Many New Zealanders have some or all of their retirement savings in a superannuation scheme other than KiwiSaver. This may be a workplace savings scheme or another superannuation scheme.
Superannuation schemes are managed fund investments. When you save via a superannuation scheme, your money is pooled with other New Zealander’s in your scheme and is spread across different kinds of investments. Some schemes offer additional benefits such as life or disability insurance.
Unlike a bank term deposit, the return you get from your superannuation scheme will go up and down over time, depending on what it’s investing in. With some schemes the investment choice will be made for you. In others you’ll choose an investment fund.
Growth and aggressive funds have a much higher proportion of ‘growth’ assets. Growth assets are things like shares and property and these go up and down in value more frequently than ‘income’ assets like cash and bonds. This means their returns may rise and fall quickly. However over time they typically provide a higher return.
Superannuation scheme returns aren’t shown in tools like Smart Investor as there are often special features of superannuation schemes that mean you can’t compare them directly to KiwiSaver funds. However you can use average KiwiSaver fund returns as a guide to what you should expect from your superannuation scheme.
Superannuation schemes are either monitored by a licensed supervisor or by us to make sure they meet the required standards and act with your best interests in mind. All superannuation schemes must be registered. The risks for individual schemes vary depending on the scheme structure.
Fees can have a big impact on your total returns over the longer term. It’s worth keeping an eye on the fees you pay because as your balance grows so will your fees.
If you are in a workplace superannuation scheme your employer may part or all of the scheme administration fee.
If you’re using a financial adviser they may also charge you a fee for their services. There may also be other fees for example if you:
A product disclosure statement (PDS) will provide the essential information you need when joining. Compare the benefits of the superannuation scheme with joining KiwiSaver
Review your superannuation scheme account at least once a year. The ideal time to do this is when you receive your annual member statement.
Your annual statement shows money that has gone in and out of your superannuation account in the past year.
All superannuation schemes must give you a copy of their annual report, or a link to it on their website, within six months of the end of their financial year.
The annual report describes any changes made to the scheme in the last year, how it’s being managed, how investments have performed against the scheme’s goals, and if the auditor has raised any concerns. It also gives details of the size of the scheme’s membership, total funds invested and investment returns.
In addition to the annual report, you’ll also be able to access annual fund updates for the individual funds within your scheme. Fund updates let you see how your fund is performing, what it’s costing you and what your fund is currently investing in. You’ll find fund updates on the Disclose register.
This is a normal part of investing and reacting by making changes when the value is low will often make things worse.
If you are thinking about transferring money from another country back to New Zealand, make sure you have all the facts before making your decision.
If you want to transfer money from your UK pension fund back to New Zealand, you must use a New Zealand Recognised Overseas Pension Scheme (ROPS) - a scheme which has permission to receive transferred UK pension funds. You cannot transfer your UK pension savings into your KiwiSaver scheme.
If you have already transferred your UK pension into a New Zealand ROPS, you may be able to transfer it back to a registered pension scheme in the UK, but the rules around this are complex, including any tax implications, so we strongly recommend you speak to an financial adviser and consider speaking to an international tax adviser.
If you’re in a UK ‘defined benefit’ (DB) pension scheme or fund, transferring your savings to New Zealand can have significant financial and tax implications. Seek financial and tax advice to ensure the transfer is in your best interests.
Be aware of people contacting you out of the blue
If you’re a New Zealand resident, you can transfer your Australian superannuation savings into your KiwiSaver scheme. If you’re living in Australia permanently, you can also transfer your KiwiSaver savings to an Australian complying superannuation scheme.
Once your pension has been transferred, you cannot transfer it back so we strongly recommend you speak to a financial adviser first. You should also consider speaking to an international tax expert.
Before making a decision to transfer, get advice from an authorised financial adviser. You should also consider speaking to an international tax expert. To learn more read IRD's fact sheet on trans-Tasman transfers.
If you are a New Zealand resident wanting to transfer pension funds from your country of origin to New Zealand, you need to check whether the laws in your country allow it.
Consider the tax and financial implications before deciding. The IRD's website provides some information on foreign superannuation taxation, but you should also get advice from a financial adviser and an international tax expert.