Two years before savings flow back across Tasman

It’s predicted Australian super schemes won’t be properly set up to accept New Zealanders’ KiwiSaver savings for a couple of years.

Wednesday, April 2nd 2014, 6:01AM

by Susan Edmunds

Allan Rickerby is an adviser who operates on both sides of the Tasman. His company, Super Advice Services, specialises in helping New Zealanders navigate the new transtasman portability of superannuation savings.

Savings can be moved from Australian superannuation accounts to KiwiSaver funds when people migrate or return to New Zealand after working in Australia.

Money can also be transferred the other way, for people who have savings in KiwiSaver and then move to Australia, but so far that hasn’t been happening.

Rickerby said the funds in Australia were not set up to accept money yet and the balances that would be transferred were not big enough to make setting up systems a priority.

“The smarter ones will do it but at the moment they’re grappling with over regulation.”

He said the funds would want to deal with all the legislative changes that were currently on their plates before they delved into offering more portability. “It won’t pop up on their radar for another year or two.”

Rickerby said there had been some confusion on this side of the Tasman around the tax rules on overseas pensions.

As of yesterday, foreign superannuation lump sum payments had to be declared as income and were taxable. But there was an amnesty window available to people who applied to transfer their super accounts before March 31.

But Rickerby said there had not been enough publicity about the fact that did not apply to savings moving between Australia and New Zealand. He said he had received a lot of calls, even from advisers.

“People don’t really understand what’s going on. A lot of people have decided to hold on to their Australian super for now and they were worried they’d be caught up in this.”

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