Section Sch28 — Income Tax Act 2007: Requirements for complying fund rules

Schedule 28 Requirements for complying fund rules RD 66 Schedule 28: inserted, on 1 April 2008, by section 136 of the Taxation (KiwiSaver) Act 2007 (2007 No 110). KiwiSaver rules 1 The first requirement is that the rules are the same, though modified as necessary, as the rules for KiwiSaver schemes set out in— (a) sections 101G and 196 of the KiwiSaver Act 2006; and (b) schedule 1, clauses 2 , 4(1) to (4) , 7 , 9 , and 17 of that Act. Withdrawals 2 The second requirement is that the rules— (a) allow a withdrawal in some or all of the circumstances described in regulations made under section 229(1) of the KiwiSaver Act 2006 and the rules for KiwiSaver schemes in schedule 1, clauses 8 and 10 to 14 of the KiwiSaver Act 2006, modified as necessary, or in none of those circumstances; and (b) do not allow a withdrawal under any circumstances other than those described in paragraph (a) or clause 1; and (c) require the trustees, if the employee asks, to pay any withdrawal allowed under this clause and clause 1 as a lump sum, as if the withdrawal were a permitted withdrawal to which schedule 1, clause 5 of the KiwiSaver Act 2006 applies, modified as necessary. Transfers 3 The third requirement is that the rules require— (a) a transfer, if the employee asks, of some or all of an employee's superannuation accumulation to another complying superannuation fund or to a KiwiSaver scheme, and for the latter when the requirements of the KiwiSaver Act 2006 are met; and (b) that the complying fund rules apply to an employee's superannuation accumulation if it is transferred to another complying superannuation fund under paragraph (a); and (c) a transfer of an employee's superannuation accumulation to a KiwiSaver scheme, if the employee does not ask for a transfer under paragraphs (a) and (b), and the employee— (i) is no longer eligible to be a member of their complying superannuation fund: (ii) may not remain a member for any reason, but this paragraph does not apply to a transfer under paragraphs (a), (b), and (d), or a withdrawal of some or all of an employee's superannuation accumulation under these rules; and (d) a transfer of an employee's superannuation accumulation to a KiwiSaver scheme, if the FMA revokes approval of the superannuation fund as a complying superannuation fund and the accumulation is not transferred to another complying superannuation fund and is not subject to these rules. Notification 4 The fourth requirement is that the rules require that— (a) the Commissioner is notified if the employee's superannuation accumulation must be transferred under clause 3(c) and (d): (b) the fund provider is notified if the employee's superannuation accumulation is transferred to another complying superannuation fund under clause 3(a). Notification details 5 For the purposes of clause 4,— (a) notification under clause 4(a) must include the name, address, and tax file number of the employee, the name and address of their employer, and the name and tax file number of the employee's complying superannuation fund: (b) notification under clause 4(b) must include— (i) notice of any written evidence given to the old fund provider under section MK 2(2) : (ii) the amount of tax credits received by the old fund provider under subpart MK : (iii) information held by the old fund provider that would be relevant to the new provider in making a claim under section 68C of the Tax Administration Act 1994, such as information about the periods for which claims have already been made. Age restriction 6 The fifth requirement is that the rules prevent a person over the qualification age for New Zealand superannuation from joining. Minimum contributions 7 The sixth requirement is that the rules require, as a minimum, contributions to be deducted for an employee at the rate of 2% of gross salary or wages (as defined in section 4 of the KiwiSaver Act 2006). Funding benefits 8 The seventh requirement is that the rules require that an employee's superannuation accumulation is used to fund benefits that are calculated only by reference to the amount of the accumulation. Continuation as member 9 The eighth requirement is that the rules commit an employee to continue to be a member unless otherwise provided by clauses 1 to 8. Schedule 28: amended, on 1 May 2011, by section 85(1) of the Financial Markets Authority Act 2011 (2011 No 5). Schedule 28: amended (with effect on 1 April 2009), on 6 October 2009, by section 587 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Schedule 28: amended, on 1 April 2009, by section 57 of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).