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1.
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What investment instruments can I purchase using my SRS funds?
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You may invest in a wide range of financial assets, including those offered by financial institutions (product providers) other than your SRS Operator. Your product providers will be able to provide information on the products that they are offering for SRS. However, direct property investments are not allowed. As for life insurance products, the following conditions shall apply:
- Only single premium products are allowed (including recurrent single premium products, encompassing both annuity and non-annuity plans).
- Life cover (including total and permanent disability benefits) will be capped at 3 times the single premium.
- Plans can allow for a contribution continuation feature/benefit upon disability.
- Other types of life insurance e.g. critical illness, health and long-term care are excluded.
You should note that investment choices are made on a caveat emptor basis.
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2.
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How is my SRS contribution cap determined?
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Your SRS contribution cap is determined by multiplying the appropriate SRS contribution rate by an absolute income base.
SRS contribution rate
The SRS contribution rate for Singaporeans and Singapore Permanent Residents (SPRs) is 15% while the SRS contribution rate for foreigners is 35% in view of the fact that they do not enjoy tax relief on their CPF contributions. If you are a foreigner, you are required to give a written declaration of your foreign status for the calculation of your SRS contribution cap. You must make such a declaration on an annual basis for the SRS Operator to calculate your SRS contribution cap.
Income base
The absolute income base is $76,500 per annum.
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3.
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Why is there a cap on SRS contribution?
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SRS is meant to help employees and self-employed to save part
of their income, on top of their CPF contributions, for retirement, not
give asset-rich or high-income individuals an undue tax advantage.
There is hence a cap on the SRS contributions. The 15% cap for locals'
contributions was decided after a public consultation in the early part
of year 2000. The absolute income base is similar to that for CPF contributions
(i.e. capped at a salary of $4,500 per month from 1 January 2006).
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4.
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What documents do I need to submit to the SRS operator when I wish to make SRS contributions?
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If you are a Singaporean Citizen or Singapore Permanent Resident, no documents are needed.
If you are a foreigner, you are required to give a written declaration of your foreign status for the calculation of your SRS contribution cap. You must make such a declaration on an annual basis for the SRS Operator to calculate your SRS contribution cap.
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5.
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If I have made a withdrawal from my SRS account, can I still make SRS contributions
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If you withdraw funds from your SRS account before retirement, you can
still continue to contribute to SRS after the withdrawal.
However, you may no longer contribute to SRS if you start withdrawing from your SRS account:
(i) at or after the statutory retirement age that was prevailing when you made
your first SRS contribution; or
(ii) on medical grounds.
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