Australia Consults On Trans-Tasman Pensions

By ExpatBriefing.com Editorial 20 September, 2012

The Australian government is consulting on draft legislation to establish a trans-Tasman retirement savings portability scheme designed to assist migrant workers.

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 regime, individuals will be permitted to transfer their retirement savings between an Australian complying superannuation fund regulated by the Australian Prudential Regulation Authority and a New Zealand KiwiSaver scheme. Participation in the portability scheme will be voluntary for members and for superannuation funds and schemes. The aim is complete transfers with minimal costs.

The savings will generally be subject to the rules in the host country. 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.

Unveiling the legislation, Australia's Minister for Financial Services and Superannuation Bill Shorten said: "The new scheme will help Australians and New Zealanders make the most of their retirement savings, as they will be able to take their retirement savings with them across the Tasman when they move.

"This will make it easier for people to move freely between the two countries, help consolidate their retirement savings in their country of residence and avoid paying fees and charges on accounts in the two countries."

"The scheme is intended to enhance labour mobility between Australia and New Zealand. This measure is an important step in our closer economic relations with New Zealand, and supports progress toward the goal of a single economic market, to which the Australian and New Zealand governments are committed," Shorten concluded.

The legislation is expected to be introduced into parliament later this year, and is likely to take effect from July 1, 2013. The legislation is open for comment until September 28.

A comprehensive report in our Intelligence Report series titled "The Lowtax International Pensions Report" which has an in depth view on The Mechanics of Pensions Provision, 'High-Tax' Country Pension Regimes and 'Lowtax' Jurisdictions In Which To Locate Pensions Savings, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report14.asp

Tags: Individuals | Expatriates | Investment | Pensions | Law | Employees | Retirement | Australia | Fees | Legislation | New Zealand |

 





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