Retirement Planning for most New Zealand residents consists predominantly of the State Pension, known as New Zealand Superannuation. As it is often not sufficient for a basic standard of living in retirement, many residents make their own retirement provision using KiwiSaver and personal Superannuation. The IVCM (NZ) PIE Superannuation Fund is a personal superannuation fund.
KiwiSaver only offers tax incentives for New Zealand residents and these are at low levels resulting in most New Zealand residents turning to alternative structures for their retirement savings. Also, KiwiSavers do not qualify as ROPS and therefore should not accept UK pension transfers.
In New Zealand, the earnings and growth within a Superannuation Fund are generally subject to tax if you are a New Zealand resident. When you start to draw benefits from the Super however, these payments are not subject to tax as the member has paid ongoing tax within the Super scheme. This is great for non-NZ residents as they have a Prescribed Investor Rate (PIR) of 0% – so earnings are free of NZ taxation and future payments out of the scheme are free of NZ taxation.
Pensions in some countries, particularly the UK, Malta, Gibraltar and South Africa, can usually be easily transferred to New Zealand. IVCM have lots of experience in the transfer of existing pension schemes and navigating the New Zealand tax rules, and the rules of overseas pensions providers can be complex so please contact us for more information.
If a New Zealand resident holds an overseas pension, in most cases it’ll be subject to New Zealand income tax. Tax on overseas pensions is complex but there is information available on this from the Inland Revenue department. You may also have to pay tax on gains made by the overseas fund which provides the pension, as well as tax on the income you receive. If you’d like a referral to an Authorised Financial Adviser in New Zealand to discuss these complex tax issues – please ask.