Tuesday, March 11, 2008

Changes to SRS from 1 Oct 2008

  1. Employers will be able to contribute directly to the SRS accounts of their employees, and get the full tax deduction on their contributions.
  2. Previously, members could only contribute until the statutory retirement age of 62. Now, the 10-year withdrawal period will only begin when they make their first penalty-free withdrawal. Effectively, the age limit for members to make SRS contributions have been removed.
  3. Individuals without earned income in the previous year will now be allowed to contribute to the SRS in the current year

For members who are aged 62 or above on 1 October 2008, there will be a one-off transitional concession for them to take advantage of the new rules. Those who have already started making penalty-free withdrawals or closed their accounts can still contribute to the SRS - as long as they do it between 1 October 2008 and 31 December 2008. However, point 2 still applies.

Contributions to SRS will still be capped at $11,475 annually for Singaporeans and Permanent Residents, and $26,775 for foreigners.

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