The ability to move pensions across the Tasman is finally here and provides new opportunities for advisers.
Thursday, June 6th 2013, 7:05AM
Grosvenor Financial Services' Andrew Lendnal says that trans-Tasman portability of superannuation funds will provide a big boost to New Zealand advisers with KiwiSaver clients.
The Australian Government has announced it has completed the legislative steps needed to allow New Zealanders to transfer their retirement savings between complying Australian super schemes and KiwiSaver.
New Zealand’s side of the deal has been sorted for several years.
The arrangements are due to take effect from July 1.
Australia’s Tax Office has estimated that there is about A$17.7 billion ($21 billion) in “lost accounts” in the Australian superannuation system. There are many more people who know where their accounts are but have not been able to bring them home.
Revenue minister Peter Dunne said: “We expect that some of this money belongs to New Zealanders who have returned home and these new rules will allow these funds to be brought back to New Zealand.”
Lendnal said Grosvenor had been working towards portability since 2009, when it established Super Tracker. It enables advisers and clients to track down any entitlement owing in Australia.
He said a database of thousands of people who could benefit had been drawn up and more advisers had been calling about the system over the past few months. “The number of inquiries has been significant.”
Lendnal said Grosvenor had found that the average super balance of Kiwis who had worked in Australia and returned was about $20,000 – a big boost to the $6000 to $7000 average balance that is estimated in KiwiSaver at the moment. “These clients aren’t worried too much about tax benefits, they just want that money closer to home and to incorporate it into their KiwiSaver,” Lendnal said.
He said it was a big opportunity for advisers. “If you’ve got another A$10,000 to A$20,000 coming across, that’s another $24,000. Balances will increase and people will start to think about them in a bit more detail.”
Lendnal said such clients would also be more profitable for advisers to look after.
Retirement savings transferred from Australia into a New Zealand KiwiSaver scheme can be withdrawn when members reach the age of 60 if they meet the definition of being retired as set out under the Australian Scheme rules.
