Applications for Your Benefits
Applications for benefits must be made on the applicable benefit application form.
Entitlement to Your Benefits
The provision of retirement benefits is the primary purpose of both MRS and MKS although you may be entitled to other benefits. Some of these benefits are common to both MRS and MKS while other benefits differ both between MRS and MKS and within MRS between Seafarers and Waterside Workers.
The different benefits available to members of the Seafarers Fund, members of the Waterside Workers Fund and members of MKS are as follows. Benefits that are common are described later.
Retirement or Redundancy Benefit
When you attain age 60 for members who joined the Scheme prior to 1 January 1996, or otherwise when you attain age 65, you are entitled to a benefit consisting of the total balance of your Member’s Account and Employer’s Account.
You are also entitled to the Retirement Benefit where, in the Trustees’ opinion, you are declared redundant. The policy of the Trustees is to seek confirmation of your redundancy from your employer and MUNZ.
If you die, your legal personal representative, i.e., the executor or administrator of your estate, will receive the total balance of your Member’s Account and Employer’s Account.
If you leave the Seafaring Industry prior to age 60 for members who joined the Scheme prior to 1 January 1996 or otherwise prior to age 65, other than for reasons of retirement or redundancy, ill health or permanent incapacity, you will be entitled to a Withdrawal Benefit consisting of the total balance of your Member’s Account plus a percentage of your Employer’s Account.
If you have been a Scheme member for three (3) complete years fifteen per cent (15%) of the Employer’s Account shall vest in you for that three (3) year period increasing at a rate of five per cent (5%) per year for each subsequent complete year of Scheme membership to a maximum of one hundred per cent (100%) on the 20th anniversary of your Scheme membership.
If you have received a partial withdrawal from the Scheme and subsequently become entitled to a Withdrawal Benefit before completing 20 years continuous membership, your entitlement to a share of your Employer’s Account will be adjusted to reflect the proportion, if any, of your Employer’s Account that was included in the Partial Withdrawals Benefit.
Your Withdrawal Benefit will include the total balance of your Employer’s Account where you elect to defer payment of your benefit until the date you would have qualified for 100% of your Employer’s Account or where you elect, at the Trustees’ discretion, to transfer all of your benefits to another superannuation scheme registered under the FMC Act.
You may, on such occasions and in such circumstances as the Trustees in their discretion determine, make application to the Trustees for an in-service benefit payment. The amount of any such payment must be approved by the Trustees and is paid as a lump sum. This benefit is at the Trustees’ discretion.
The policies of the Trustees (which take effect from 1 April 2017) allowing members of the Seafarers Fund to make inservice withdrawals are as follows:
- only members of the Seafarers Fund on 1 April, 2017 are eligible for inservice withdrawals and not members who joined after that date
- members on 1 April, 2017 who have not made an inservice withdrawal are allowed one withdrawal after 15 years, members who made an inservice withdrawal prior to 1 April 2017 are allowed a second inservice withdrawal after 20 years, members who made two inservice withdrawals prior to 1 April 2017 are allowed a third inservice withdrawal after 25 years, and members who have already made three inservice withdrawals are not permitted a further inservice withdrawal
- hardship withdrawals and 1st home withdrawals are treated as an inservice withdrawal for the purpose determining if members will be permitted a (further) inservice withdrawal
- in-service withdrawals are limited to 50% of the member’s withdrawal benefit entitlement and the second and third withdrawals are limited to $50,000.
- inservice withdrawal payments are generally not made until six (6) months after that date at which the application is received by the Administrator.
Retirement or Redundancy Benefit
When you attain age 65, or when you retire or leave the Waterfront Industry having attained age 60, you are entitled to a Retirement Benefit consisting of the total balance of your Member’s Account and Employer’s Account. You are also entitled to the Retirement Benefit where, in the Trustees’ opinion, you are declared redundant, or you are on a fixed-term contract and your employer decides not to renew your contract or offer you a new contract, or your fixed-term contract is terminated.
If you die while you are a Scheme member, your legal personal representative, i.e., the executor or administrator of your estate, will receive the total balance of your Member’s Account and Employer’s Account.
In addition, your estate will be entitled to an Additional Death Benefit equal to twice the contributions (excluding voluntary contributions) up to 7% you would have made in the year ending 31 March in which your death occurred had you not died, multiplied by the number of years and complete months (with completed months counting as a fraction of a year) between 31 March preceding your death and your 65th birthday. This calculation is based on your current rate of earnings and contributions up to 7%. For members who joined prior to 1 April 1996 your current rate of earnings is based on the National Average Earnings of members in the previous financial year.
To be eligible for this Additional Death Benefit you and your employer must each be contributing at least 4% to the Scheme at the time of your death. Otherwise, your Death Benefit will be restricted to the total balance of your Member’s Account and Employer’s Account.
