Supplementary retirement fund rules relaxed?, Latest Business News - The New Paper

Supplementary retirement fund rules relaxed?

This article is more than 12 months old

The Government is open to allowing Singaporeans to use funds from their Supplementary Retirement Scheme (SRS) account to buy Singapore Savings Bonds (SSBs).

But the benefit of this move may not be worth the cost, Minister for Education (Higher Education and Skills) Ong Ye Kung said in Parliament yesterday.

The SSB is a risk-free financial instrument offered by the Government. The SRS is a voluntary retirement savings programme that complements the Central Provident Fund system.

Members can contribute varying amounts to the SRS as often as they wish to - subject to a yearly cap - before Dec 31 each year, and use the money in the SRS to invest in approved instruments.

Responding to a question by West Coast GRC MP Patrick Tay, Mr Ong, who was speaking on behalf of Deputy Prime Minister Tharman Shanmugaratnam, said the Government has been studying the option.

But he noted that there is a cost involved.

"We have to assess whether it can benefit a sufficiently broad segment of people.

"As of now, the additional benefits are not clear since SRS monies can already be invested in Singapore Government Securities, which offer the same returns as savings bonds if held to maturity," he said.

Mr Tay had also asked whether the purchase limits of SSBs could be raised. Currently, the maximum investment amount for each SSB issue is $50,000 and the maximum individual holding is $100,000.

Mr Ong said these limits "are not cast in stone" but added: "However, so far, only a small minority of Savings Bond investors have reached the boundaries of these limits."

"We will monitor the take-up for some time before considering whether raising the limits would benefit a broad proportion of savers," he said. - THE STRAITS TIMES