KiwiSaver for employees 

KiwiSaver works by deducting money straight from your pay and putting it into a fund of your choice. It works like PAYE, and uses the PAYE system to get your money to Inland Revenue.

Your employer is responsible for providing you with information on KiwiSaver. If you are enrolled or sign up they'll manage your contributions and send them through to Inland Revenue to your chosen KiwiSaver scheme. Your employer is currently required to make a minimum contribution to your TOWER KiwiSaver Scheme account of 2% of your gross salary or wages. (subject to certain exceptions, refer to the TOWER KiwiSaver Scheme investment statement for further details). In the 2011 Budget it has been proposed that the minimum employer contribution rate for all new and existing members will rise to 3% from to April 2013.

You have a lot of choice when it comes to KiwiSaver, including who you want to look after your money. If you don't choose a provider, Inland Revenue will choose a default provider for you. Your employer may also choose a provider.

There are six default providers including TOWER, but it's much better for you to choose your own KiwiSaver provider.

If you start a new job you are automatically enrolled in KiwiSaver, however you can opt out between week 2 and week 8 of your employment, and any contributions you've made will be refunded to you.

When you first enrol in KiwiSaver the Government will give your KiwiSaver scheme a $1,000 kick start to help get you going.

If you are between 18 and the age of eligibility for a retirement benefit from KiwiSaver, the Government will currently contribute 50 cents for every $1 (dollar) you contribute, up to a maximum of $521.43 per year, subject to qualifying criteria.

It is also now compulsory for employers to make contributions into their staff's KiwiSaver Scheme accounts, if you are over 18 years old the current minimum employer contribution rate. In the 2011 Budget it has been proposed that the minimum employee contribution rate for all new and existing members will rise to 3% from 1 April 2013.

Your employer can contribute more than the minimum if they wish.

As long as you meet certain criteria, you can also use your TOWER KiwiSaver Scheme savings to put towards the purchase of your first home.

KiwiSaver is a long term retirement savings scheme. This means contributions are generally locked in until you're eligible for NZ Super (which is age 65 at the moment), or until you have been a member of a KiwiSaver scheme for five years – whichever is the later ('retirement age').

After that, you can choose to withdraw part or all of your savings as a lump sum, or you can make regular withdrawals, or you can simply continue saving.

You may be able to cash in a portion of your investment in KiwiSaver (which may or may not include the $1000 Government kick-start and member tax credit) prior to reaching retirement age. These circumstances are:

• Where any Legislation/court order requires a withdrawal to be made
• For the purchase of a first home (subject to meeting qualifying criteria)
• Upon your death
• Where you suffer or are likely to suffer from significant financial hardship, or are suffering from a serious illness and satisfactory evidence has been provided and accepted by the Trustee
• Where you are permanently emigrating* (no earlier than 1 year after your permanent emigration from New Zealand, satisfactory proof will need to be provided and accepted by the Trustee)

When cashing in your investment, any member tax credits are not payable if your withdrawal is for permanent emigration, or where your permanent residence was outside New Zealand but you had received the member tax credit for that period. You cannot access the $1000 Government kick-start or your member tax credit if you wish to make a withdrawal due to significant financial hardship or for the purchase of your first home. The $1000 Government kick start contribution and member tax credit will be payable on a withdrawal for serious illness. You may not charge or borrow against the security of your KiwiSaver balance.

* Legislation has been passed, which once in effect, will not permit KiwiSaver members to withdraw their balance from the TOWER KiwiSaver Scheme where they permanently emigrate to Australia. Instead, such members will only be able to transfer their scheme entitlement to certain qualifying Australian superannuation schemes. This change is expected to come into effect in late 2011. As at 19 September 2011 no specific date can be provided as the legislation relies on equivalent legislation in Australia being passed. For further information please call TOWER on 0800 379 372.

The TOWER KiwiSaver Scheme offers heaps!

With the TOWER KiwiSaver Scheme you may be eligible for all the benefits of a KiwiSaver scheme. These include:

• $1,000 kick-start from the Government when you first join KiwiSaver
• Compulsory employer contributions (subject to certain exceptions)
• A member tax credit based on a 50 cent subsidy from the Government for each $1 (dollar) you contribute (up to $521.43) paid into your TOWER KiwiSaver Scheme each year (subject to qualifying criteria)
• First home buyer's deposit subsidy after three years, to a maximum of $5,000 after 5 years' contributions (subject to qualifying criteria)
• Withdrawal of your and your employer's contributions to purchase your first home after 3 years membership (subject to qualifying criteria).
• We'll give you five investment choices that are easy to understand and we can provide you with access to other benefits, such as health and life insurance.
  

You'll also have 24 hour access to information about how your savings are performing, right here through this website!