Tuesday 18th September 2012
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The Australian Federal Government is calling for public submissions on legislation to let superannuation schemes cross the Tasman, just one day after a joint Productivity Commissions' report into Closer Economic Relations called for the changes to be made.
Australian Financial Services and Superannuation Minister Bill Shorten today released draft legislation that would let Australians and kiwis take their pensions with them when the cross the Tasman, and expects to table the bill in the Federal Parliament later this year. The move comes after a joint study into New Zealand and Australia's CER urged Australian legislators to follow their kiwi brethren's lead and proceed with the reforms.
"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," Shorten said in a statement. "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."
The study, undertaken by Productivity Commissions on both sides of the Tasman, estimates some $8 billion may flow from Australian super funds and into KiwiSaver schemes, which will increase capital in New Zealand and reduce the average cost of funds management.
New Zealand Finance Minister Bill English and Australian Treasurer Wayne Swann signalled the move for superannuation portability in July 2009.
Australians have until Sept. 28 to make a submission on the draft bill, with the legislation likely to enter Parliament this year. The law will probably come into effect from July next year.
That portability may help diminish the migration risk New Zealand's universal pension poses, which the joint study into CER flagged as a threat with Australia's increasing age of entitlement.
The scheme may be "attractive for some Australian citizens to retire in New Zealand with their privately managed superannuation monies which would also not be subject to means testing (abatement) under NZS rules," the report said.
The commissions are seeking more information on the risks and costs to the New Zealand superannuation from return migration from Australia.
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