Progress has been made on arrangements that will allow retirement savings to be shifted between New Zealand and Australia, the Government said today.
Trade Minister Phil Goff said the proposed regime would free up billions of dollars which were locked in Australian retirement funds.
Mr Goff, Commerce Minister Lianne Dalziel and Agriculture Minister Jim Anderton met their Australian counterparts in Melbourne on Friday, when they marked the 25th anniversary of Closer Economic Relations (CER) between the two countries.
Attending the talks were Australia's Trade Minister Simon Crean, Superannuation Minister Nick Sherry and Agriculture Minister Tony Burke.
"Perhaps the most important single issue of agreement for ordinary New Zealanders was that on progressing retirement savings portability between the two countries," Mr Goff said.
"A memorandum of understanding to formalise portability arrangements will be signed in October.
"Legislation in 2009 will then bring the proposed portability regime into effect."
Mr Goff said that in Australia, employers must contribute 9 percent of wages into a locked-in retirement savings account under the Australian Superannuation Guarantee (ASG).
New Zealanders who have worked in Australia and accumulated compulsory pension contributions under the ASG are unable to repatriate their savings to New Zealand before reaching the Australian age of retirement.
He said the introduction of KiwiSaver in July 2007 presented an opportunity to address this problem, because the scheme was judged as mutually compatible with the ASG.
This allowed savers to transfer their accounts between the two countries.
"Superannuation Minister Nick Sherry estimated that of the $13 billion in `lost accounts' under the ASG, a considerable amount of this money will belong to New Zealanders who have returned home," Mr Goff said.
"With portability, he has undertaken to have New Zealanders' accounts in the Australian system proactively identified. This would be a huge bonus for many New Zealanders."
Mr Goff said the ministers made progress in other areas of CER, including agreements to enable resolution of trans-Tasman civil disputes more effectively and at lower cost and the re-negotiation of the Australia-New Zealand Double Tax Agreement.