Protect your Retirement Funds from Creditors with KiwiSaver

The Court of Appeal has recently found that a bankrupt's KiwiSaver account cannot be accessed by the Official Assignee.

This means that if you are saving for your retirement you can protect those funds from creditors by using a KiwSaver scheme.

This is a significant finding, If it stands it will change the flow of investment funds in New Zealand, KiwiSaver can now be considered a legitimate asset protection vehicle.

It is also three girls jumpunlikely that money in KiwiSaver schemes will be considered as security by lenders.

No matter how small you believe the chances of you facing bankruptcy you owe it to yourself and your loved ones to consider protecting some of your retirement savings from potential creditors.

There is a chance that a set of unfortunate circumstances outside your control could see you bankrupted. Isn't it wise to consider protecting some of your retirement savings in a legal vehicle sanctioned by the court?

Of course most of us feel a responsibilty to pay all our bills but we also have a responsibilty to protect our loved ones.

Creditors will be still able to access your term deposits, sell your bach, rental property, shares and bonds but they wont be able to get at your KiwiSaver funds.

In the past trusts have been the vehicle most often used to protect assets. Trusts come with all sorts of issues and expenses, may not be tax efficient and can be "busted" and provide no protection if not managed correctly.

Give Bay Financial Partners a call on 07 578 3863 to discuss the options. We can help you access a wide range of KiwiSaver schemes from many different providers.


The ruling by the Court of Appeal on 17 April 2015 overturned a previous March 2014 High Court ruling that was sucessfully appealed by Trustees Executors, who had refused to release the funds of two bankrupts to the Official Assignee.

The Court of Appeal judgement found that “The objective of the KSA [KiwiSaver Act] is to encourage a long-term savings habit and the accumulation of funds that will increase the wellbeing and financial independence of individuals, particularly in retirement. There is nothing in the KSA to suggest that a purpose of the legislation is to accumulate funds for the benefit of creditors in the event of the member’s bankruptcy. If that were the case, the important social and economic purposes of the KSA would be undermined and the burden of providing for the welfare of individuals would fall back on the state.”

You may wish to follow this link to read more in a NZ Herald article - Court of Appeal: Bankrupts' KiwiSaver off limits for creditors, Official Assignee, 2:15 PM Tuesday Apr 21, 2015

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Tags: KiwiSaver Retirement

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The information on this site is intended as a guide only. The information is of a general nature and does not and cannot ever constitute personal advice.
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