New Zealanders who have worked in Australia will from today be able to transfer their retirement savings back to New Zealand if they return home.
The Australian government announced in May that it has completed legislative steps to allow New Zealanders to transfer their retirement savings between complying Australian superannuation schemes and KiwiSaver.
The new arrangements take effect from today, allowing returning Kiwis to transfer funds in their Australian superannuation schemes into participating KiwiSaver schemes and vice versa.
Australia's Tax Office has estimated that there is about $A17.7 billion ($21 billion) in "lost accounts" in the Australian superannuation system.
The Government expects that some of this money belongs to New Zealanders who have returned home and the new rules will allow these funds to be brought back to New Zealand.
Under current rules, employers of Kiwis who work in Australia must contribute to an Australian complying superannuation fund, which locks in their savings until retirement age.
Retirement savings between the two countries will be exempt from entry and exit taxes and KiwiSaver members moving from New Zealand to Australia will be able to retain any member tax credits if they transfer to an Australian scheme.
While KiwiSaver members will not be able to withdraw money transferred from Australia to help them buy their first home, they may use interest earned on those savings for this purpose.
Retirement savings transferred from Australia into a New Zealand KiwiSaver scheme can be withdrawn when members reach the age of 60 if they meet the definition of being retired as set out under the Australian Scheme rules.
KiwiSaver savings transferred to Australian schemes can be withdrawn when members reach 65, in accordance with the KiwiSaver rules.
Participation in the super portability scheme will be voluntary for members in deciding to transfer their funds, and for KiwiSaver providers in deciding whether to accept their funds from Australia.
More information on the super portability scheme is available on Inland Revenue's tax policy website