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The SRS is part of the Singapore government’s
multi-pronged strategy to address the financial needs
of a greying population, which were highlighted in the
Report of the Inter-Ministerial Committee (IMC) on the
Ageing Population, released in November 1999.
The SRS complements the Central Provident Fund (CPF).
CPF savings are meant to provide for housing and medical
needs and for basic living needs after retirement. Unlike
the CPF scheme, participation in SRS is voluntary.
Participants can contribute a varying amount to SRS
(subject to a cap) at their own discretion. The contributions
may be used to purchase various investment instruments.
With the SRS, the government hopes to encourage Singaporeans
to save more for their old age, by means of voluntary
contributions to their SRS accounts. The SRS will be
effective from 1st April 2001. It will be operated by
the private sector.
The SRS offers attractive tax benefits.
Contributions to SRS are eligible for tax relief, investment
returns are accumulated tax-free(with the exception
of Singapore dividends from which tax is deducted or
deductible by the payer company under section 44 of
the Income Tax Act) and only 50% of the withdrawals
from SRS are taxable at retirement.
NEW! UPDATED SRS HANDBOOK - This handbook tells
you how the SRS works, and who can participate in it.
It also explains the benefits of the scheme, and provides
information on when and how you can make contributions
or withdrawals, as well as where you can invest your
SRS funds.
Download
In Budget 2008, the Minister for Finance announced
several enhancements to the SRS. The changes are listed
in the following table. They will take effect from 1
October 2008.
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1 |
Employers cannot directly contribute
to their employees’ SRS accounts. |
Employers can contribute to their
employees’ SRS accounts, subject to the current
SRS contribution limits, and claim full tax deduction.
SRS members will enjoy tax relief on the contributions
made by their employers. |
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2 |
SRS members can contribute up to
the prevailing statutory retirement age.
They can withdraw their SRS monies over 10 years
from the prevailing statutory retirement age. |
SRS members can contribute beyond
the prevailing statutory retirement age, up to the
point of their first penalty-free withdrawal.
They can withdraw their SRS monies over 10 years
from the date of their first penalty-free withdrawal.
Withdrawals will continue to be penalty-free only
if they take place after the statutory retirement
age that was prevailing at the time of the first
contribution. |
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3 |
Individuals without any earned employment
income in the previous year cannot contribute to
SRS in the current year. |
Individuals without any earned employment
income in the previous year can contribute to the
SRS in the current year |
The Budget Speech 2008 Annex on these changes can be
found at http://www.mof.gov.sg/budget_2008/speech_p5/annexb-6.pdf
For members who are aged 62 or above on 1 October 2008,
MOF will provide a one-off transitional concession so
that they can take advantage of the new rules.
- Those who have made penalty-free withdrawals and/or
closed their accounts before 1 October 2008, but wish
to continue to contribute to the SRS, may do so as
long as they make a new SRS contribution between 1
October 08 and 31 December 2008. They can withdraw
their SRS monies anytime thereafter, and their 10-year
withdrawal period will begin when they make their
first penalty-free withdrawal. Once they start withdrawing,
they will no longer be able to contribute again.
- For those who do not wish to start contributing
again or have not begun withdrawals, the new rules
will automatically apply and their withdrawal period
will end ten years from the date of their first penalty-free
withdrawal.
For more details of the Budget 2008 changes and the
transitional concession, please refer to the FAQ and
diagram below.
Download
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FAQ
on Budget 2008 SRS Changes
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Illustration
of SRS Transitional Concession |
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