11 December 2007 Media Statement

Bill’s KiwiSaver provisions to be fine-tuned

The government has introduced a number of minor changes to fine-tune KiwiSaver legislation in the taxation bill currently before Parliament.

The changes are part of supplementary order paper No. 167, which amends the Taxation (Annual Rates, Business Taxation, KiwiSaver, and Remedial Matters) Bill.

“The changes are being made to some of the details of the proposed KiwiSaver legislation to ensure that, once enacted, it works as intended and to best effect,” Finance Minister Michael Cullen and Revenue Minister Peter Dunne said today.

“There has been a lot of public interest in the introduction of compulsory employer contributions to KiwiSaver and the accompanying employer tax credit.

“That interest is evident in the quality and detail of submissions that the bill attracted, and in the many ensuing discussions that have taken place both with employers and the superannuation fund industry, who have suggested a number of these changes.

“As a result, we are proposing a number of minor policy and drafting improvements to some of the proposed legislation, to be made at the Committee stage of the bill’s passage.

“The Finance and Expenditure Committee recommended allowing employees who contribute to KiwiSaver schemes to phase in their minimum 4 percent contribution, starting at 2 percent on 1 April 2008 and arriving at the full 4 percent by 1 April 2011. For consistency’s sake, that option is being offered to members of complying superannuation schemes as well.

“Another of the minor policy changes is a consumer protection measure that will require complying superannuation funds to ensure that their fees are ‘not unreasonable’, a requirement that already exists for KiwiSaver schemes. The Government Actuary will be empowered to monitor any fee changes to see if they are unreasonable.

“A further small policy change will see the introduction of a public register of complying superannuation funds, so that people can determine whether membership in a specific scheme will attract the relevant KiwiSaver benefits.

“These are the main policy changes that the supplementary order paper makes to the bill’s KiwiSaver provisions, all of which are intended to make the new law as effective as possible,” they said.

ENDS

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