23 Nov 2012

Law to allow retirement funds transfer to NZ

10:26 pm on 23 November 2012

New Zealanders living in Australia will soon be able to transfer their Australian retirement savings to KiwiSaver when they return home.

The Australian Senate has passed legislation allowing the change to take effect from July 2013.

New Zealanders who work in Australia must contribute to an Australian superannuation fund and their savings are locked in until they reach retirement age.

Under the new rules, savings from certain Australian superannuation funds will be able to be transferred into New Zealand KiwiSaver funds, and vice-versa.

New Zealand's Finance Minister Bill English says negotiations for the deal were started by the previous Government. Legislation allowing for the change was passed by Parliament in September 2010.

The Australian Tax Office estimates it holds more than $A16 billion in "lost accounts" in the Australian superannuation system.

Mr English says much of this money could belong to New Zealanders who have returned home and the new rules will allow the funds to be brought back.

The Financial Services Council says the move is a major breakthough and good news for savers and KiwiSaver providers.

Chief executive Peter Neilson says it will make moving between the countries much easier, and if people keep the money in KiwiSaver accounts or investment funds in the long run, it will provide a boost to the sharemarket.