New Zealand Acts

KIWISAVER ACT 2006 - SECT 148

148 How 4% minimum amount may be calculated for exempt employer defined contribution schemes

1 For the purposes of section 147(1)(c) ,—

a) the minimum amount required by section 147(1)(c) may be made up—

i) entirely of contributions by the employee; or

ii) entirely of contributions by an employer; or

iii) partially of contributions by the employee and partially of contributions by an employer; and

b) the minimum amount required by section 147(1)(c) must be treated as satisfied if the sum of the following amounts is equal to at least 4% of annual gross base salary or wages:

i) the minimum prescribed amount that the employee must contribute:

ii) the maximum prescribed amount that the employer would be required to contribute if the member were to contribute the maximum prescribed amount:

c) any amount contributed to the scheme by an employer in respect of an employee does not count towards the minimum amount required by section 147(1)(c) unless—

i) the employee is legally entitled to require the employer to contribute that amount on his or her behalf; and

ii) the trust deed of the scheme provides for the minimum amount required by section 147(1)(c) to vest completely in the employee no later than the time when the employee begins his or her sixth year as a member of the scheme; and

d) any amount contributed to the scheme by an employer in respect of an employee must be calculated, for the purposes of the minimum amount required by section 147(1)(c) , before any ESCT payable under the ESCT rules is deducted.

2 Subsection (1)(b) does not limit subsection (1)(c) or (d).

ExampleCompany A provides access to a superannuation scheme for its employees. The trust deed provides that employees, if they decide to become members, must contribute at either 1% or 3% of annual gross base salary. The employer is obliged to match the employee’s contributions (eg, if employee contributes 1%, the company must contribute 1%).The scheme complies with the rule as to the 4% minimum contribution as follows:The following table is small in size and contains 2 columns without headings.Minimum amount employee member must contribute1%Maximum amount that employer must contribute in respect of employee member3%4%

Note: 2006 No 40 s 26 as at October 2011

History: Section 148: replaced, on 1 December 2014, by section 92 of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).