96,000 new savers joined KiwiSaver this year; the scheme has 3.3 million members as at 30 June 2023. We handled $8.8 billion in KiwiSaver member and employer contributions and ensured 99.5% of funds reached scheme providers to invest within 3 days.
One of the most important KiwiSaver events happens in July when we process annual claims for the KiwiSaver Government Contribution to members’ savings. Over 2 weeks in July 2022, we processed 2.7 million claims and paid out $961 million in the contribution to savers. Processing these claims quickly meant the contributions began earning investment returns for members as soon as possible.
Changes made back in April 2022 to make it easier for members to change their KiwiSaver contribution rate have worked well. Previously, customers would have to request this via their employer—now savers can come to us, their scheme provider or employer. The process is fully automated.
KiwiSaver activity can be a barometer for the wider economy. At 30 June 2023, 1,691 members were on a hardship savings suspension, 64% more than in June 2022. 42% more customers (20,600) made a hardship-related withdrawal of funds than in 2021–22.
Paying the right PIR rate
Over the past few years, we’ve notified portfolio investment entity (PIE) fund managers, which includes KiwiSaver schemes and individual investors, when we think an investor is using an incorrect prescribed investor rate (PIR).
We started at a point where approximately 1.6 million investors were using an incorrect PIR, meaning they were not paying the right amount of PIE tax. By 2023, this had reduced to approximately 450,000 investors.
While 450,000 customers is still higher than we would like, PIR is hard for investors to calculate and the rate changes as people’s financial situations change. Customers on incorrect rates are squared up at the end of the tax year.
Te Tari Taake, Inland Revenue has also adjusted the notifications sent to individual investors to ask them to contact us rather than their PIE manager if they think the rate we’ve suggested is wrong. As intended, this has resulted in investors talking to us directly about their PIR.
- $173 million in hardship-related withdrawals from KiwiSaver were granted
- 2022: $104.4 million.
- We processed most claims from members for the KiwiSaver Government Contribution within 2 to 3 days.