Some of you may be asking what’s a PIR and what does this mean for me? Your PIR is your Prescribed Investor Rate. For KiwiSaver schemes, this is the tax rate that applies to investment earnings allocated to your KiwiSaver account.
There are three PIR rates: 10.5%, 17.5% and 28%. As a general rule if your taxable income is above $48,000 then your PIR should be 28%.
It’s important to have the correct PIR. If your PIR is too high then you will be paying more tax than you need to. If your PIR is too low then you could be facing a tax bill.
Has Inland Revenue been in touch with you about your PIR? In 2019 Inland Revenue identified 450,000 New Zealanders who they determined were on the wrong PIR. Inland Revenue contacted those who appeared to have a PIR that was too low and advised how much tax they owed.
Inland Revenue replaced their computer system and that means it can now check your PIR against your personal taxable income. Your PIR is based on your income. If your income changes (up or down), this might mean a change in your PIR. Your residency status can also affect your PIR. Inland Revenue can also now let your KiwiSaver provider know if it looks like you are one the wrong PIR rate.
We have put a one-page guide together that may help you in calculating your PIR rate.
You can log into your Christian KiwiSaver Scheme account and check your PIR. If you need to change your PIR then send us an email. If you’re not sure then you can phone us on 0508 738 473.
This is the third article on KiwiSaver related jargon used by the media and others. We try to use plain English but every now and again a bit of jargon is inevitable in our communications with you. Over the coming months, you are also going to be receiving a range of annual documents and this explanation covers this range of documents.
Confirmation Information: This is an annual statement setting out your balance, contributions and fees. This year there will also be some new information on retirement savings and income projections. We usually send this to you during June.
Annual Report: This is a report sent or notified to you by us as your KiwiSaver scheme provider. It sets out information about the Christian KiwiSaver Scheme. It includes the number of members and whether there have been any material changes to the Scheme during the year. We usually send this to you during August. A copy will also be put onto the Christian KiwiSaver Scheme website.
Fund Update: The Christian KiwiSaver Scheme is a restricted KiwiSaver scheme (see October 2019 Newsletter) and provides an annual update about how the funds have performed. There is a separate Fund Update for the Income Fund, Balanced Fund and Growth Fund. These will be made available towards the end of June. Copies will be available on the Christian KiwiSaver Scheme website.
Please tell us if there is something you’d like us to explain.
There is a KiwiSaver Glossary on the website under Documents/Guides & Policies that explains most of the KiwiSaver related jargon.
When it comes to ordering a pizza, there are so many different outlets we can use, and, even then, there are so many different flavours to suit our tastes – from meaty, seafood, vegetarian to vegan pizza. There’s even a range of crusts we can choose between, from thin to crusty to pan fried. For the more health conscious among us there’s now available four-star nutritional pizzas.
You know, choosing the right KiwiSaver provider and scheme for you can be like choosing the type of pizza we want. There are so many providers out there, and even when we may have found a provider we like there’s a range of funds between conservative, balanced, growth or aggressive and it can be confusing.
Now, like choosing that nutritious pizza, there’s a range of ethical – or socially responsible – KiwiSaver schemes and providers in the market. This can make it difficult to choose something that matches what we’re looking for. While in selecting a pizza it will depend on what flavour or taste we’re looking for, in choosing a KiwiSaver scheme that’s right for us it’s down to our individual values and beliefs.
Values are very abstract concepts aren’t they? But basically they’re our preferences and priorities. We only really know that values are in our lives when we’re living in line with them. Unlike that pizza in the picture, values are so intangible; we can’t touch them. It could be said that our values are ideas that enable us to prioritise all our experiences.
Our beliefs influence and create our values. The Christian KiwiSaver Scheme is based on universally accepted Christian values, and our investment team apply those values to where funds are invested.
Just like in choosing the type of pizza you eat – whether you want a vegetarian or even vegan pizza the key to avoiding any value conflicts is to be really clear about your priorities and align these with all aspects of your life – from your choice of pizza to including in your KiwiSaver provider or fund the type of companies you would want to invest in.
When next you order a pizza think about how you choose the toppings and base, see if it lines up with your values. If you would like to talk with us about our ethical investment options check us out at Anglican Financial Care’s Christian KiwiSaver Scheme website. Or, if you prefer, give us a call on (0508) 738 473.