We thank Mr Wan Chee Khoon for his letter “Can SRS accounts be converted into savings accounts at retirement age?” (Nov 28).

The Supplementary Retirement Scheme (SRS) is meant to help Singaporeans save more for their retirement. SRS accounts have a different function from savings accounts. As such, there are different rules and implications for contributing to, withdrawing from, and closing SRS accounts, depending on the nature of the transaction.

For example, individuals can contribute to and make withdrawals from their SRS account at any time.

However, for withdrawals made before the statutory retirement age prevailing at the time of the member’s first contribution, 100 per cent of the sum withdrawn will be subject to tax. A 5 per cent penalty for such early withdrawals will also be imposed.

Withdrawals made at or after the statutory retirement age prevailing at the time of the member’s first SRS contribution will enjoy a 50 per cent tax concession for a period of 10 years (“10-year withdrawal period”).

At the end of the 10-year withdrawal period, the SRS account will be deemed closed and 50 per cent of the balance remaining will be subject to income tax.

You can already go online to open SRS accounts, as well as contribute and invest SRS monies. There are no legislated requirements for in-person attendance for SRS withdrawals or account closures.

Nonetheless, the SRS operators do require SRS members to turn up in-person for withdrawals and account closures, to ensure members are aware of their eligibility and the appropriate conditions, tax implications and/or penalties (if any) relating to the nature of their intended transaction.

The Government will continue to work with SRS operators to encourage more seamless SRS transactions where possible.

Farah Abdul Rahim
Director, Communications and Engagement
Ministry of Finance