Ironically, despite ‘information’ being in the name, current legislation around KiwiSaver information packs is hazy. Although it is clear what is found in the packs, it is somewhat unclear who the packs are received by. Best practice may not coincide with legislative requirements.
A KiwiSaver information pack contains an introduction to KiwiSaver and where to access information, the deduction form, opt-out request, a statement about collection of personal information under the Privacy Act 2020, and a statement that people should seek financial advice if they want further information. The pack is a useful tool in understanding KiwiSaver rights, obligations and encouraging and continuing membership.
Under the KiwiSaver Act 2006 (the Act), employers are obligated to provide information packs to:
- Each employee who starts new employment with the employer and to whom the automatic enrolment rules apply;
- Each employee who opts in; and
- Each employee who requests an information pack in contemplation of opting in.
On face value, this appears like a comprehensive list. However, the question arises – do employers have to provide all new employees with packs, even if they are already KiwiSaver members?
Section 42 of the Act says each employee who “starts new employment with the employer and to whom the automatic enrolment rules apply” needs to be given a pack. The automatic enrolment rules apply to anyone aged over 18 and under 65, who are a New Zealand or Australian resident or residence permit holders, or are entitled to live in New Zealand indefinitely, and are not exempt (such as genuinely casual employees, or contracts for less than 28 continuous days). But does section 42 apply to all these automatically eligible people, or only those who are eligible and have not been enrolled previously?
Business New Zealand states that employers must provide KiwiSaver packs to all new employees. It does not specify automatically enrolled new employees.
Inland Revenue notes you do not have to automatically enrol new employees already in KiwiSaver. If you employ a new employee already in KiwiSaver, then they need to fill in a deduction form. However, without a previous discussion with the new employee about their KiwiSaver status, how does the employer know if their employee is a KiwiSaver member?
Although it may not be strictly required, providing all new employees with KiwiSaver packs – regardless of pre-existing KiwiSaver membership – is therefore prudent. It means that all new employees are well-informed and no eligible enrolees slip through the cracks. If employees require any further information, employers should encourage them to seek independent financial advice.
Special thanks to Law Clerk Olivia Kemp for her assistance in writing this article.
