New Zealand and Australia's memorandum of understanding on retirement savings will allow pensions to be transferred between the two countries, Finance Minister Bill English and Treasurer Wayne Swan said today.
The agreement would make it easier for people to move freely between the two countries and help to return 'lost' retirement savings, they said in a joint statement after talks in Brisbane. Currently when New Zealanders work in Australia and move back their compulsory retirement savings are left behind. Australia's Tax Office estimated last year it had about AUD13bn (NZD16.6bn) in the 'lost' accounts in the Australian superannuation system, with a huge proportion of the money belonging to New Zealanders. Under the portability agreement, transfers will be allowed between certain Australian superannuation funds and New Zealand KiwiSaver funds. Participation will be voluntary and legislation has to be passed before the agreement can come into effect.
"We do see this as an important initiative in progressing our broader aim of a seamless market economy between the two countries," Mr Swan said at the announcement. "There is a discussion between our prime ministers later in the year where they outline a future agenda with further progress in the area of the single economic market and harmonisation and alignment across various policy areas." The new Australia-New Zealand tax treaty was finalised and they discussed the work being done to harmonise regulations.
A comprehensive report in our Intelligence Report series titled "The Lowtax International Pensions Report" which has an in depth view on The Mechanics of Pensions Provision, 'High-Tax' Country Pension Regimes and 'Lowtax' Jurisdictions In Which To Locate Pensions Savings, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report14.asp
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