All investments carry risk. Events affecting investments cannot always be foreseen, and no-one guarantees any rate of return (or the return of capital). Before joining the Scheme, you should carefully consider the risks. Your financial adviser can explain the risks in more detail, and tailor advice to suit your needs and objectives.
Investments are often divided into five major investment classes – cash, bonds, property, shares and alternative assets – which have differing levels of risk. There is generally a risk/return trade-off. This means that, when investing in higher risk investments, a higher return is expected on those investments to compensate for the additional risk. Lower risk investments are expected to generate a lower return on average over time.
Determining how much risk to take should be related to the period of investment. Generally, if investing for a longer period of time, a portfolio should hold more growth assets (such as shares and property). Returns are expected to be higher and there is a longer time period in which to balance out any negative returns received against positive returns. Lower risk investments are generally more suitable for some- one with a shorter time horizon, as these investors require greater stability in returns with less risk of loss of capital.
To help you clarify your own attitude to risk, we recommend you seek financial advice from an authorised financial advisor. In addition, you may work out your risk profile at https://sorted.org.nz/tools/investor-kickstarter
See the Product Disclosure Statement (PDS) for more information about the risks associated with investing in an investment portfolio.
We charge fees and recover expenses to cover administration of the Scheme itself and costs associated with the professional management of your investments. The fees you pay will be charged as follows:
Information on the fees for the Scheme can be found in the Product Disclosure Statement and at www.business.govt.nz/disclose.
We calculate the tax payable on your Scheme investment income based on your Prescribed Investor Rate (PIR), and we will pay this tax directly to the New Zealand Inland Revenue Department (IRD). Provided the correct PIR is provided to us, you won’t need to include any Scheme income in your personal tax return. We apply the tax rules to the Scheme’s investments and calculate tax and tax credits on a daily basis. We then calculate your share of the Scheme’s total tax liability based on:
In most cases, non-resident investors will be able to claim to be Notified Foreign Investors, in which case they will pay no tax on their share of the Funds’ foreign-sourced income. See the Product Disclosure Statement or the Other Material Information for further details. Non-resident Members should seek their own tax advice in their country of residence, including tax treatment of payments to or withdrawals or transfers from the Scheme. Tax legislation, its interpretation and the rates and basis of taxation are subject to change, and the application of tax laws depends on a Member’s individual circumstances. Neither the Scheme nor i-Select, accepts any responsibility for the taxation implications of Members investing in the Scheme. Members are advised to consult a qualified and experienced tax adviser.
The i-Select PIE Superannuation Scheme is a QROPS. This means you may be able to transfer UK pension funds to the Scheme (e.g. from a registered pension scheme in the UK or from another QROPS).
UK pension funds that are transferred to the Scheme will be subject to current QROPS rules and restrictions. We recommend you obtain advice on these before you make a transfer to the Scheme.
The Scheme can accept members who are not residents in New Zealand, but there may be specific disadvantages following the introduction of the Overseas Transfer Charge by the UK government with effect from 9 March 2017. It is possible but unlikely that a non-resident would qualify for any of the exemptions from this charge at present.
Funds transferred out of the UK before 9 March 2017 are likely to be unaffected by the introduction of the Overseas Transfer Charge.
The Manager has registered the scheme with ASIC (the Australian Securities and Investments Commission) under the mutual recognition scheme related to the offering of financial products in both countries.
There may be tax advantages to Australians investing in New Zealand superannuation schemes because of the Australian superannuation contribution rules.
We strongly recommend you seek advice from an appropriately qualified and experienced superannuation and taxation adviser before joining or making a transfer to the Scheme.