Individual Retirement Plan - Partners in building your financial future

Current IRP members
Latest News

You may be aware that the Plan's Administration Manager is changing from Jacques Martin to Mercer (N.Z.) Limited. The change was due to take place as at 1 August 2008, but due to unforseen circumstances the transfer date has been delayed, provisionally to 1 September 2008. We will advise you when the date is confirmed - in the meantime, please continue to contact Jacques Martin on 0800 477 111 with any administration queries.

Webinar and Budget Planner now online!

Webinars are short online seminars presented by members of our wealth education team. The first in our series is entitled "Budgeting and Debt Management," and is designed to help you with something that is a challenge for many of us - namely creating a budget and sticking to it! This short presentation is designed to give you the basic tools you need, while also providing useful tips about helping you to manage debt. Click here to view the webinar.

Also now online is a useful budget planning tool. Click here to try it out!

KiwiSaver is the government's new savings scheme, designed to help Kiwis to save for their retirements. KiwiSaver is due to begin on 1 July 2007 - to find out more, click one of the links below.
Click here for webinar - audio only
Click here for webinar - video and audio

Tax on investment income to reduce
From 1 April 2008, tax on the investment income of registered superannuation schemes such as your Plan will reduce from 33% to 30%.

KiwiSaver update
Changes to KiwiSaver were finalised under legislation passed in December 2007. The major changes are:

Compulsory employer contributions
From 1 April 2008, most employers will be required to match the contributions of employees who are members of KiwiSaver or a complying fund. The level of contribution will be phased in over four years, starting at 1% of an employee’s gross salary or wage from 1 April 2008, rising to 4% by 1 April 2011. Subject to certain conditions, compulsory employer contributions may be reduced by contributions made to another registered superannuation scheme.

To offset contributions, employers will receive a tax credit of up to $20 per week per employee. Initially, an employer’s compulsory contributions must be on top of their employees’ regular pay. This applies despite any agreement the employer may have made before 13 December 2007. But after that date employers can offset their contribution against pay movements, as long as this is negotiated in good faith.

2 + 2 arrangements
While an employee is usually required to contribute a minimum of 4% of their gross salary or wage, with their employer’s agreement, up until March 2010 an employee’s contribution can be made up of 2% from their salary and 2% matched by their employer. From April 2010 the employee and the employer will both need to contribute 3%, rising to 4% each from April 2011 onwards.

First home buyer criteria
If Housing New Zealand Corporation determines that a previous home owner is in the same financial situation as a first time buyer, they may also be eligible for the first home withdrawal.

After being a member of KiwiSaver for three years, eligible first home and previous home buyers may be able to withdraw all or part of their savings, including any voluntary employer contributions with vesting restrictions but excluding the $1,000 government kick-start and the member tax credit, to put towards buying their home. If they’ve been contributing around 4% of their income to KiwiSaver or another approved superannuation scheme, they may also be entitled to a first home deposit subsidy.

Other amendments
The legislation also amended:

the definition of salary and wages,
the residency requirements for people joining KiwiSaver, and
the criteria and amount payable for a serious illness withdrawal.

For further information about KiwiSaver, visit the website www.kiwisaver.govt.nz

For further information about KiwiSaver, visit Mercer's KiwiSaver mini-site at www.mercerhr.co.nz/kiwisaver/ or http://www.kiwisaver.govt.nz/ .

You can also view our Kiwisaver Webinar by clicking one of the links below.
Click here for webinar - audio only
Click here for webinar - video and audio

Some of the details of KiwiSaver and its implications for existing schemes are still under discussion. As further details become available, the employers will evaluate KiwiSaver’s impact on the scheme and, after discussion with the Trustees, communicate the necessary information to members.

Change of address

Changed address recently? You need to make sure that you tell the trustees of the IRP of any changes to your personal details - in particular any change of mailing address (in fact you have an ongoing responsibility to make sure you tell us).You can update your address details on-line right here through the “Current IRP Members” section. This links you directly to the IRP Administration Manager's website for the Plan and your details on the administration system. To update your address details you will need to sign into the website with your IRP personal member contract number and password.

Alternatively you can print off and complete a Change of Member Details Form [PDF]. Then return this form to the IRP Administration Manager, Jacques Martin New Zealand Limited PO Box 606, Wellington.

Breaking up is hard to do…

Legislation that took effect from 1 February 2002 may affect your superannuation benefits.

The Property (Relationships) 1976 Act (Act) applies to anyone who is married or lives in a de facto relationship. A de facto relationship includes relationships between people of the same sex.

If the partners split up after they have been living together for at least three years, then the property built up during the relationship will usually be shared equally between them.

Superannuation accumulated during the course of the relationship is included as relationship property. This is different from the Matrimonial Property Act, which required the whole value to be shared, including any value built up before the relationship began.

The Act also affects the benefit payable where a member dies in service. The member’s spouse or partner now has the option to make a claim under the Act and this may impact upon the payment of the death benefit, which may be considered as relationship property. The claim must be made within six months of the date of death or the date of the grant of probate or grant of administration of the estate in New Zealand, depending on the size of the estate.

Before any death benefit is paid out, the Trustees must satisfy themselves that there are no other potential claimants under the Act. As a result, payment of any death benefit may be deferred until the expiry of the six month period or the outcome of any claim. Although the Trustees will continue to take nominated recipients into consideration, any nomination of recipients form may be overridden by a claim under the Act.

If both parties agree not to share everything equally, it is possible to enter into a contracting-out agreement.

Members considering entering into a contracting-out agreement will need to have the agreement certified and witnessed by a separate lawyer for each partner before it is valid.

This is only a very brief summary of the Act. If you have any questions or concerns about the legislation, you are urged to take independent legal advice. This summary cannot be construed as legal advice and should not be relied upon as such.

Are you well-placed for a comfortable retirement?

For an indication of the lump sum you are likely to need to maintain a lifestyle similar to the one you currently enjoy, check out the quick retirement calculator on the website www.sorted.co.nz. Then answer the following questions to see if you are well-placed for a comfortable retirement.