As expected, the 2011 Budget announced changes to the very popular KiwiSaver scheme which now has over 1.68 million members and is growing at a rate of around 20,000 new members a month. The Government has stated that KiwiSaver is unaffordable in its current form, and in order to reduce government debt, components of KiwiSaver need to change.

What are the changes?

There are three main changes to KiwiSaver that will be implemented progressively:

1. The maximum Member Tax Credit (MTC) will be halved from $1 to 50c for every dollar a member contributes, up to a maximum of $521.43 per annum. To be eligible to receive the maximum MTC members still need to contribute at least $1,042.86 per annum.
   This change will relate to contributions made from 30 June 2011 onwards, but because the MTC is paid annually in arrears, members will not receive the new MTC amount until after 30 June 2012.
2. Currently, contributions from employers of 2% of an employee's gross salary or wages are exempt from Employer Superannuation Contribution Tax (ESCT ). From 1 April 2012, all contributions from employers will be subject to ESCT at the employee's marginal tax rate.
3. From 1 April 2013, it is proposed that the minimum employee and employer contributions will rise from 2% to 3% of an employee's gross salary or wages.

Whilst these changes may sound negative, the reality is that KiwiSaver still provides generous incentives and remains a robust retirement savings scheme. All Kiwis who are eligible should actively consider joining, and likewise existing members should not be discouraged by these changes.

KiwiSaver remains a great way to save for retirement. Here are a few reasons why:

The Governments Member Tax Credit is "money for jam"

To take maximum advantage of the Government's Member Tax Credit to your KiwiSaver account make sure you have contributed the minimum $1,042.86 before the end of June 2011.

The oddly named "Member Tax Credit" has nothing to do with your tax return. It is simply contribution from the Government that matches contributions you have made during the year ended 30 June, up to a maximum of $1,042.86. All you have to do is make sure you've contributed.

Under the  recently announced changes this is probably the last year you will get a $1 for $1 contribution from the Government from next year you'll probably only get 50c per dollar you contribute, up to the maximum. Still a lot better than nothing.

If you need help call us on 07 578 3863. Please have available your account provider and account number.

Click here to view a copy of the OnePath SIL Kiwisaver Scheme Investment Statement

Money for Jam!

If you are retired you can still take advantage of KiwiSaver as long as you under 65 years of age.

If you are retired you wont get employer contributions but the Government will still give you $1,000 kick start when you first join.

You agree with your KiwiSaver provider how much you want to contribute, and make payments directly to them. And as some KiwiSaver providers will let you open an account without making any contributions you don't have to contribute anything.

That's right you can join KiwiSaver and You don't have to put in anything and the Government will put in $1,000.

For more information email your contact details to This email address is being protected from spambots. You need JavaScript enabled to view it. or phone us on 07 578 3863.

Do you want to buy your first home?

Have you been a member of KiwiSaver for at least three years?

Did you know that after three years you can withdraw all but the Government’s contributions from your KiwiSaver and use them to buy your first home?

Did you know you can also get a First Home Deposit subsidy of $1,000 per year of Kiwisaver membership from Housing New Zealand?

Do you want to know more? Email your name and phone number to This email address is being protected from spambots. You need JavaScript enabled to view it. or ring us on 07 578 3863.