The Minister for Financial Services and Superannuation, Bill Shorten, today released draft legislation to establish a trans-Tasman retirement savings portability scheme, expected to assist the thousands of Australians and New Zealanders who move across the Tasman Sea.
"The new scheme will help Australians and New Zealanders make the most of their retirement savings, as they will be able to take their retirement savings with them across the Tasman when they move," Mr Shorten said.
"This will make it easier for people to move freely between the two countries, help consolidate their retirement savings in their country of residence and avoid paying fees and charges on accounts in the two countries."
Currently, Australians and New Zealanders working in Australia cannot take their superannuation with them when they permanently leave Australia.
New Zealanders who move to Australia will be able to consolidate their New Zealand retirement savings with their Australian superannuation benefits. About 50,000 New Zealanders moved to Australia in the last year.
Similarly, Australians moving to New Zealand, and New Zealanders returning home, will be able to consolidate their Australian benefits with their New Zealand retirement savings. About 14,000 people living in Australia moved to New Zealand in the last year.
"The scheme is intended to enhance labour mobility between Australia and New Zealand," said Mr Shorten.
"This measure is an important step in our closer economic relations with New Zealand, and supports progress toward the goal of a single economic market, to which the Australian and New Zealand Governments are committed."
The proposed legislation will permit the transfer of retirement savings between certain Australian superannuation funds and New Zealand KiwiSaver schemes.
The legislation is expected to be introduced into Parliament later this year, and is likely to take effect from 1 July 2013.
The draft legislation and explanatory memorandum can be found on the Treasury website.
Submissions on the exposure draft close on 28 September 2012.18 September 2012
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Key features of the portability scheme include:
- individuals may transfer their retirement savings between an Australian complying superannuation fund regulated by the Australian Prudential Regulation Authority and a New Zealand KiwiSaver scheme;
- participation is voluntary for members and for superannuation funds and schemes;
- retirement savings will be transferred with minimal costs;
- retirement savings will generally be subject to the rules in the host country; and
- New Zealand retirement savings transferred to Australia will be treated as non‑concessional contributions and subject to the Australian non-concessional cap arrangements at the initial point of entry.