KiwiSaver Amendment Regulations (No 2) 2012

Explanatory note

This note is not part of the regulations, but is intended to indicate their general effect.

These regulations, which come into force on 1 November 2012, prescribe a provision to be implied in the trust deed of all KiwiSaver schemes. The provision imposes a duty on the trustees or the manager of the KiwiSaver scheme (as the case may be) to ensure that the value attributable to a member's KiwiSaver accumulation is credited to the member's KiwiSaver account and not received as an external financial advantage.

The purpose of the regulations is to ensure that contributions, and the investment returns that would normally arise on those contributions, remain locked in until withdrawal in accordance with the KiwiSaver Act 2006, and that the benefits payable to members of KiwiSaver schemes at the end of the lock-in are not adversely affected by pre-retirement financial advantages that result from KiwiSaver contributions, but that are not credited to the members' KiwiSaver accounts.

The regulations will prevent arrangements such as nil-return investment policies for KiwiSaver schemes that are linked to external financial advantages, such as mortgage off-set.