Bank couldn't release KiwiSaver funds directly to customer

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Bank couldn't release KiwiSaver funds directly to customer

Categories:

Kiwisaver,

Summary:

David had been living in Australia for several years and wanted to transfer his KiwiSaver savings into his Australian superannuation fund. However, his Australian superannuation provider wouldn’t accept such a transfer. He contacted his bank, which was also his KiwiSaver provider, and asked it to withdraw his savings and pay the money directly to him, on the grounds of permanent migration. The bank declined, saying the law prevented it from doing so.

Published:

April 2016

Our investigation

We explained that KiwiSaver members who have moved permanently to countries other than Australia can withdraw funds (subject to certain requirements). Those living in Australia can transfer their KiwiSaver savings to a compliant Australian superannuation scheme. But Australian superannuation providers are under no obligation to take KiwiSaver savings. It is entirely voluntary.

He said he had tried without success to find an Australian superannuation fund provider that would accept KiwiSaver transfers. He therefore believed the bank ought to release his funds to him.

We said that irrespective of his difficulties in finding a willing Australian superannuation provider, David’s bank had to comply with KiwiSaver legislation and couldn’t release his savings. We couldn’t find against the bank because it was complying with KiwiSaver legislation. Nor could we make the bank release his savings.

We said he could keep trying to find a willing Australian provider, or he could leave his savings in New Zealand until he became eligible at 65 to draw on them, or until any other limited grounds for withdrawing funds applied.