Kiwisaver Info
June 30th, 2007 at 11:39 am by David FarrarAs is often the case when the Government makes last minute changes, the implementation suffers. As an employer I don’t yet have the Kiwisaver employee packs I need to give to my staff. We don’t even have the forms they need to fill in to opt in.
The Dom Post reports on some questions from people about the scheme. It is a pity they did not provide the answers also, but I’ll do it for them:
Mr Scott said KiwiSaver contributions should be made tax-deductible, which would make the scheme more appealing to employers and employees.
Contributions from the employer are fully tax deductible. Contributions from the employee get a tax credit which for most employees is worth far more than merely having a contribution tax deductible. Here is the value of the tax credit vs a tax deduction at each level:
$26,000 – $1,040 credit vs $203 deduction
$45,000 – $1,040 credit vs $594 deduction
$65,000 – $1,040 credit vs $1,014 deduction
$100,000 – $1,040 credit vs $1,560 deduction
At $66,666 a tax deduction on your 4% contribution would be worth more than the tax credit.
Sales assistant Janine Bogoievski said she wanted to know what would happen to any savings if she or her husband died early.
They become property of the estate and go to the beneficiaries in the will.
No tag for this post.
June 30th, 2007 at 4:46 pm
DPF – I communicated with all my staff post-budget giving them pros and cons for KiwiSaver. I’m still waiting for anyone to get back to me! Another taxpayer-funded advertising campaign seems to have been a blinding success!!
Vote:June 30th, 2007 at 6:53 pm
Does kiwisaver save the kiwi family or add to more public confusion .Mr cock up gummint is at it again !
Vote:June 30th, 2007 at 7:49 pm
A clear case of the consequences of `Policy On The Hoof’.
Start date should have been deferred in the last budget until until either 1 January 08 or 1 April 08. At the moment it is just another half cocked Labour crock which won’t run like it should because of their ineptitude.
The simpler way to do set it up would have been having payments direct by employers to the repective funds management companies and tax rebates collected in arrears when people filed their tax returns. That way it would have been available to employers, sole traders etc as well.
Vote:June 30th, 2007 at 9:15 pm
The forms and packs are downloadable from the Internet, to get the form to join up to kiwisaver go to the IRD website search for KS2 and then download it. To get the intro pack just search on the IRD website for the KS3 form.
Still it would be nice to have the costs of prinint payed by the tax payer rather than oneself.
Vote:July 1st, 2007 at 8:23 am
Today the Labour Party will attempt to get another day of good news of some vast new Government programme they have invented. Of course we should not look too closely at the detail on both Kiwi saver and 20 hours free. Naturally the country is feeling a little subdued with the probable loss of the America’s cup and the rugby. There is not a damn thing the Labour Party can do about all this unless they announce a special Government programme for those suffering depression.
Vote:July 1st, 2007 at 9:24 am
“I don’t yet have the Kiwisaver employee packs”
Why did you not download them? We got ours over a week ago.
I discussed it at the team meeting and of my 17 man team 14 signed up by Friday.
Sb
Vote:July 1st, 2007 at 9:30 am
Up until last week we had yet to receive our Kiwisaver packs. So I call IRD and go through their automated system and ordered 20 packs. A few days later 10 arrived. So I called again but their system was working so I actually spoke to someone. Hi I need a further 10 packs, I ordered 20 but only 10 arrived. Ok the person said I’ll send you another 10. The next day 20 arrived.
Vote:July 1st, 2007 at 9:51 am
My work has a super scheme that is better than kiwisaver. They’ve said that we can sign up or kiwisaver, but it might mean offsetting employer contributions against future pay increases. Might. They’re not sure. We’re not sure. What to do?
Vote:July 1st, 2007 at 10:29 am
Ooh! I’ve just read that Cullen said that employers won’t offset kiwisaver against wages! Now there’s a relief! Must remember to tell my employer that tomorrow!
Vote:July 1st, 2007 at 10:40 am
I’ve got 75 staff. I’m not fucking printing off 75 packs because Labour screws over business with last minute changes.
It is the Govt’s responsibility to provide the info to employers to pass on.
Vote:July 1st, 2007 at 11:04 am
How will this latest brainstorm effect inflation?. And if Kiwisaver contributes to inflation what effect will this inflation have on any savings made to Kiwisaver over the next few years?
Vote:July 1st, 2007 at 11:30 am
side show bob
Govt spending can’t cause inflation. Keep up with the mega brain Dr. Ideology… he’s onto it and the country needs him.
Move on.
Vote:July 1st, 2007 at 11:50 am
“I’ve got 75 staff. I’m not fucking printing off 75 packs”
So from this we can deduce that you would rather screw over your staff than print off 75 sheets of paper?
You only need the KS 2 form in hard copy the rest can be passed around as web links or PDF files.
Thats what I did wasn’t hard or expensive.
What will you say to those 75 staff when they ask about why you are late when their mates companies are on time for 1st July?
Sb
Vote:July 1st, 2007 at 12:30 pm
As someone talking to employers about KS, i don;t think that many will actually be organised by tomorrow.
of the 100 i have spoken to in the past two weeks, 1 was prepared.
i am doing more seminars to employees and employers in the next two weeks than i did in teh past 2 months. people have been putting it off and putting it off and now can;t.
Theres also more to it than 1 form, theres the KS1 as well, which he will have to print off, plus the generic info pack, this should all have been provided. but DPF is not in the minority, most employers i have spoken to have recieved nothing.
good luck DPF. i am going to be drowing in work on this over the next month i expect, and i imagine employers are going to be bombarded with questions as well.
at least we ‘kinda’ have till october for IRD to get it right, as thats when the first money shifts from them to the fund managers.
