KEY POINTS:
What is KiwiSaver?
KiwiSaver is a voluntary superannuation savings scheme which will now require compulsory employer contributions from next April.
You can join KiwiSaver by voluntarily saving either 4 per cent or 8 per cent of your income from tomorrow.
On top of your own savings, your employer must pay a further 1 per cent above your wages into your KiwiSaver account from next April, 2 per cent from April 2009, 3 per cent from April 2010 and 4 per cent from April 2011. The Government will also pay in $1000 when you open a KiwiSaver account. In general you have to keep your savings in KiwiSaver for five years or until you turn 65, whichever is later. This means that if you start saving at 64, you won't get access until you're 69.
But if you are buying your first home you can take out all your savings (except the Government's $1000 "kick-start") after three years or more to put into a deposit for a home.
If you and your partner earn below $100,000 and if you're buying a first home costing below $400,000 in Auckland and certain other high-priced cities, or $300,000 elsewhere, the Government will give you another $1000 for every year you've been contributing to KiwiSaver up to $5000. If you and your partner have been contributing to KiwiSaver for five years, that's $10,000 between you.
How do I join?
Employees aged 18 to 64: Ask your employer for an Inland Revenue KiwiSaver information pack (KS3).
Self-employed, employers, everyone outside the paid workforce or under 18: Contact any KiwiSaver provider directly or seek advice from your bank or other financial adviser.
Order a KiwiSaver application form (KS2) from 0800 KIWISAVER or download it from www.ird.govt.nz/kiwisaver/
Aged 65 or over: Cannot join.
How do I choose a provider?
Study the prospectuses available via the KiwiSaver website: www.kiwisaver.govt.nz/about-this-site/ks-scheme-providers.html
The projected returns have been calculated by providers who may have used slightly different methods, so it may not be safe to compare different providers directly.
However, what the table does show is the big differences in the money you accumulate over decades depending on whether you choose a conservative, balanced or growth fund within any provider's menu.
The table cannot help with the most important factors to consider in choosing a scheme provider - their past records and whether your money will be safe with them until you retire. You may want to seek advice before choosing.
In the meantime, you can enrol in a default scheme which the Government has certified as safe.
What must employers do?
* Enrol all new employees starting work from tomorrow in KiwiSaver unless you have a company super scheme which has been granted an exemption. New employees will be able to opt out if they choose within eight weeks.
* Provide an information pack to any other employee who requests it.
* Notify Inland Revenue in a form setting out details of your employees who join KiwiSaver.
* Deduct KiwiSaver payments from employees' wages and send them to Inland Revenue.
