Is an employer-chosen KiwiSaver scheme right for your business?9 October 2008
Have you selected an employer-chosen scheme for your business? Some employers are concerned that selecting an employer-chosen scheme may be seen as giving investment advice. Here’s what Michael Cullen had to say on this:
“If an employer is merely acting as a conduit or passing on information about KiwiSaver to its employees, or selecting a preferred KiwiSaver scheme for its employees, the employer will not be liable as an adviser or promoter under the investment advisers and securities legislation.” (Michael Cullen, May 2007).
This is further reinforced by Inland Revenue’s KiwiSaver Employer Guide (February 2008), which includes the following statements:
“You do not have any liability if you just provide general savings or KiwiSaver information or select an employer-chosen scheme” and “Employers who select a KiwiSaver scheme for their employees as an employer-chosen scheme will not be liable if the scheme fails”.
And to dispel any lingering fears, employers could refer to Sections 209 and 206 of the KiwiSaver Act, which in essence say an employer selecting an employer-chosen scheme is not deemed to be a promoter, or seen to be giving investment advice.
If you don’t have an employer-chosen scheme in place, employees will be allocated to one of six default providers on a rotational basis (unless an employee chooses a provider). How do these employees know if this is the right fund for them? Where do they go if they need investment advice?
By selecting AMP as your employer-chosen scheme you’ll be dealing with one main KiwiSaver provider and giving your employees access to financial advice. Having access to a financial adviser can enable your staff to better understand KiwiSaver and help them make good financial decisions.
Remember, employees always have the final say – from joining KiwiSaver, to choosing a provider, to deciding where to invest. Selecting an employer-chosen scheme will help those employees who need a helping hand or may be new to investing.
For more information about the AMP KiwiSaver Scheme and for a copy of the AMP KiwiSaver Investment Statement, please contact us at True North Investments on 0800 88 13 13.
This article is a summary only and includes general information about KiwiSaver. It is not a substitute for professional financial advice. A disclosure statement is available on request and free of charge.
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