Section 101FC minimum amounts applying to “hybrid” schemes

Clause 538

Submission

(10 – New Zealand Society of Actuaries)

Section 101FC should be amended so that it also applies for contributions to “hybrid” schemes.

Comment

New section 101FC introduces a rule so that an employer may not be required to make a top-up contribution if an employee is a member of a KiwiSaver scheme and an existing employer superannuation fund. As long as the amount of the contributions to the existing employer fund is calculated using the same compulsory employer contribution rate, there is no additional compulsory employer contribution payable (even if the dollar amounts are uneven as a result of a different salary basis being used).

As currently drafted, the provision applies only to “other contributions” that meet the requirements of section 101D(5)(b). The provision should be extended to include “hybrid” scheme amounts as such amounts can be deducted from the amount of compulsory employer contributions required to be paid.

Recommendation

That the submission be accepted.