If you leave the Waterfront Industry before age 60 other than for reasons of retirement or redundancy, ill health or permanent incapacity, you will be entitled to a Withdrawal Benefit consisting of the total balance of your Member’s Account plus a percentage of your Employer’s Account.
If you have been a Scheme member for one (1) complete year twenty per cent (20%) of your Employer’s Account shall vest in you for that complete year increasing at a rate of twenty per cent (20%) per year for each subsequent complete year of Scheme membership to a maximum of one hundred per cent (100%) on the fifth anniversary of your Scheme membership.
Terminal Illness Benefit
If the Trustees, acting on medical advice, consider that you have been diagnosed as having six months or less to live but you continue working, you can elect to withdraw up to 50% of your Withdrawal Benefit that would be payable had you left the Waterfront Industry at that time. Receipt of this benefit will not affect you qualifying for further Scheme benefits on leaving the Waterfront Industry.
You can only withdraw your KiwiSaver savings as specified in the KiwiSaver Act or otherwise as required by law. Generally, unless you die, you will not be able to withdraw your KiwiSaver savings until you are age 65 and you’ve been a member of KiwiSaver (or a complying superannuation fund) for at least five years.
In the event of your death, the Trustees must pay the full balance of your KiwiSaver savings to your estate’s personal representative.
In limited circumstances and subject to satisfying specific criteria (not all of which are outlined below) you may be able to make a withdrawal of all or part of any contributions before this date. As described later, these circumstances include First Home purchases, serious financial hardship and serious illness. In addition, MKS benefits may be withdrawn in the following circumstances:
If you move overseas permanently, other than to Australia, you can withdraw your KiwiSaver savings (excluding any Australian sourced funds) after you’ve been overseas for at least one year. You cannot withdraw any Member Tax Credits.
If you move to Australia permanently, you can transfer your KiwiSaver savings to an Australian Complying Superannuation Fund that is willing to accept the transfer. Withdrawals of Australian savings at age 60.
If you have transferred money from an Australian Complying Superannuation Fund to KiwiSaver:
· You can generally start withdrawing this money once you are age 60 and have retired for the purposes of Australian superannuation legislation (which means you have stopped working);
· You will not be able to withdraw this money to purchase your first home;
· You will not be able to withdraw this money if you subsequently permanently emigrate from New Zealand to a country other than Australia.
To pay tax or make a student loan payment
If you’ve transferred money from a foreign superannuation scheme, other than an Australian scheme, into KiwiSaver, you may be able to make an early withdrawal to pay tax or student loan repayments owing as a result of the transfer. You can only withdraw your savings to pay tax or student loan repayments owing as a result of the transfer. You may be able to withdraw all of your KiwiSaver savings (other than the MTCs and $1,000 kick start if you received one). Any withdrawal for this purpose will be paid directly to Inland Revenue, and not to you.
The following benefits are common to members of both the Seafarers Fund and the Waterside Workers Fund of MRS and members of MKS:
Buying your first home
If you have been contributing to the Fund (or have belonged to a KiwiSaver scheme) for 3 or more years then, with the Trustees’ consent, you may make a withdrawal from the Scheme to purchase a first home. The amount withdrawn must be used to settle the purchase and cannot be used for another purpose such as paying the deposit. The maximum amount under MRS that can be withdrawn is your Member’s Account balance whilst under MKS it is your total account less $1,000.00. Otherwise, the Fund’s first home purchase withdrawal criteria mirror those in the KiwiSaver Act 2006. Funds transferred from an Australian Complying Superannuation Fund cannot be withdrawn for the purchase of a first home.
Significant financial hardship
If you can provide the Trustees with evidence that you’re suffering significant financial hardship, you may be able to make a withdrawal. Significant financial hardship is defined in the KiwiSaver Act 2006 to include significant financial difficulties that arise because of your inability to meet minimum living expenses. Under the Trustees’ policies minimum living expenses may include the actual and reasonable costs of:
- basic food items
- basic clothing
- mortgage repayments, including interest
- property rates
- necessary maintenance of the member’s principal place of residence
- utility services, eg, electricity, gas and telecommunications
- transport, including car running costs
- primary medical, dental and optometry expenses, excluding medical/surgical insurance
- fire and general insurances
- school fees, excluding private school and tertiary education expenses
- other normal non-luxury household items.
Only expenses associated with your principal place of residence may be included.
