2020 has seen a lot of changes applying to the KiwiSaver schemes. KiwiSaver have made these changes in order to make it easier for their members to manage their KiwiSaver accounts. Let’s look at the changes in more detail and see if they apply to you so that you can keep on top of your KiwiSaver savings.
1st April 2020 changes:
As of April 1st, 2020, any KiwiSaver member over the age of 65 can make a withdrawal for retirement. If you joined KiwiSaver before 1st July 2019 and you are over the age of 65 when you joined you would have been locked in by the five year membership, however as of the 1st of April these members can now decide to opt out of the lock-in period. The ANZ website states that if you do opt out you will no longer be eligible for Government contributions or compulsory employer contributions.
Early withdrawal category:
If you are younger than 65 there is a new withdrawal category. If you meet the criteria of unfortunately having been diagnosed with a life shortening condition you can apply to withdraw your savings prior to the age of 65. There are various circumstances that will allow you to withdraw your savings for example: if you were born with a condition that is commonly expected to reduce your life, you can make the withdrawal however you will not be eligible for the Government contributions or compulsory employer contributions.
To find out more about the new withdrawal category please click here.
Upgrades to KiwiSaver in myIR:
There have been some improvements made to myIR, the IRD Website, is making it easier to keep track and see how much you have contributed to your KiwiSaver.
If Inland Revenue believes your PIR is incorrect, they may provide KiwiSaver with an updated PIR for you. A prescribed investors rate is the tax rate applied to income you earn on your investments, including KiwiSaver. Inland Revenue will let your KiwiSaver provider know if it looks like you are on the wrong PIR rate, making sure that you pay the right tax amount.
15th May 2020 changes:
Retirement savings and income projection:
An important update on the ANZ website states: “If you’re aged between 18 and 65, your annual account statement may include an estimate of what your balance may be at retirement, both as a lump sum amount and as a weekly income stream for your retirement. The projections are based on assumptions set by the Government”.
If you wish to find out more about your income projection and account statements go to fma.govt.nz
Do these changes apply to you?
The latest KiwiSaver updates may not be relevant for you; however, it is important to ensure that you are making the right choices so that you are meeting your retirement saving goals. You could also check if you are on the right PIR.
Those are the current developments that have been made during 2020 to the KiwiSaver scheme. For more information about the current KiwiSaver changes click here. If you are not currently apart of KiwiSaver or need help with your KiwiSaver contact us today we are here to help.