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SUPPLEMENTARY RETIREMENT SCHEME (SRS)
What investment instruments can I purchase using my SRS funds?
You may invest in a wide range of financial assets, including those offered by financial institutions (product providers) other than your SRS operator. Please approach your product providers for information on the products they are offering for SRS as the decision on whether to offer a product to SRS monies generally lies with them
. 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.
Trust nomination is not allowed for life insurance products purchased using SRS funds.
You should note that investment choices are made on a caveat emptor basis.
Currently, overseas investments may not be available to members.
When can I sell the investments bought using my SRS funds?
Does the use of SRS funds for investment constitute a withdrawal from the account?
Must all proceeds from the sale of my SRS investment intruments be returned to my SRS account?
Is there a guaranteed rate of return on the investments I make with my SRS funds?
Is there any interest paid on the balance in the SRS account, and if yes, what is the interest rate?
The interest rate on funds in SRS accounts are set by the market. Each SRS operator decides on the interest, if any that it pays on funds in the SRS account. You may wish to approach the SRS operators for further information as they would be better placed to advise you.
What happens if the SRS operator or the financial institution where I make my SRS investments goes bankrupt? Can I still get back my money since it is meant for my retirement?
Savings and investment products, including SRS, placed with financial institutions are not guaranteed against losses in the event of the financial institution's bankruptcy. When placing their monies with any financial institution, investors should assess and monitor for themselves the financial soundness of that institution.
What investment products can I purchase within SRS? Is there a list of approved SRS investment products?
The Government has few restrictions on SRS investments with the exception of direct property investments and certain insurance products. You should be able to make a wide variety of investments, including shares, insurance, bonds, unit trusts and fixed deposits
We currently do not maintain a list of financial institutions offering products under SRS as this is a commercial decision on the part of the product providers and SRS operators. We suggest you seek advice from the financial institutions which you are interested in purchasing products from.
Please approach your product providers for information on the products they are offering for SRS as the decision on whether to offer a product to SRS monies generally lies with them.
Why is it that I cannot use my SRS funds to purchase the investment product I want? The range of investment products in SRS is limited.
The decision on whether to offer a product to SRS monies generally lies with product providers. The Government prescribes few restrictions on the range of possible SRS investments, other than those on certain insurance products and property investments. You may wish to take up the matter with your product provider.
Are ETFs (Exchange Traded Funds) which are traded in Singapore Stock Exchange eligible SRS investments?
The Government does not have any restriction on the use of SRS money for the purchase of Exchange Traded Funds (ETFs) listed on the Singapore Stock Exchange.You may wish to make some enquiries with your SRS operator on the possibility of using your SRS funds to purchase ETFs.
Are dividends received from unit trusts purchased with SRS funds taxable?
One-tier exempt dividends and distributions from unit trusts purchased with SRS funds and deposited into the SRS account are not taxed when they are credited into the SRS account. However, tax will be imposed on the amount subsequently withdrawn from the SRS account.
Can I use the SRS funds to exercise the stock options issued by my company?
The Government does not restrict the exercise of stock options within SRS, provided that the following conditions are met:
The monies used to exercise the stock options must come from the SRS account;
The shares from the exercise of the stock options must be retained within the SRS account; and
The proceeds from the sale of the shares (from the exercise of the stock options) must be returned to the SRS account.
The conditions listed above are also applicable for most other investments.
We advise that you approach your SRS operator for more information.
Can I surrender my annuity policy after my SRS account is deemed closed i.e. 10 years from the date of the first withdrawal made having attained the statutory retirement age that was prevailing when I made my first SRS contribution?
An SRS member is not allowed to surrender the policy after the SRS account has been closed or deemed closed.
Must the investment mature when one reaches the prescribed retirement age, i.e. currently at age 62? E.g. can an investor purchase a single-premium endowment plan maturing at age 62, another maturing at age 63, and so on until age 71?
The investment need not mature at the prescribed retirement age. An investor may purchase a single-premium endowment plan maturing at age 62, another maturing at age 63, etc. If the investment is a life annuity, you will be taxed on 50% of the total annuity payouts each year, for as long as the annuity payouts are received. If the investment is not a life annuity and matures beyond the ten-year withdrawal period, it will be valued and taxed at 50% tax concession at the end of the ten-year period.
Can a customer purchase a single premium endowment policy that matures at age 65 under SRS? What happens to the cash proceeds upon maturity?
An SRS account holder may purchase a single premium endowment policy that matures when he/she reaches the age of 65. The cash proceeds upon the maturity of any investment (including a single premium endowment policy) would generally have to be returned to the SRS account.
How long will it take before I can utilize my money in the SRS account for investment after I have contributed it to my SRS account?
You should generally be able to utilise your SRS monies for investment once your SRS operator has confirmed the receipt of the monies (for example after it has cleared your cheque) and credited the monies to your SRS account. You may wish to check with your SRS operator on the actual time lag between making a contribution and being able to make an SRS investment.
Can I do a direct purchase of equities on the Singapore Stock Exchange or any other exchange in the world?
The Government does not prohibit a person from purchasing shares listed in Singapore or any other countries. The range of investment products on offer generally depends on product providers; we suggest you consult the financial institution which you are interested in purchasing products from if you wish to purchase a share listed on a foreign exchange. Currently, overseas investments may not be available to members.
If I buy an annuity using my SRS funds, will the monthly annuity payouts be paid into my SRS account or can they be paid into my bank account directly? Will I be taxed only on 50% of the total annuity payouts for each year of the 10-year withdrawal period? If I live longer than that, will my monthly annuity payouts be no longer taxable under the SRS scheme?
If your SRS account is still open, your monthly annuity payouts must be returned to the SRS account before you withdraw them. If your SRS account is closed, your monthly annuity payouts may be paid into your bank account directly. After reaching the prevailing statutory retirement age at the point of first SRS contribution, an SRS member is taxed on only 50% of the total annuity payouts each year, perpetually.
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Last Reviewed on 15 Aug 2011
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