Inland Revenue know. If an employee who has been saving with your preferred provider leaves, you may need to give them the option of choosing another scheme, or ask the Inland Revenue to transfer them to a default scheme.

Questions about KiwiSaver

If employees ask you questions about KiwiSaver that you don't feel comfortable answering, refer them to their information pack or the KiwiSaver website. They can also call 0800 KIWISAVE (0800 5494 7283) or discuss with our Authorised Financial Advisor.

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Penalties and disputes

If you don't provide the Inland Revenue with the required KiwiSaver information or don't make a KiwiSaver deduction you may be liable for penalties.

If you make a deduction but don't pass it on to the Inland Revenue there will be shortfall penalties applied. In these cases Inland Revenue will make good the payment for the employee and follow-up with the employer.

Special circumstances

NZ Super

KiwiSaver is designed to complement NZ Super, to give people a better standard of living in retirement. Being a KiwiSaver member does not affect eligibility for NZ Super.

ACC

KiwiSaver members who receive weekly compensation from ACC will be able to choose whether to have KiwiSaver contributions deducted from their payments. More information is available from ACC.

Paid parental leave

KiwiSaver contributions will not automatically continue during paid parental leave, but they can be kept going if the parent contacts the Inland Revenue. When an employee returns to work after taking paid parental leave, you'll need to resume deducting KiwiSaver contributions from their pay.

More than one job

Generally, KiwiSaver members have savings deducted from every job they hold. However thay can choose Opt Out from secondary employment.

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