Govt continues to review SRS regularly

We thank Mr Eric Yip Kok Leong for the suggestions in his letter “Relook SRS withdrawal policies to better align with retirement needs” (Jan 2).

The Supplementary Retirement Scheme (SRS) is a voluntary retirement savings scheme that complements the Central Provident Fund (CPF) system. It already offers generous tax benefits to encourage savings. Contributions to SRS are eligible for tax relief, and when withdrawals are made on or after the applicable statutory retirement age, only 50 per cent of the withdrawn amount is subject to tax.

Under the current framework, SRS members with no other taxable income may withdraw up to $40,000 per year tax-free. Over the 10-year withdrawal period, an SRS member can withdraw up to $400,000 without incurring any tax. This feature ensures that SRS provides meaningful tax concessions, while maintaining consistency with Singapore’s progressive tax system.

Those who prefer longer streams of income may consider topping up their CPF accounts to obtain higher lifelong payouts through CPF LIFE, or purchase life annuities using SRS monies. Life annuities are exempt from the 10-year rule, as they provide lifetime payouts, which other dividend-paying investments may not. 

Over the years, the Government has made refinements to the SRS, including increased contribution caps and more flexible withdrawals in the form of investments.

The Ministry of Finance continues to review the SRS regularly, taking into account demographic trends, retirement adequacy and fiscal sustainability.

Farah Abdul Rahim
Director, Communications and Engagement
Ministry of Finance