FSC reacts positively on KiwiSaver tax confusion

The Financial Services Council (FSC) says revelations around the wrong Prescribed Investor Tax Rate (PIR) are a timely reminder to New Zealanders.

“It provides a valuable opportunity for KiwiSaver members to review their details and take an active interest in their investment,” FSC chief executive officer Richard Klipin said. “Now is a great time for everyone to have a closer look at their KiwiSaver options and talk to their providers to help make the most out of their investment.”

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Here are three rules of thumb, as outlined by FSC, that you can pass to your clients on engaging with their KiwiSaver Scheme.

1. Save smart. Ensure you are in the right KiwiSaver investment option tailored to your individual needs, you have the right tax rate set and you’re contributing enough every year to receive the government contribution.
2. Save now. Take advantage of the recent changes to KiwiSaver - it’s never too early or too late to think about your future.
3. Save often. Thinking about your savings and saving a little or a little more, more often, can build a bigger nest egg.

Moreover, FSC welcomed the decision by the Inland Revenue not to retrospectively assess the PIRs of effected KiwiSaver members further than last year.

“We are committed to continuing to partner with government and industry to ensure the best outcomes for New Zealanders in KiwiSaver,” Klipin added.