The Supplementary Retirement Scheme is part of the Singapore government’s multi-pronged strategy to address the financial needs of a greying population by helping Singaporeans to save more for their old age. It began in 2001 and is operated by the private sector. 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. SRS members 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.
The SRS offers attractive tax benefits. Contributions to SRS are eligible for tax relief. SRS contributions made on or after 1 Jan 2017 are subject to a cap on personal income tax relief of $80,000 per Year of Assessment from Year of Assessment 2018.
Investment returns are accumulated tax-free and only 50% of the withdrawals from SRS are taxable at retirement (referred to as a “50% tax concession”).
Personal Income Tax Relief Cap from 1 Jan 2017 The personal income tax relief cap of $80,000 applies from Year of Assessment 2018 (when income earned in 2017 is assessed to tax) to SRS contributions made on or after 1 Jan 2017. As SRS contributions made cannot be refunded, SRS members who make SRS contributions on or after 1 Jan 2017 should take note of the overall personal income tax relief cap. They should evaluate whether they would benefit from tax relief on their SRS contributions, and make an informed decision accordingly.
Latest Enhancements to the SRSWe review and enhance the SRS periodically to better meet the retirement needs of SRS members. Some recent enhancements to the SRS include:
- Allowing SRS withdrawals to be made in the form of investments from 1 July 2015
- Providing a tax exemption of up to $400,000 for SRS funds deemed withdrawn upon demise, or withdrawn in full on the grounds of terminal illness
- Increasing the SRS contribution cap.
Increase in SRS Contribution CapFrom 1 January 2016, the annual SRS contribution cap will be increased to:
- $15,300 for Singapore Citizens and Permanent Residents; and (ii)$35,700 for foreigners.