Initial Considerations
There are four good reasons to consider bringing your Australian superannuation to New Zealand:-
- Reduced fees - if you’ve got Australian super and KiwiSaver, you’re probably paying two sets of fees. Combining the two may reduce your overall costs.
- No entry or exit taxes - currently there are no entry or exit taxes charged when transferring your Australian super funds
- Easier management - having all your investments in one place will make keeping track of your savings easier
- Better death benefits - potentially more flexibility on who receives your fund in the event of your untimely death and without any tax issues
Before you do anything, it’s a good idea to get some financial and tax advice because different investment and insurance options, fees, currency exchange rates and tax might have an impact on your transfer.
We can provide this advice to you!
Advantages of Moving Australian Super to NZ
Keep track of your retirement savings and have more control
Our clients that have brought their Australian super back see the big advantage as having all the funds in one place, and knowing what they have. This is particularly true if you have several Australian super accounts, as well as a KiwiSaver scheme.
Save on fees
You may be paying unnecessary administration fees and insurance premiums from your Australian super – all of which can eat away at your savings.
Know how much you have in local currency
With all your retirement savings in one place, you’ll know exactly how much your retirement savings are worth in your home country.
Early retirement
You can withdraw your Australian Super funds when you turn 60, if you meet the Australian definition of retired.
Lump sum death benefits
Under Australian Super, if a lump-sum death benefit is paid to a non-dependant, part of the death benefit payment could be subject to tax.
Disadvantages of Moving Australian Super to NZ
Australian funds can't be used for KiwiSaver First Home Withdrawal
You can't use your Australian super funds to purchase your first home.
Limited diversification
In New Zealand, you are only entitled to have one KiwiSaver account so you may find yourselves with minimal investment choice, with your one chosen provider. This is especially true if you have more than one Australian Super.
Insurance cover
You might have life, illness or accident insurance associated with your Australian Superannuation. If you have insurance cover attached to your Australian super accounts, your cover will likely cease if you transfer your Australian retirement savings to a KiwiSaver scheme.
Tax and other rules
Earnings on Aussie super are taxed at a flat 15%, but there are discounts for long-term capital gains, and various tax credits associated with share income. For a growth fund, the effective tax rate might work out more like 6 or 7%. By contrast, KiwiSaver earnings are taxed at a rate of 10.5%, 17.5%, or 28%, depending on your income. While that's much higher than Australia at first glance, there's effectively no capital gains tax on local and Australian shares, which also often come with credits attached to offset dividend income. If your KiwiSaver fund mostly holds Australasian shares, you might end up paying very little tax indeed.
Not sure where your Aussie Super is?
It is estimated there is over $5 billion of Kiwis' money sitting ‘lost’ in Aussie Super with the Australia Tax Office (ATO). Aussie Super providers transfer inactive accounts to the ATO when:-
- The balance is less than $6000, and;
- There haven’t been any contributions for at least 12 months.
If your Aussie Super has been transferred to the ATO, it's still possible to transfer the money to your KiwiSaver account, but the process is slightly different. We can still help you though so let us know!
