If ever there was a word that needed to be retired it is retirement. What kind of mental picture does this word invoke up for you? Is it sunny beaches and no longer having to set an alarm clock? Or a stressful feeling about how much longer you will need to work to afford such a lifestyle?
Canny View: Super 65 (or 67?)
It may only be over 100 years ago, but life in the 1900s would be considered brutal by today’s standards. Lights in your home might be candle or gas. Fridge, freezer well they didn’t exist. Indoor plumbing? If you were lucky. Things have changed since then. In simple terms every 10 years our life expectancy has increased by 2 years.
When does the underarm stop for Kiwis?
Currently in Australia there is more than $17 billion in unclaimed superannuation, which is not an insignificant sum of money, and we anticipate that a large proportion of these funds belongs to Kiwis.
Is your Australian Personal Insurance Paid out of your Super?
Currently there is over $17 billion dollars in unclaimed superannuation, which is not an insignificant sum of money and we anticipate that a large proportion of these funds are for Kiwis. The cordial relationship we have with our closest neighbors, (outside of the rugby pitch!) means that we enjoy the opportunity to live in each other’s back yard. With golden beaches and a warmer climate there are estimated to be over 500,000 Kiwis living in Australia, and a larger number who have lived and worked there, before heading back to the land of the long white cloud.
Whilst NZ was a little slow off the mark with setting up KiwiSaver in 2007, Australia was ahead of the curve. Australia enforced compulsory superannuation in 1992, building on the superannuation system they had in place for union members, whereas KiwiSaver is still not compulsory.
One of the interesting side effects of superannuation in Australia is the tie with personal insurance, such as life and income protection. Approximately 87% of all insurance policies in Australia are written on the back of compulsory superannuation with insurance premiums paid directly from the member’s super fund. In NZ, the KiwiSaver act governing KiwiSaver schemes prevent this occurring.
For the returning Kiwis that we meet, who have Australian superannuation, they are aware of the insurance cover they have in place in Australia. Unfortunately, they could be paying for something that does not exist. Most of the insurance policies that we’ve read through have clauses that mean once you have left Australia, are no longer a resident of Australia, or have not been a resident for two years, then you are no longer eligible for the insurance cover.
Even though you are no longer covered doesn’t mean you stop paying for the cover. If you didn’t know the policy rules and haven’t opted out of your insurance, the premiums will continue to be taken out of your super fund. We can’t let this underarm incident to continue.
If you are no longer in Australia and not contributing to your superannuation funds, these insurance premiums will reduce the return on your funds until you either cancel them or bring your funds back to New Zealand. Ultimately, this could lead to those funds whittling away to nothing, while our Australian cousins take funds off you for something that doesn’t really exist, laughing all the way to the bank. This, along with the other benefits of reduced costs and greater control of your retirement funds mean 'why wait'? You should be looking to transfer your Australian super back to New Zealand today.
Get in touch with your KiwiSaver adviser to get the process underway and if in doubt, call the Australian Super specialists at Stewart Group for a no obligation discussion on your situation.
