Media Release 21 July 2008

KiwiSaver decision-making one year down the track

The Retirement Commissioner Diana Crossan says now that KiwiSaver has been in place for one year, sorted.org.nz has been updated to answer some key questions like: can I still afford KiwiSaver, and should I change schemes?

“These are the types of questions we are hearing from people and so we have updated Sorted to assist them to make informed decisions about future savings.

“There are a number of options for anyone finding it difficult to keep up with payments and these are explained on Sorted.

“For example, if you have been in KiwiSaver for a year, you might be able to put your payments on hold (this is called taking a ‘contributions holiday’). From next month, you may also be able to divert half your KiwiSaver contributions to mortgage repayments on your home, if your KiwiSaver scheme and mortgage lender agree,” said Diana Crossan.

Current members can also change schemes at any time and Sorted provides a checklist to help people work out the right decision for them.

Anyone thinking about joining KiwiSaver can also get independent help on sorted.org.nz.

“Potential members can get answers to five key questions: How much will KiwiSaver cost, how much can I save, should I pay off debt first, what fees do each scheme charge, and how do I choose a fund?”, said Diana Crossan.

The online decision making tools and information about joining KiwiSaver include the Quick KiwiSaver calculator, KiwiSaver Decision Guide and KiwiSaver fees calculator.

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21 July 2008

Examples of updated information about KiwiSaver on sorted.org.nz

Can you still afford KiwiSaver?

• If you are an employee and have been a member for a year or more, you can put your payments on hold for between three months and five years by taking what’s called a ‘contributions holiday’.

• If you’ve been a member for less than 12 months, and if you suffer or are likely to suffer financial hardship you may be eligible for an early contributions holiday. Financial hardship is defined on the Inland Revenue KiwiSaver website www.kiwisaver.govt.nz

• If you’re self-employed or not working, you will need to talk to your scheme provider to negotiate a savings break or reduce the amount of your payments.

• After paying in for 12 months you may be able to divert up to half of your KiwiSaver contributions to mortgage payments on the home you live in (not an investment property). Check with your scheme provider and mortgage lender.

• Are you thinking about changing KiwiSaver Schemes?

• There are several reasons why you may want to change schemes or providers. There is a checklist on sorted.org.nz to help you make an informed decision.

• You can change KiwiSaver schemes at any time by contacting a scheme provider directly. Note that you can only belong to one KiwiSaver scheme at a time, and you may be charged a transfer fee by your current scheme providers.

• You can also change funds within your current provider for example from a low to a higher risk fund.

NOTE: For more detailed answers to these questions go to www.sorted.org.nz

Sorted also has decision making tools and information for those thinking about joining KiwiSaver, including the Quick KiwiSaver calculator and the KiwiSaver Decision Guide.

ENDS

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