Join KiwiSaver or review your fund

Why it matters

• Inland Revenue says you can join KiwiSaver if you are a New Zealand citizen or entitled to live in New Zealand indefinitely, and you live or normally live here. It is open to residents of any age, whether or not you are working.
• Inland Revenue says that if you save through work your employer must contribute too: at least 3.5% of your before-tax pay. Your employer pays tax on that contribution, so you may get less than that paid into your account.
• Inland Revenue says that if you are 16 or over, live mainly in New Zealand, have a taxable income of $180,000 or under and contribute, the government adds 25 cents for every dollar you save, up to $260.72 each KiwiSaver year (July to June). To get the full amount you must contribute at least $1042.86 in that year. You get less if you were a member for only part of the year. Your provider claims it for you.

Steps

1. Open Inland Revenue's Joining KiwiSaver page and check the rules. It says that depending on your situation you either enrol through your employer or directly with a scheme provider.
2. If you're starting a new job: Inland Revenue says your employer will automatically enrol you if you are eligible, aged 18 to 65, in a full-time or permanent part-time job or on a contract of more than 28 days, and not already a member. Your employer gives you a KiwiSaver information pack (KS3).
3. If you already have your job and aren't a member: Inland Revenue says to ask your employer for the KS3 information pack and complete the KiwiSaver deduction form (KS2). Give it to your employer and deductions start from your next pay. You can also join directly with a provider.
4. Choose your own provider rather than waiting. Inland Revenue says that if you do not choose, it puts you in one of the default providers or your employer's chosen scheme, and that you do not have to stay with either.
5. Work out which fund type suits you. Sorted groups KiwiSaver funds into five types by how much they hold in riskier investments such as shares and property: defensive, conservative, balanced, growth and aggressive. Its KiwiSaver fund finder helps you pick.
6. Compare funds of your type. Sorted says to look at fees, the service and support that come with the fund, and whether past performance is below that of similar funds, and says paying more does not necessarily get you more.
7. Choose your contribution rate from 3.5%, 4%, 6%, 8% or 10% of your pay. Inland Revenue says your employer deducts 3.5% if you do not choose, and you can change the rate once every 3 months unless your employer agrees to a shorter gap.
8. If you're already a member and want to review your fund: Inland Revenue says that once you are in KiwiSaver you can change your chosen fund at any time.
9. If you're switching provider: Inland Revenue says to apply directly to the provider you want to join, which arranges the transfer. It says this takes about 2 weeks, you can only belong to one provider at a time, and your old provider may charge a transfer fee, so check with them.

Documents you'll need

• The KiwiSaver information pack (KS3), which Inland Revenue says your employer gives you
• The KiwiSaver deduction form (KS2), which Inland Revenue says you complete and give to your employer if you already work there

Common mistakes

• Leaving your fund unchecked after automatic enrolment. Inland Revenue says that if you do not choose, you are allocated to a default provider or your employer's chosen scheme, and you do not have to stay there.
• Missing the opt-out window if you were automatically enrolled and don't want to be a member. Inland Revenue says you can opt out on or after day 14 and on or before day 56 of starting work, and that after that it accepts late opt-outs only in limited cases.

Watch out for

• Inland Revenue says the default rate for you and your employer is now 3.5% and will rise to 4% on 1 April 2028.
• Inland Revenue says it holds your contributions for 2 months (62 days) from the date it is told you are a new member, then passes them to your provider.
• Inland Revenue says that in a portfolio investment entity (PIE) scheme your investment earnings are taxed at your prescribed investor rate (28%, 17.5% or 10.5%). You give your provider the rate that applies and check it if your income changes, because it is based on your income over the last two years.
• Inland Revenue says you may be able to get some or all of your savings early if you are buying your first home, moving overseas permanently (to a country other than Australia), or have a serious illness, a life-shortening congenital condition or significant financial hardship.

When to get advice

• Inland Revenue says it cannot give you financial advice and that KiwiSaver investments are not guaranteed by the Government. It points you to Sorted and says you can speak with an authorised financial adviser.

Sources