AUSTRALASIA - Australia and New Zealand have proposed practical options for improving the portability of private retirement savings between the two countries.
Currently, personal retirement savings accumulated in Australia cannot be taken to New Zealand before retirement is reached.
This restriction was historically attributable to both an automatic ability of New Zealanders to retire in Australia and the absence of a retirement savings scheme in New Zealand before the introduction of the KiwiSaver scheme in July 2007.
Both countries agreed that all retirement savings transferred between them via the new portability regime, would be ring-fenced within domestic pension funds and tagged as being sourced from their country of origin.
Ring-fencing administratively separates funds in order to allow country specific rules to be applied. For example, savings originating from Australia and transferred to a New Zealand KiwiSaver account will be tagged as being "Australian-sourced".
Country specific requirements will be designed to address policy differentials between the two countries.
Australian funds will not be able to be used to purchase a first home as this KiwiSaver provision is not allowed under current Australian legislation.
The specific details design of domestic arrangements still needs to be finalised and officials are expected to consult with local superannuation representatives in the next couple of months to ensure that compliance costs are kept to a minimum.
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