Commissioner is optimistic that the bill would be passed
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Proposed changes to KiwiSaver in a bill introduced to Parliament will open the scheme to people over 65 years old for the first time, and enhance it for thousands of others.
Retirement Commissioner Diane Maxwell, who heads the Commission for Financial Capability (CFFC), said recommendations made in her 2016 Review of Retirement Income Policy were enacted in the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Bill.
Maxwell said the bill would allow people over 65 to join the scheme, giving them access to KiwiSaver as a provider of low-cost managed funds through retirement. It would also remove the lock-in period that required people over 60 to remain in the scheme for five years before withdrawing their money. These two changes would be effective from July 1, 2019.
To date, people over 65 cannot join KiwiSaver or move to a new scheme, although they can continue to contribute to their accounts if they are already a member. If they joined after the age of 60, they still have to wait five years before withdrawing their money.
Maxwell noted that recommendations to allow people over 65 to join KiwiSaver “would remove a policy inequity, provide another investment option for this age group, and allow employers to voluntarily make contributions for all employees over 65.”
“There is no apparent reason for those over 65 not being able to join KiwiSaver,” she said.
Other key changes on the bill include new contribution rates of 6% and 10%, reducing the maximum contributions holiday that people can take from the scheme to one year, and renaming the holiday a “savings suspension.”
Maxwell is optimistic the bill would be passed for the benefit of more New Zealanders.