Apart from minimum living expenses (including mortgage repayments) the KiwiSaver Act 2006 recognises the following extraordinary costs that may give rise to significant financial hardship:
- mortgage repayments on your principal family residence resulting in the mortgagee seeking to enforce the mortgage on the residence; or
- the cost of modifying a residence to meet special needs arising from your disability or your dependant’s disability; or
- the cost of medical treatment for an illness or injury to you or your dependant but the Trustees’ policy is to exclude secondary medical expenses where these are covered by the public hospital system or ACC; or
- the cost of palliative care for you or your dependant but again the Trustees’ policy is to exclude the costs of palliative care where this care is available from the public hospital system or a local hospice; or
- the cost of a funeral for your dependant; or
- your suffering from a serious illness (as defined by the KiwiSaver Act).
It is not envisaged that financial hardship withdrawals will be approved where you have incurred debts by living beyond your means unless you have been declared bankrupt or a mortgage foreclosure on your primary place of residence is threatened.
In providing evidence of your minimum living expenses and the amount of the withdrawal required to alleviate financial hardship, you are generally required to obtain budgetary advice in support of your application and to demonstrate that you have explored and exhausted alternative sources of funding.
In addition to a budget based on the your minimum living expenses and any extraordinary expenses supported by independent budgetary advice, any application must be accompanied by a statutory declaration of the your assets and liabilities and medical evidence in support of any hardship applications due to serious illness specifying the nature of the injury, illness or disability and its effect on your capacity to engage in work to which the you are suited.
The Trustees limit withdrawals to the amounts required to alleviate hardship. You cannot withdraw any Government Contributions (as defined by the KiwiSaver Act) or the $1,000 kick start if you received one.
If you need to leave the Seafaring industry or the Waterfront industry before attaining the age of retirement due to a serious illness you will be entitled to a serious illness (disablement) benefit consisting of the total balance of your Member’s Account and Employer’s Account.
Serious illness is defined to mean an injury, illness, or disability:
· that results in you being totally and permanently unable to engage in work for which you are suited by reason of experience, education, or training, or any combination of those things; or
· that poses a serious and imminent risk of death.
A medical certificate is required from you to support ill health and disablement benefit claims. As per the procedures in the KiwiSaver Act, such medical certificates shall set out the nature of the illness, injury or disability and its effect on your ability to engage in work to which you are suited.
In cases of doubt, the Trustees may obtain an independent medical opinion. This may result in some delay in processing applications for ill health and disablement benefits payments.
PAYMENT OF YOUR BENEFITS
Benefits are generally paid as a lump sum. You may however request that your benefit payment be deferred or transferred to another scheme.
Deferring Your Benefit
If you become entitled to a Retirement or Redundancy Benefit, Death Benefit, Serious Illness Benefit or Withdrawal Benefit, you (or in the case of a Death Benefit, your legal personal representative) may defer payment of the whole or a part of your benefit. During any period of deferment, your benefit will continue to attract earnings. The beneficiary of a Death Benefit is not entitled to request that the Trustees defer the payment of such benefit.
At any time you may elect to withdraw all or part of your deferred benefit as a lump sum or periodic lump sums, and/or by regular payments, subject to the following terms and conditions:
- the minimum amount of benefit that deferred beneficiaries may initially defer is $25,000
- the minimum amount of lump sum withdrawals is $5,000
- the maximum number of lump-sum withdrawals per year is 2 (in addition to any regular payments)
- the minimum amount of regular monthly withdrawals is $500 which may be stopped or varied at any time
- the minimum balance that deferred beneficiaries shall hold in any investment portfolio is $5,000.
Final payment of your deferred benefit will be paid as soon as practicable following your request (or in the case of your death, following a request by your legal personal representative or other person approved by your legal personal representative).
Members who have left the industry but have not elected within one month whether to withdraw or defer payment of their benefits are treated as deferred beneficiaries.
Deferred beneficiaries are not entitled to make voluntary contributions.
The Trustees have a brochure to encourage members to consider the option of deferring their benefits and making regular withdrawals as a means of managing their savings and budgeting their expenditure in retirement. This brochure contains an actuarial assessment of the regular payments supported by various amounts of retirement savings. This brochure shall be send by the Administrator to retiring members with their benefit claim form.
Transferring Your Benefit To Another Scheme
When you cease to be a member of MRS or MKS the Trustees may, at your request or in their discretion if permitted under legislation, transfer all of your Member’s Account and Employer’s Account to another scheme which you join or become a member of, on such terms and conditions as the Trustees may determine. Such a scheme (including a KiwiSaver scheme) must be registered under the FMC Act and operated by any new employer, or in which your new employer participates, or otherwise must be a superannuation scheme approved by the Trustees for this purpose.
You are also entitled to transfer your full benefits to another scheme if you transfer to another employer within the Waterfront Industry and are no longer entitled to be a Scheme member or to receive contributions by your employer, other than by virtue of your ability to defer payment of all or part of your benefits.