Arrangements for the trans-Tasman retirement savings portability scheme have been finalised today, with regulations to implement the scheme registered and diplomatic notes exchanged between the Governments of Australia and New Zealand.
The trans-Tasman retirement savings portability scheme, commencing 1 July this year, will help thousands of Australians and New Zealanders who move across the Tasman Sea each year consolidate their retirement savings.
Australians and New Zealanders in both countries will now be able to consolidate their savings in their country of residence and avoid paying fees and charges on accounts in two countries.
Currently, Australians and New Zealanders working in Australia cannot take their superannuation with them when they permanently leave Australia.
Australians moving to New Zealand, and New Zealanders returning home, will now be able to consolidate their Australian benefits with their New Zealand retirement savings.
Similarly, New Zealanders who move to Australia will be able to bring their New Zealand retirement savings with them to Australia.
Around 50,000 New Zealanders moved to Australia in the last year, and around 16,000 people living in Australia moved to New Zealand.
This scheme is an important step towards removing a barrier to labour mobility between the two countries, and supports our closer economic relations with New Zealand.
Labor has always believed that superannuation is a good long term investment for working Australians, and for the nation.
With Australians' superannuation savings pool now at $1.6 trillion, superannuation contributes significantly to Australia's employment, financial stability and economic growth as well as taking the pressure off the Age Pension.
That's why the Gillard Labor Government is boosting the superannuation of hard working Australians.
Labor's plan to increase the Superannuation Guarantee from 9 to 12 per cent will mean an extra $127,000 in retirement for a 30 year old today, earning an average full-time wage.
Tony Abbott and the Liberal Party on the other hand refuse to accept superannuation as a foundation stone of a strong Australian economy and will cut the retirement savings of hard working Australians to the bone.
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Key features of the portability scheme include:
- Individuals may transfer their retirement savings between certain Australian superannuation funds and New Zealand KiwiSaver schemes;
- Participation is voluntary for members and for superannuation funds and schemes;
- Retirement savings will generally be subject to the rules in the host country, with some specified exceptions;
- Transferred savings must be separately identifiable within the account established in the host country, to allow the application of certain source country rules;
- New Zealand retirement savings transferred to Australia will be treated as non‑concessional contributions and subject to the Australian non-concessional cap arrangements on their initial entry to the Australian superannuation system; and
- New Zealand retirement savings transferred to Australia will generally be preserved until the New Zealand superannuation qualification age, currently 65.