The Supplementary Retirement Scheme (SRS) was set up in April 2001 as part of the Singapore government's multi-pronged strategy to address the financial needs of a greying population.
The SRS complements the Central Provident Fund (CPF). Unlike the CPF Investment Scheme, participation in the 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 approved investment instruments.
One advantage of SRS is that it offers attractive tax benefits. Contributions to SRS are eligible for tax relief, investment returns are accumulated tax free (with the exception of dividends), and only 50% of the withdrawals from SRS are taxable at retirement.
To Open SRS AccountYou can open an SRS account at any of the 3 SRS operators listed below:
Development Bank of Singapore (DBS) Ltd
Overseas-Chinese Banking Corporation (OCBC) Ltd
United Overseas Bank (UOB) Ltd
How does it work?
Making contributions
All SRS contributions are to be made in cash at any time before 31st December each year.
To make a contribution, an SRS account must first be opened.
The amount of contribution is subject to a cap. The SRS contribution cap is no longer based on the individual’s actual earned income but on a common absolute cap of $85,000 i.e. 17 months of the prevailing CPF salary ceiling of $5,000. This amount is 15% of $85,000 or $12,750 for Singaporeans and Permanent Residents, and 35% of $85,000 or $29,750 for foreigners.
on or after the statutory retirement age prevailing at the time of first contribution
medical grounds
death
The SRS complements the Central Provident Fund (CPF). Unlike the CPF Investment Scheme, participation in the 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 approved investment instruments.
One advantage of SRS is that it offers attractive tax benefits. Contributions to SRS are eligible for tax relief, investment returns are accumulated tax free (with the exception of dividends), and only 50% of the withdrawals from SRS are taxable at retirement.
To Open SRS AccountYou can open an SRS account at any of the 3 SRS operators listed below:
Development Bank of Singapore (DBS) Ltd Overseas-Chinese Banking Corporation (OCBC) Ltd United Overseas Bank (UOB) LtdHow does it work?
Making contributions
All SRS contributions are to be made in cash at any time before 31st December each year.
To make a contribution, an SRS account must first be opened.
The amount of contribution is subject to a cap. The SRS contribution cap is no longer based on the individual’s actual earned income but on a common absolute cap of $85,000 i.e. 17 months of the prevailing CPF salary ceiling of $5,000. This amount is 15% of $85,000 or $12,750 for Singaporeans and Permanent Residents, and 35% of $85,000 or $29,750 for foreigners.
Making withdrawals from your SRS Account
Withdrawals can be made in any amounts, at any time. However, if the withdrawal is made before the statutory retirement age, 100% of the sum withdrawn will be subjected to the individual's marginal tax rate. On top of that, a 5% penalty will be imposed.
On the other hand, only 50% of the withdrawals will be taxed if withdrawals are made under the following conditions:
Withdrawals can be made in any amounts, at any time. However, if the withdrawal is made before the statutory retirement age, 100% of the sum withdrawn will be subjected to the individual's marginal tax rate. On top of that, a 5% penalty will be imposed.
On the other hand, only 50% of the withdrawals will be taxed if withdrawals are made under the following conditions:
on or after the statutory retirement age prevailing at the time of first contribution medical grounds death
Withdrawals made upon retirement or on medical grounds can be spread over a maximum of 10 years for optimal tax management.
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