General provisions

Clarification of Crown and employer liability

Section 205 ensures that there is no Crown guarantee of any KiwiSaver scheme or investment product relating to a KiwiSaver scheme.

Section 206 clarifies the liability of employers, the Crown and any other person in relation to information that they provide about KiwiSaver. If an employer or the Crown, for example, only supplies an information pack, gives a factual description of the features of a KiwiSaver scheme, provides KiwiSaver information in the course of promoting the benefits of retirement savings in general or otherwise performs a function, duty or power under the Act, they will not be liable for giving investment advice under the Investment Advisers (Disclosure) Act 1996.

Unique identifiers

Section 207 overrides Information Privacy Principle 12(2) and (4) of the Privacy Act 1993 (which relate to unique identifiers) to allow a provider of a KiwiSaver scheme to:

• require an individual to disclose any unique identifier that has been assigned to that person by the Commissioner for the purposes of carrying out specified functions, duties or powers; and
• assign to a proposed member, or member of the KiwiSaver scheme any unique identifier assigned to that person by the Commissioner.

This override of the Privacy Act does not authorise a provider to use a unique identifier assigned by the Commissioner, except for the purpose of carrying out specified KiwiSaver functions, duties or powers.

Information held by the Commissioner for someone who has opted out or who should not have been a KiwiSaver member

Under section 208 the Commissioner must not use personal information collected on certain people for purposes other than the administration of KiwiSaver if the personal information was provided as required by, and for the purposes of, the Act and has not been provided to the Commissioner for purposes related to any other Inland Revenue Act.

The Commissioner cannot use personal information relating to:

• an employee who has given an opt-out notice to the Commissioner or to an employer after:
• the date the opt-out notice is accepted by the Commissioner if the opt-out notice is given to the Commissioner and does not result in a requirement for contributions that are in the possession of the Commissioner to be repaid;
• the date that the Commissioner receives a copy of the notice from the employer if the opt-out notice is received by an employer and does not result in a requirement for contributions that are in the possession of the Commissioner to be repaid; or
• the date of the final refund of those contributions if the opt-out notice results in a requirement for contributions that are in the possession of the Commissioner to be repaid; or
• a person who is allocated to a KiwiSaver scheme in circumstances in which the Act does not require the person to be allocated to a KiwiSaver scheme and the person does not opt into any KiwiSaver scheme or choose to remain in the KiwiSaver scheme to which they are allocated.

Interface with securities law

Where a member's security in a KiwiSaver scheme cannot be allotted (for example, if the scheme's prospectus is cancelled), the Act seeks to place the member back to their previous position as far as possible by transferring that member back to their previous KiwiSaver scheme, or if this is not possible, into a default KiwiSaver scheme.

The Act also clarifies that if a person is allocated to either a default scheme or an employer-chosen scheme, the member is considered to have received an investment statement. This is to ensure that a security may not be made voidable at a later date simply because the provider does not have proof that the member had in fact received the investment statement.

Disputes

If a matter under Parts 2 and 3 of the Act is left to the discretion, judgement, opinion, approval, consent or determination of the Commissioner, under section 212 a person affected by the Commissioner's decision has 20 working days (from the date on which the notice of the decision was given to the person) to:

• request that the Commissioner reconsider the decision; and
• give the Commissioner any information in support of that request.

The Commissioner may require a person to make that request by notice. On receiving a request, the Commissioner may:

• accept the person's request;
• seek further information from the person;
• decline the person's request; or
• accept or decline the person's request in part and decline or accept the other part.

Section 213 provides that Part 8A of the Tax Administration Act 1994 applies to every notice of a disputable decision given by the Commissioner under the Act.

Penalties

Sections 214 to 216 set out penalties that are to apply for KiwiSaver purposes. If there is a failure to provide information or withhold contributions under Part 2 or 3 of the Act, specific KiwiSaver penalties will apply in addition to the provisions of the Tax Administration Act. However, if the specific KiwiSaver penalties outlined below apply, the following provisions in the Tax Administration Act will not apply:

• Part 7 (which relates to interest);
• Section 139B (which relates to late payment penalties); and
• Sections 141 to 141L (which relate to tax shortfalls).

Penalty for employers who fail to provide information Employers who fail to give information required by Part 2 or 3 of the Act will be subject to the following penalty:

• nil, if the Commissioner has not given notice to the employer within the preceding 12 months that a penalty may be imposed; and
• in any other case:
• $50, if the employer is a small employer; and
• $250, if the employer is not a small employer.

A "small employer" is defined as:

• an employer whose gross tax deductions payable and specified superannuation contribution withholding tax payable in the preceding tax year were less than $100,000 in total; or
• not being an employer in the preceding year, until gross tax deductions payable and specified superannuation contribution withholding tax payable in the current tax year exceed $100,000 in total.

The penalty is due and payable on the day the next tax deduction required under the PAYE rules is due to be paid to the Commissioner after the end of the PAYE period in which the failure occurred.

Penalty for employers who fail to make a deduction or incorrectly make deductions

Every employer who fails to deduct a contribution from a payment of salary or wages as required by this Act or who deducts an incorrect amount under the Act is liable for the following penalties:

• nil, if the Commissioner has not given notice to the employer, within the preceding 12 months, that a penalty may be imposed; and
• in any other case:
• $50, if the employer is a small employer (as defined above); and
• $250, if the employer is not a small employer.

An employer is not liable, however, for more than one penalty per month to which any employer monthly schedule relates. The penalty is due and payable on the day the next tax deduction required under the PAYE rules is due to be paid to the Commissioner after the end of the PAYE period in which the failure or incorrect deduction occurred.

Giving of notices

Section 14 of the Tax Administration Act 1994 applies when the Act requires the Commissioner to give a notice to a person. Section 14B of the Tax Administration Act applies when the Act requires a person to give a notice to the Commissioner.

When the Act requires a person to give a notice to someone other than the Commissioner:

• the notice must be in writing;
• the notice may be given by:
• personal delivery to an addressee who is not a corporate body;
• personal delivery to an addressee that is a corporate body, if the personal delivery is made to the addressee's office during working hours;
• an electronic means of communication to the addresses, if the person complies with the Electronic Transactions Act 2002; or
• posting it to:
• the street address of the addressee's usual or last known place of residence;
• the street address of any of the addressee's usual or last known place of business; or
• to any other address, if the addressee has notified the person that he or she accepts notices at the address.

A notice given by post is treated as having been given at the same time it would have been delivered in the ordinary course of postal delivery.