Australia: NZ Funds Management And Superannuation Update

Kiwisaver Amendments - Hot Off The Press
Last Updated: 17 December 2008
Article by Alasdair McBeth and Matthew Harper

Disclaimer: The Taxation (Urgent Measures and Annual Rates) Act 2008 is not yet available and therefore the information in this Update is based on the assumption that the Taxation (Urgent Measures and Annual Rates) Bill passed significantly unchanged. We will inform you if this is not the case.


The much heralded changes to the KiwiSaver regime were passed into law on 11 December 2008.


If you are a KiwiSaver provider, you need to get cracking to ensure your prospectus, investment statement and advertising materials comply with securities law before 14 February 2009. This is because 14 February 2009 is the day that the limited exemption from securities law compliance (where there is a non-compliance because of the KiwiSaver changes) will expire.


The major changes to KiwiSaver are:

  • A minimum contribution rate of 2%.
  • Compulsory employer contributions of 2%.
  • No member fee subsidy.
  • No employer tax credit.
  • ESCT exemption capped at 2%.

Employment agreements

In addition to the above changes, the September Employment Relations Act amendments, which effectively prevented employers from offering alternative remuneration to employees who are not KiwiSaver members in lieu of KiwiSaver compulsory employer contributions, have been repealed. The amendments were repealed by the Employment Relations Amendment Act, which was passed into law on 12 December 2008.

The KiwiSaver Act has been amended in conjunction with this to allow employers and employees to factor compulsory employer contributions into their employment agreements. If an employment agreement does not factor in compulsory employer contributions, these must be paid on top of the employee's gross salary or wages. This amendment to the KiwiSaver Act is back dated, taking effect from 13 December 2007.

Member tax credits

We note that there was a last minute reversal on the National Party's 2008 KiwiSaver policy in relation to member tax credits. National had originally represented that it would cap the member tax credit at 2% of a member's gross salary or wages, subject to a maximum tax credit of $1,042 per year. This would have meant that several KiwiSaver members would not receive the full $1,042 tax credit. This policy was not implemented, and the member tax credit will continue to match member contributions up to the amount of $1,042 per year.

All of the KiwiSaver changes will be in force by 1 April 2009. Below is a brief guide as to what you need to do and by when.

14 FEBRUARY 2009

As mentioned above, a limited exemption has been granted which means you have until 14 February 2009 to make the necessary changes to your scheme and disclosure documents in order to comply with securities legislation.

Prospectus amendment

Start by reviewing your prospectus to check whether it accurately reflects both the current position and the position after 1 April 2009 - it may not meet disclosure obligations as a consequence of the KiwiSaver changes.

Pay particular attention to disclosure surrounding member and employer compulsory minimum contribution rates, government contributions, fees and tax.

In all likelihood you will need to register a memorandum of amendments to your prospectus to accurately disclose the KiwiSaver changes. Remember to get in early because the Companies Office may not have capacity to deal with an influx of prospectus amendments in the first two weeks of February.

Investment statement update

It is likely that your investment statement will require similar amendments to those required for the prospectus.

If you have a current investment statement, or are in the midst of preparing one which will be used before 1 January 2009, then you are entitled to make any additional disclosures required (because of KiwiSaver changes) in the form of an insert.

The insert must:

  • Supplement the investment statement by disclosing the information necessary to update the investment statement as a consequence of the KiwiSaver changes.

The information must be contained under the same headings and in the same order as those used in the investment statement, as prescribed by the Securities Regulations.

  • Be set out in a consistent style or format.
  • Clearly identify the information disclosed as relating to the particular questions.

The insert must be prepared and issued with investment statements by 14 February 2009 at the latest. The section which allows the use of an insert ceases to have effect on 30 June 2009. Therefore all investment statements must comply with the Securities Regulations by that date.

Investment statements prepared after 1 January 2009 must be updated to include all required disclosures in accordance with the Securities Regulations by 14 February 2009.

Advertisements and other documents

Remember to think laterally. Advertisements, and even disclosure documents for your other products which contain disclosures in relation to KiwiSaver, should be reviewed to ensure that the KiwiSaver changes introduced on 11 December 2008 do not cause these documents to cease complying with securities law. If they do, for example, if the documents become misleading by virtue of the KiwiSaver changes, you must update these documents before 14 February 2009.

1 APRIL 2009

This is the date on which the changes to contribution rates, fee subsidies, tax credits and the ESCT exemption come into effect.

Ensure your trust deed and participation agreements will operate as intended in light of the KiwiSaver changes. If contribution rates are hard coded into these documents, amendments will be necessary before 1 April 2009.

Ensure your systems are ready for the 2% minimum contribution rate and the removal of the fee subsidy. This not only means IT and administration systems but also includes any application forms attached to the investment statement, and any online material.

Be mindful that contributions may fluctuate more than usual. Employees are entitled to change their contribution rate to 2% by giving notice to their employer. On the other hand, compulsory employer contributions will increase from 1% to 2%. If you are a default provider, any new members who are enrolled after 31 March 2009 will make contributions at the new minimum contribution rate of 2%.

30 JUNE 2009

The exemption which allows an insert to be used with investment statements dated before 1 January 2009 will expire on 30 June 2009. Ensure that updated investment statements are printed and distributed ready for use from 1 July.


If you need assistance with your compliance requirements, or you'd like advice about any aspect of KiwiSaver, we are available to help.

Phillips Fox has changed its name to DLA Phillips Fox because the firm entered into an exclusive alliance with DLA Piper, one of the largest legal services organisations in the world. We will retain our offices in every major commercial centre in Australia and New Zealand, with no operational change to your relationship with the firm. DLA Phillips Fox can now take your business one step further − by connecting you to a global network of legal experience, talent and knowledge.

This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances and no liability will be accepted for any losses incurred by those relying solely on this publication.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions