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Trans-Tasman Pension Scheme Backed In Australia

by Mary Swire,, Hong Kong

29 November 2012

The Australian parliament has passed legislation which will establish a trans-Tasman retirement savings portability scheme, designed to assist migrant workers.

According to Australia's Minister for Financial Services and Superannuation, Bill Shorten, the Superannuation Legislation Amendment (New Zealand Arrangement) Bill 2012, removes a barrier to labor mobility between Australia and New Zealand.

Currently, Australians and New Zealanders working in Australia cannot take their superannuation with them when they permanently leave the country. Approximately 50,000 New Zealanders moved to Australia in the last year, while around 14,000 Australian residents went to New Zealand. Under the new system, workers will be able to consolidate their retirement savings in their country of residence and avoid paying fees and charges on accounts in the two countries.

Under the new scheme, New Zealanders moving to Australia will be able to transfer their KiwiSaver scheme savings to Australia and add them to their Australian superannuation benefits. Similarly, Australians moving to New Zealand, and New Zealanders returning home, will be able to take their Australian benefits with them. New Zealand retirement savings transferred to Australia will be treated as non-concessional contributions and will be subject to the Australian non-concessional cap arrangements at the initial point of entry. Participation will be voluntary for members and for superannuation funds and schemes, and retirement savings will generally be subject to the rules in the host country.

Shorten sees the legislation as supporting progress toward the goal of a single economic market with New Zealand. His comments were echoed by Bill English, his New Zealand counterpart, who said that the legislation will further strengthen the wider bilateral Closer Economic Relations agreement.

The legislation is scheduled to commence on July 1, 2013.

TAGS: individuals | pensions | law | financial services | employees | retirement | Australia | fees | agreements | legislation | New Zealand | services

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