AL
Vote:July 1st, 2007 at 3:36 pm
Inventory
Did you not see the advice from IRD that employers should NOT give staff advice on the pros and cons of KiwiSlaver? All employers I’ve talked to are keeping well clear. You should advise your staff to obtain their own independant financial advice but you are on very dasngerous ground advising them yourself. The most obvious risk is that the advice you give proves in time to be detrimental to the staff member, or is perceived to be. You open yourself to all sorts of attack.
Perhaps you might give them a list of recommended financial advisors for those who do not already have their own.
Vote:July 1st, 2007 at 5:11 pm
Sb – don’t fucking patronise me. I have bent over backwards to help my staff with this. I have summarised info for them, I have done examples of how savings can grow over time. I have spent hours and hours wading through the paperwork. I’m having to pay my payroll staff to go on a course to learn how to cope with it. I’m just considering having a financial advisor come in and do a session with my staff (which I will pay for) to talk through options and schemes.
So don’t you fucking sneer at me about screwing over my staff because I think a $50 billion a year Government should be able to deliver the forms on time. And no I do not blame the IRD staff – I blame Cullen and Clark for dicking around and changing the scheme without giving adequate notice. They have absolutely no understanding of how these last minute changes affect a business.
And yes I could just e-mail the staff a link to a pdf and let them work it all out, but I actually value my staff enough that I want to give them in person a proper pack, and have people available to talk to them after they read it in case they have questions.
I wanted to be able to do that for the last two weeks. But all my plans are delayed while I wait.
Vote:July 1st, 2007 at 11:54 pm
I don’t know why anyone would want to sign up to Kiwisaver anyway.
You do realise that once you opt-in it becomes compulsory? You can NEVER decide to manage your retirement savings in some other way, ever.
Yet people seem excited because it bribes them with $1000 (of their own money…). Crazy.
Do you really want to make a decision now that will tie up 4% of your earnings for the rest of your life without you being able to change your mind later? I know I certainly don’t.
Vote:July 2nd, 2007 at 8:05 am
Sb (and Greg) –
Vote:So you decided in your haste to screw over your staff by giving them sh*t poor advice?
Rather than pointing out that for most people their best option is to “self-employ” and sign up with a provider at the minimum rate ($100 per month with most)?
At least for the next couple of years until the employer contribution escalates?
July 2nd, 2007 at 9:02 am
“Sb (and Greg) -
So you decided in your haste to screw over your staff by giving them sh*t poor advice?”
No I did not.
I gave them no advice at all as I am not a financial expert.
I made sure that each person received the IRD pack as a PDF. (Three could not PDF for various reasons so I printed them off hard copy)
The company commissioned a finance expert to provide both a written and verbal briefing. I made sure that each person received the written briefing pack and had a chance to attend the verbal presentation.
After that I told them than if they got their KS2 to me by 9am Thursday I would personally make sure that the Pay group person received the forms.
They did ask some questions, I just pointed out the appropriate passages in the IRD pack and/or the written presentation. If that did not cover it I told them to contact the company that prepared the written pack for us.
At no point did I give any advice, in fact I emphasised that they should only take advice from somebody that was qualified to give it.
All information came from a major finincial services company – not sure why you think I screwed over the team? I did not pressure them in any way, in fact I told them that unless they were sure of their choice to delay.
Sb
Vote:July 10th, 2007 at 12:13 pm
Contribution rate. 4% or 8%?
Can you change your rate after you’ve signed up? How frequently? Penalties?
I’m a finance and property student, currently on a low income (part time) and have been considering Kiwisaver. I’m a good saver, and don’t feel the need to use Kiwisaver to prepare for my retirement. But with the tax incentives and kick-start, the high return Kiwisaver offers would seem a good investment.
I hate the idea of having the investment locked away for such a long period (44 years), as I envision starting a business in the future. Additionally the nature of Kiwisaver really grates on my being; automatically signed up upon starting a new job, once signed up you cannot un-sign, have to take ‘contribution holidays’ to stop making payments.
So balancing the high return (for lower incomes) against how blatantly ‘annoying’ an investment it is has proved Kiwisaver to be a difficult decision. I’m still undecided.
I’m leaning towards signing up, but I would like to contribute the minimum amount possible that gives me the full tax benefit. So the sum of my yearly contributions should be as close as possible to $1,042.86. At my current salary that represents an 8% contribution, but naturally when my salary increases I would like to decrease my contribution to the 4% level.
Vote:Is it possible to change your contribution rate on a whim?
July 10th, 2007 at 3:47 pm
To answer my own question.
You can change your contribution rate after you have contributed at your chosen rate for a period of 3 months. No penalties.
As a result of this information I’ve decided to contribute to the Kiwisaver scheme at 8% initially. Have yet to decide what provider to go with.
Wanting high return, willing to accept the risk. Providing the expected return adequately compensates the risk. Any thoughts on which provider to choose?
Vote:July 10th, 2007 at 4:11 pm
To answer my own question.
You can change your contribution rate after you have contributed at your chosen rate for a period of 3 months. No penalties.
As a result of this information I’ve decided to contribute to the Kiwisaver scheme at 8% initially. Have yet to decide what provider to go with.
Wanting high return, willing to accept the risk. Providing the expected return adequately compensates the risk. Any thoughts on which provider to choose?
Vote: