Changes To The Supplementary Retirement Scheme (SRS) Contribution Caps From 1 Jan 2004

The SRS contribution caps has been adjusted from 1 Jan 2004 to reflect the changes in CPF contribution caps.

2. The SRS is a voluntary retirement scheme that allows Singaporeans and PRs to supplement their CPF savings for old age, and foreigners working in Singapore to set aside long term savings. The SRS offers attractive tax benefits. Contributions to SRS are tax-exempt, investment returns are accumulated tax-free (with the exception of Singapore dividends), and only 50% of the withdrawals at retirement are taxable. As the caps on contributions to SRS are pegged to the CPF scheme, changes in the CPF contribution caps will have an impact on the SRS caps.

3. The CPF Ordinary Wage (OW) monthly ceiling has been lowered from $6,000 to $5,500 (on 1 Jan 2004), will be lowered to $5,000 (on 1 Jan 2005) and to $4,500 (on 1 Jan 2006). To reflect this change from 1 Jan 2004, the SRS contribution caps for income from employment will be as shown in the following table (The current caps can be found in Annex A).

Table: New SRS Contribution Caps from 1 Jan 2004