Q. We are the parents of a couple of young children, whom we are thinking of enrolling into KiwiSaver. Before committing them to a possible lifetime of contributing to the scheme, could you please give us an idea of the options available should they, on reaching adulthood decide that Mum and Dad's "great idea" back when they were kids, is not really what they want to do with their money? With so many young New Zealanders leaving the country for good, what happens when an individual simply pulls out or stops making payments into the scheme?
A. We make many decisions on behalf of our children, such as having them vaccinated, enrolling them in pre-school, teaching them to swim and feeding them healthy food. All of these demonstrate our values.
Signing up your children to KiwiSaver could be another of those decisions.
Take a look at Inland Revenue's KS33 guide entitled KiwiSaver: A Guide for Children and Young People, which you will find on the IRD website. It is a useful guide for parents.
If you sign up your children now they will get the $1000 "kickstart" from the Government. You will need to choose a provider (ie, a fund manager who offers a KiwiSaver scheme - there are dozens to choose from) and fill out the application form in its investment statement. Look for a scheme with low fees if you do not plan to add to their investment yourself - most funds have a fixed annual member fee which can vary from $24 to $50 per year.