KiwiSaver balances off limits in a bankruptcy – Court of Appeal

A bankrupt’s KiwiSaver account balance is off limits to the Official Assignee.  Even if it were not, the Official Assignee could not use the bankruptcy to invoke the hardship-based early withdrawal provisions in the KiwiSaver Act 2006.

This is the effect of a Court of Appeal judgment, delivered on Friday.  Although justifiable in policy terms, the decision raises issues about the appropriate balance between promoting retirement savings and protecting creditor rights. 

Significance

Filed under:
New Zealand, Insolvency & Restructuring, Litigation, Chapman Tripp, Bankruptcy
Authors:
Mike Woodbury , Michael Arthur , Penny Sheerin , Tim Williams , Emma Dale (Harding)
Location:
New Zealand
Firm:
Chapman Tripp
Feedback sought on use of retirement savings in bankruptcy

​The Ministry of Business, Innovation and Employment (MBIE) is proposing law change after the Court of Appeal ruled that KiwiSaver funds are beyond the reach of the Official Assignee.

The effect of the ruling is to provide a higher level of protection for KiwiSaver balances than for other forms of retirement savings.

MBIE is seeking feedback on a range of options to create a uniform policy approach to the use of retirement savings in bankruptcy.

Submissions close on 30 September 2016. We encourage you to make a submission.

Background

Filed under:
New Zealand, Employee Benefits & Pensions, Insolvency & Restructuring, Litigation, Chapman Tripp, Bankruptcy
Authors:
Penny Sheerin
Location:
New Zealand
Firm:
Chapman Tripp