Moving to Australia from New Zealand? Or coming home to NZ from the land of Oz? You can move your retirement savings with you.
Can I move my money?
Yes – the New Zealand and Australian governments allow Kiwis or Aussies who are crossing the ditch permanently to take their retirement savings with them.
It’s not compulsory. But if you choose to do so, your nest egg must be deposited into KiwiSaver (if you’re moving to New Zealand) or Australian superannuation (if you’re moving to Australia). You can’t just put the money into other investments, and you also can’t access it to spend it before your retirement age.
Once shifted in either direction, your KiwiSaver or Aussie super money can’t subsequently be transferred to a third country. So the moral is to make your choices about where to retire carefully.
From New Zealand to Australia. If you’re moving to Australia permanently, you can take all of your savings with you as well as member tax credits and the $1,000 kick-start from the New Zealand government. Your money must be transferred into a “complying” Aussie super fund that is regulated by the Australian Prudential Regulation Authority (APRA). Any transfer from KiwiSaver to complying Australian super funds must be a transfer of the whole balance of your KiwiSaver account – partial transfers are not allowed.
From Australia to New Zealand. Conversely if you’re moving money from Australian super to New Zealand, it must go into a KiwiSaver scheme. Many KiwiSaver schemes are now set up to receive your Australian super.
The fine print
In most cases the rules of the country you transfer the money to will apply. But there are some exceptions so it’s a good idea to brush up on the rules before you make a move.
New Zealand to Australia. The maximum you can move to Australian super from KiwiSaver is AUD$540,000 if you’re aged less than 65 and AUD$180,000 over that age. Once your money is deposited into an Australian super fund, Australia’s superannuation rules apply:
- Money can only be transferred to and held in a complying super fund regulated by APRA.
- Money cannot be transferred to a self-managed super fund.
- Money can be accessed when the member reaches New Zealand’s retirement age (currently 65 years old).
Australia to New Zealand. There is no limit to how much you can transfer into KiwiSaver from Australia. KiwiSaver rules that apply once you transfer Australian super to KiwiSaver include:
- Money can only be transferred from complying super funds regulated by APRA.
- Money transferred cannot be used to purchase your first home, like you can with KiwiSaver (although you can withdraw subsequent investment growth on the capital).
- Money can be accessed when the member reaches Australia’s retirement age (currently 60 years old) and satisfies the Australian definition of “retired”.
- New Zealand rules for significant financial hardship or compassionate grounds such as serious illness apply.
How do I transfer money between KiwiSaver and Australian super?
It depends on whether you are transferring from New Zealand to Australia, or from Australia to New Zealand. This is the $64,000 question. When these rules first came in, KiwiSaver and Aussie super schemes weren’t ready to receive the money.
New Zealand to Australia. Moving your KiwiSaver to Australia can be more difficult than going the other way, because Aussie super funds aren’t required to accept the money. Only a handful of providers over the ditch are prepared to receive your KiwiSaver money.
At the time of writing we are aware of a few super funds that may accept your money, but always check first: WA Super, First Super, and Lucrf Super. There may be conditions that apply, e.g. you must be a member of the fund, or you must have a minimum of 6 months’ worth of employer contributions ready to be transferred.
More Aussie super funds may accept KiwiSaver in the future. There is more information from the Australian Tax Office (ATO) here.
Australia to New Zealand. It is becoming more common now and the chances are that your KiwiSaver fund of choice will be prepared accept your Australian super. But do check.
The first thing you need to do is track down your Australian super. If you have worked in Australia any time since 1992 you will have some super savings. If you don’t have the details of your investment, go to the Australian Tax Office (ATO) online tool, SuperSeeker at: www.ato.gov.au/superseeker If you don’t have the details you need to look it up online, you can print off a lost super form and sent it to the ATO. Be aware that you may have multiple accounts in Australia and you might need to consolidate them into one to make the country-to-country transfer easier.
You also need to check if it’s a complying fund, because not all Australian super funds can be transferred into KiwiSaver. You can check your fund here: http://superfundlookup.gov.au/
Get financial advice about switching your retirement savings
Moving your nest egg overseas isn’t a straightforward decision. There are some fish-hooks involved in both staying and going. It’s a good idea to seek independent financial advice before making the move.
In New Zealand, you are best off talking to an Authorised Financial Adviser (AFA), rather than your bank or a Registered Financial Adviser (RFA) who have lesser regulatory requirements to provide fully independent advice.
What are the pros of transferring your retirement savings?
Having all your money in one retirement fund makes it easier to track.
If you have your retirement savings in the country you live in, then you’re less likely to be affected by exchange rate movements between countries A and B.
What are the cons of moving your retirement savings?
There may be exit fees charged by your fund. If you’re consolidating more than one Australian super fund, you could be hit with these fees several times over.
You may lose insurance entitlements by transferring from Australia to New Zealand. These insurances often include death cover (life insurance), total and permanent disablement (TPD), and/or income protection insurance. It may not have covered you outside of Australia anyway, so do read the fine print. You can find out more about this on the CANSTAR website and on the MoneySmart website.
Your savings will be taxed at a different rate in New Zealand or Australia. This could affect your overall balance. The tax rates are complex to compare. Both income and capital gains are taxed at 15% on Australian super funds. Only income is taxed on KiwiSaver, but the rate for many people is typically higher for most people, at 17.5% or 28%, with very low income earners paying just 10.5%.
The exchange rate might not be in your favour at the time of transfer.
What’s the problem with leaving it behind?
There’s no real problem with leaving your money behind in either country. You could just access it when you retire. In some ways it spreads your risk by having two totally different retirement funds based in different economies, with different investments in them.
There are some potential downsides, however. They include:
- The saying “out of sight, out of mind” may apply. It’s very easy to fail to keep up with investments held overseas.
- If you move and forget to tell your provider in the other country, you could lose track of your nest egg there – although it will always be yours.
I want to switch. What do I do?
Australia to New Zealand. If you’re moving your money from Australia to New Zealand, contact your KiwiSaver provider of choice. If they offer trans-Tasman portability, they’ll give you two forms to complete and return. They are the: Obtaining Information – Australian Complying Superannuation Fund form, and the Authority to Act Declaration form. You’ll then receive a transfer form from your Australian super provider in the mail. Once you’ve returned this to your KiwiSaver provider with the other necessary documents, your KiwiSaver provider will do the rest for you.
New Zealand to Australia. If you’re moving your KiwiSaver to Australia, make sure you find an appropriate superannuation fund before you start the move and check that it accepts KiwiSaver switches. Be very careful, as your KiwiSaver transfer will be treated as non-concessional (after tax) contributions and may be subject to excess contributions tax if you transfer more than the annual non-concessional contribution cap.
Source: Australian Taxation Office (ATO)