Higher caps for contributions to voluntary savings scheme - Singapore Budget 2015

Higher caps for contributions to voluntary savings scheme - Singapore Budget 2015
Published on Feb 24, 2015 2:40 AM
By Grace Leong

THE caps on contributions to the Supplementary Retirement Scheme (SRS) have been raised to $15,300 for Singapore citizens and permanent residents, and $35,700 for foreigners. The SRS is a voluntary retirement savings scheme that complements the Central Provident Fund (CPF) system. Previously, Singaporeans could put up to $12,750 a year into their SRS accounts. For foreigners, the sum was $29,750 as they do not contribute to CPF. The move to increase caps on SRS contributions is in line with the raising of the income ceiling for CPF contributions to $6,000, from $5,000, to help middle-income workers. Both changes will take effect from Jan 1 next year. Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam outlined the rationale for the enhancements to retirement savings yesterday. "In line with the higher CPF salary ceiling, we will raise the contribution cap within the Supplementary Retirement Scheme, which offers tax incentives to encourage voluntary retirement savings to complement the CPF." Ms Kerrie Chang, partner, human capital, at Ernst & Young Solutions, said: "With a higher CPF salary ceiling, an increase in the maximum allowable contributions to the Supplementary Retirement Scheme will allow taxpayers to claim a higher tax relief. This may further encourage them to voluntarily put aside more for their retirement needs." Established 15 years ago, the scheme allows anyone to open an SRS account at a local bank. Every dollar put into the account is tax- free. This reduces a person's taxable income, and thus lowers the tax bill. The SRS attracted 91,652 savers between 2001 and 2013. gleong@sph.com.sg