By Amanda Morrall
New Zealanders and Australians looking to shift or repatriate workplace superannuation schemes should be able to do so effective July 2013.
The Australia Government today tabled draft legislation that will move the trans-Tasman Portability Agreement one step closer to becoming law.
Australia's Minister for Financial Services and Superannuation, Bill Shorten, in releasing the draft legislation, said the law could affect thousands of Australians and New Zealanders.
“This will make it easier for people to move freely between the two countries, help consolidate their retirement savings in their country of residence and avoid paying fees and charges on accounts in the two countries,” said Shorten.
The trans-Tasman Portability Agreement, which New Zealand passed into law years ago, will have implications for thousands of KiwiSavers as well. KiwiSavers who permanently move to Australia will lose the option of being able to withdraw their funds after emigrating. Barring the other conditions for early access to KiwiSaver, investors will be forced to remain in the scheme until the qualifying age of retirement, currently 65. (For more see KiwiSaver Q&A here).
Under Australian law, both Australians and New Zealanders working across the Tasman cannot, at present, take their superannuation with them when they permanently leave Australia.
More than 50,000 New Zealanders moved to Australia in the last annual period measured by Statistics NZ, and around 14,000 Australians moved to New Zealand.
Shorten said the ability to consolidate one's superannuation funds would be a financial and administrative benefit to investors in both countries should they move.
“The new scheme will help Australians and New Zealanders make the most of their retirement savings, as they will be able to take their retirement savings with them across the Tasman when they move,'' said Shorten.
The agreement is also hailed as an initiative that could enhance labour mobility between Australia and New Zealand.
“This measure is an important step in our closer economic relations with New Zealand, and supports progress toward the goal of a single economic market, to which the Australian and New Zealand Governments are committed.”
The legislation is expected to be introduced into the Australian Parliament later this year, and is likely to take effect from 1 July 2013, said Shorten.
Submissions on the exposure draft close on 28 September 2012.