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SupplementaryRetirement

Scheme (SRS)

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Contents03 What is SRS?

05 Why should I join SRS?

08 How can I contribute to my SRS account?

10 How can I invest my SRS funds?

12 How do I withdraw funds from my SRS account?

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This handbook explains:• how SRS works and who can participate• thebenefitsofSRS• when and how you can make contributions to SRS• how you can invest your SRS funds• when and how you can make withdrawals from SRS

The Supplementary Retirement Scheme (SRS) is part of the government’s strategy to address the financial needs of an ageing population through helping Singaporeans to save more for their old age. It is operated by three banks: DBS Bank (DBS) Ltd, Overseas-Chinese Banking Corporation (OCBC) Ltd and United Overseas Bank (UOB) Ltd.

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The SupplementaryRetirement Scheme (SRS)is a savings scheme that

complements your Central Provident Fund (CPF) savings for retirement.

Participation in SRS is voluntary.You can contribute any amount

to your SRS account, subject to a cap. These contributions can be invested

to boost your retirement savings.

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WHAT IS

SRS?

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WHY SHOULD

I JOIN

SRS? The Benefits Save more for your retirement and pay less tax.

• Enjoy tax deferment on your SRS contributions. Each dollar of SRS contribution will reduce your taxable income by a dollar.

• 50% of your accumulated SRS savings will not be taxed (i.e. a 50% tax concession) when you withdraw after reaching the statutory retirement age (this refers to the statutory retirement age prevailing at the time of your firstcontribution).YoumayspreadyourSRSwithdrawals over 10 years.

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Mr Tan is 40 years old and has an annual assessable income of $100,000. He contributes $15,300 to his SRS account every year from the age of 40. The $15,300 he contributes to the SRS account will be tax-exempt for that year (i.e. only $90,000 of his income will be subjected to tax for that year).

If Mr Tan invests his SRS monies and achieves a rate of return of 4% annually, he would have saved more than

$545,000 when he reaches 62 years old.

Example

In total, Mr Tan would have enjoyed tax savings of about

$34,000 by saving in SRS over 22 years.

When Mr Tan retires at age 62, he can enjoy a 50% tax concession for his SRS withdrawals over a ten-year period. He can withdraw $40,000 from his SRS account annually without tax (compared to $20,000 without the tax concession).

SRS

$40,000*Withdraw up to

50% tax concession over a ten-year withdrawal period

$15,300 yearly contribution

to SRS account with 4% returns per year

40 years old$100,000 annual income

savings of

$545,000

62 years old retiree with no income

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Who can join• All Singaporeans, Permanent Residents (PRs) and foreigners• At least 18 years old• Not an undischarged bankrupt

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HOW CAN

I CONTRIBUTETO MY SRSACCOUNT?

$15,300Singaporeans and PRs

$35,700Foreigners

Annual Contribution Cap (as of 2016)The maximum amount you can contribute into your SRS account in any year is as follows:

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YoumaycontributeanyamounttoyourSRSaccountasmanytimesasyou wish within the year. However, the total amount contributed should not exceed the annual SRS contribution cap.

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Tax relief on contributions (For tax residents only)The amount of tax relief you enjoy on your SRS contributions is granted automatically by the Inland Revenue Authority of Singapore (IRAS) basedontheinformationprovidedbyyourSRSoperator.Youdonotneed to make a claim in your annual income tax return.

Tax relief will be granted in the year following the year of contribution, i.e. if you made an SRS contribution in year 2014, the tax relief will be giveninYearofAssessment(YA)2015.

YoucancontributetoyourSRSaccountuptoanyage, if youhavenotbenefitted from the50% taxconcession on any withdrawal.

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• Inawiderangeoffinancialassetsincluding:

• Shares (e.g. those listed on the Singapore Exchange) • bonds • unit trusts • fixed deposits • insurance

• Youarefreetoinvestinproductsofferedby otherfinancialinstitutions(productproviders) other than your SRS operator.

Please invest with care.

HOW CAN

I INVEST MY SRS FUNDS?

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The following restrictions on investments apply:

• Direct property investments are not allowed.• For life insurance products: o Only single premium products are allowed (includes recurrent single premium products, encompassing both annuity and non-annuity plans). o Life cover (including total and permanent disability benefits)will be capped at 3 times the single premium. o Trust nomination is not allowed for life insurance products purchased using SRS funds.

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AM I ALLOWED TO

WITHDRAWFUNDS FROM MY SRS ACCOUNT?

Withdrawal at or after statutory retirement ageFromyourfirstwithdrawalmadeafterreachingthestatutoryretirementage, you will have up to 10 years to withdraw the full amount:

• you may withdraw as many times as you wish without any penalty; and• 50% of these withdrawals will be tax-exempt.

The statutory retirement age as at 2014 since the inception of SRS is 62 years old.

Youmaywithdrawanyamountofcashor investments fromyourSRSaccount.

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Closure of the ten-year withdrawal windowAt the end of the ten-year withdrawal period, if there is still money or investment remaining in your SRS account,

50% of such balance will be subject to income tax.

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Withdrawal before the statutory retirement ageYou can withdraw funds from yourSRS account at any time, but:

100% of the sum withdrawn will be subject to tax; and

a 5%premature withdrawal penalty on the sum withdrawn will be imposed, unless withdrawal is made under the following exceptional circumstances:

• death • medical grounds • bankruptcy • full withdrawal of the SRS balance by a foreigner who has maintained his SRS account for at least 10 years from the dateofhisfirstcontribution

You can continue to contribute to yourSRSaccount if youmadeawithdrawal before the statutory retirement age. However, no further contributions will be allowed once you make a withdrawal from your SRS account: (i) after you reach the statutory retirement age; or(ii) on medical grounds.

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For more information or to open an SRS account, please contact one of the approved SRS operators.

SRS Operator Contact Details

DBS Tel: 1800 111 1111 http://www.dbs.com.sg/personal/investments/ supplementary-retirement-scheme/default.page

OCBC Tel: 1800 363 3333 http://www.ocbc.com/personal-banking/Investments/ supplementary-retirement-scheme.html

UOB Tel: 1800 538 8011 http://www.uob.com.sg/personal/investments/ financial/uob_srs_account.html

Administrator Contact Details

Inland Revenue Email: taxqueries@iras.gov.sg

Tel: 1800 356 8300 (Mondays to Fridays, 8am to 5pm)

Facsimile: (65) 6351 3636 http://www.iras.gov.sg/irashome/page04.aspx?id=138

Authority ofSingapore

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Ministry of Finance100 High Street#06-03 The TreasurySingapore 179434