Sunday, September 14, 2008

New SRS Rules from 1st Oct 08

Back to SRS again. Today just want to update you the 4 changes to SRS come 1st Oct 08.

1) Contribution by Employers Allowed
* Previously, Employers cannot contribute to employee's SRS account.
* From 1st Oct, Employers will be able to contribute to their employees' SRS accounts and enjoy tax relief on these contributions made on their behalf.
==> This is to encourage Employers to contribute additional pension fund for their employees using the SRS system.

2) Contribution Age Limit Removed
* Previously, SRS member can contribute to their SRS account until age 62.
* From 1st Oct, they can contribute to their SRS account until the day they initiate the first penalty free withdrawal.
==> This is to encourage SRS member to withdraw their funds later due to longer lifespan of Singaporeans.

3) Flexible Withdrawal Timeframe
* Previously, SRS member must withdraw all their SRS savings by the age of 72
* From 1st Oct, they can still withdraw the SRS savings over 10 years. However the 10 years start from the year they initiate their first penalty free withdrawal.
==> The timeframe to withdraw the funds is still 10 years but at least they don't force you to start the 10 years from age 62.

4) Removal of Employment / Business / Income requirement
* Previously, only those who have employment or business income can contribute to the SRS.
* From 1st Oct, this requirement to prove employment or business income are no longer required.
==> This will remove the requirement to bring your IR8A to the banks for account opening. This will encourage those who have other passive income like Rental or Dividend income to also contribute SRS for the tax relief.

1 comment:

Anonymous said...

Good work , Adrain. Unlike your former NTUC colleagues' blog your blog is more informative and educational. your ntuc colleagues' are full of product advertisements and other craps. So you know they are product pushers.