KiwiSaver the Government's new work-based savings scheme

The KiwiSaver Bill had its first reading in Parliament on 28 February 2006 and is expected to receive its final assent later this year with implementation of the scheme by 1 April 2007.

KiwiSaver is a Government-sponsored work-based savings scheme. On retirement, KiwiSaver rewards an employee with the savings contributed over the years, together with any return on the investment made.

This type of scheme differs from pension-based schemes that are (or were previously) operative in New Zealand such as the Government Superannuation Fund.

As a savings-based scheme, KiwiSaver will complement the pensions currently paid under NZ Super, so KiwiSaver participants could enjoy a higher standard of living during their twilight years than they would on the NZ Super pension alone.

KiwiSaver is a voluntary scheme. Employers are required to offer the scheme to employees - but workers can "opt out". For those employees that do opt in, the employer is not obliged to make any contributions to savings.

For further information

For further information on the KiwiSaver, please read the following articles on Bell Gully's website:

• KiwiSaver: You know it makes sense by Andrew Scott-Howman, Partner
• KiwiSaver a Super Tool by Mark Todd, Partner.

For more details on the KiwiSaver scheme and a copy of the Bill, please visit the Treasury's website at www.treasury.govt.nz.

Enquiries and information

For more information on any of the cases, articles and features in Commercial Quarterly, please email Diane Graham or call her on 64 9 916 8849.