Summary of Employer’s Role and Responsibilities
(continued from Clarke Craw’s winter newsletter)
Employers will play a significant role in KiwiSaver and will have many obligations as well as choices. The following is a brief summary of the main responsibilities and options an employer may have:
Employers must:
- Determine whether new employees must be automatically enrolled. Issues to consider:
? Are they already a KiwiSaver member?
? Are they a
? Are they normally living in
? Are they 18 or over?
? Are they under 65?
? Are they a temporary employee or casual agricultural worker?
? Are they an election day worker or private domestic worker?
? Are they receiving parental leave payments from Inland Revenue?
? Are they staying on the same payroll?
? Are they only receiving payments subject to withholding tax or not required to have PAYE deducted from their salary or wages?
- Act on “opt in” requests from existing employees
? Must be between ages of 18-64 inclusive and meet other eligibility requirements.
· Advise Inland Revenue details of new employees and existing employees who “opt in” (by giving a KS 2 KiwiSaver deduction form) by using a KS 1 KiwiSaver employee details form or by ir-File.
· Maintain a stock of KS 3 KiwiSaver employee information packs and distribute them to:
? All new employees within 7 days of starting new employment;
? Existing employees who give the employee a KS 2 KiwiSaver deduction form within 7 days of receiving such form.
? Existing employees who request one in contemplation of opting in.
- Supply to employees who receive KS 3 information pack a copy of investment statement for the employers chosen scheme (if employer has chosen such a scheme) together with a statement that if the employee does not choose their own scheme they will be allocated to one of the default providers.
- Make deductions of employee contributions at either 4% or 8% and remit to Inland Revenue:
? From first pay for new employees
? From next pay upon receiving KS 2 KiwiSaver deduction notice from an existing employee or notice from the Commissioner where an employee has contracted directly with a KiwiSaver scheme provider.
· Act on KS 10 New employee opt out requests.
? Must be within 2-8 weeks of commencement of employment unless Commissioner accepts late notice.
· Act on contribution holiday notices – cease making deductions
· Start or stop making deductions as advised by Inland Revenue.
· Make compulsory employer contributions as from
Employers can:
- Choose a KiwiSaver scheme for their employees. Employees who do not choose their own KiwiSaver scheme will be allocated to the employer’s chosen scheme rather than a default scheme allocated by the Commissioner.
- Make voluntary employer contributions from
- Facilitate contributions by employees in excess of the standard contribution rates.
Employers shouldn’t:
- Give investment advice to employees including recommending any particular KiwiSaver scheme. However an employer who:
? Chooses a scheme for employees who don’t make an active choice; and
? Distributes an investment statement in relation to that scheme
is not giving investment advice and will not be regarded as an issuer or promoter under the Securities Act in respect of the scheme.
We have attached an extract from the Herald, dated 4 July 2007, showing a comparison of the different KiwiSaver providers:
You will also find below a Power Point presentation which Clarke Craw Ltd put together for a seminar we held on KiwiSaver. This would be a great print out for your employees to read over. For more information on KiwiSaver please call us on 477-0032.
Below we have provided a link to Sorted.org.nz's website where a you will find a KiwiSaver calculator which will help you to understand your contributions. This can be found by clicking on: http://www.sorted.org.nz/calculators/kiwisaver-quick-calc
