Parliamentary Question by Associate Professor Walter Theseira:
To ask the Minister for Finance with regard to the Supplementary Retirement Scheme (SRS) for each of the last five years (a) what is the number of contributors, by marginal income tax rate of assessable income (ie pre-SRS contribution); (b) what are the amounts contributed, by marginal income tax rate of assessable income; and (c) whether the Ministry has studied the elasticity and determinants of SRS contribution behaviours and the results of such studies.
Parliamentary Reply by Minister for Finance, Heng Swee Keat:
The Supplementary Retirement Scheme (SRS) was introduced in 2001 as a tax-incentivised scheme to encourage individuals to save voluntarily for retirement, beyond the basic provisions of the CPF. Taken together, the CPF and SRS comprise our system of mandatory and voluntary contributions to help people save for retirement.
Each year, MOF publishes the total number of SRS account holders and total SRS contributions. These statistics, dating back to the scheme’s inception in 2001, are available on the MOF website. In a given year, about 60% of the account holders contribute to their account.
90% of those who made an SRS contribution in the past year have an Assessable Income of more than $80,000, which corresponds to an average marginal tax rate of about 15.0%. In this group, the average contribution in a year has been around $14,000.
The remaining 10% who contributed in the past year have an Assessable Income of below $80,000. The average contribution in a year has been around $9,000. Their average marginal tax rate is about 3.2%. This contribution pattern has been fairly stable over the past five years.
The details of elasticity and determinants of SRS contribution behaviour are complex. Possible factors include awareness of the scheme, income levels, and personal willingness to set aside more for retirement. Nevertheless, the government will continue to study this matter, together with academics and researchers, to better understand how Singaporeans think about financial planning for retirement.