Currently, an SRS member can withdraw up to $40,000 per year from his SRS account tax-free on or after reaching the prescribed retirement age, assuming that he has no other taxable income. Over the maximum withdrawal period of 10 years, he can withdraw up to $400,000 tax-free.
However, if an SRS member passes away before completing his SRS withdrawals or made a full withdrawal on the grounds of terminal illness, he would not be able to enjoy the full benefit from spreading out his SRS withdrawals over a 10-year period. Hence, from year of assessment 2016, a tax exemption of up to $400,000 would be granted for SRS funds deemed withdrawn upon an SRS member’s demise or a withdrawn in full on the grounds of terminal illness.
Next, from July 2015, SRS members will be able to apply to their SRS operators to withdraw an SRS investment by transferring the investment out of their SRS accounts (e.g. into their personal Central Depository (CDP) account), without having to liquidate their SRS investments. This is only applicable for the following types of withdrawals, which qualify for the 50% tax concession:
- withdrawal on or after the statutory retirement age prevailing at the time of an SRS member’s first contribution (currently age 62);
- withdrawal on medical grounds;
- withdrawal in full by a foreigner who has maintained his SRS account for at least 10 years from the date of his first contribution; and
- actual withdrawal made by an SRS member or his legal personal representative (if he is deceased) from his SRS account, after the SRS investment that is to be withdrawn had earlier been deemed withdrawn upon death or after the expiry of the 10-year withdrawal period.
All other withdrawals from an SRS account, including premature withdrawals, must be made in cash.
Inflation in Singapore fell 0.6% year-on-year in December, compared to –0.8% in November. Core inflation, which excludes the cost of accommodation and private road transport, rose to 0.3% from 0.2% in November.
Private road transport cost fell by 1.1% in December, compared to the 1.7% decline in November. Accommodation cost dropped by 3% in December, same as the decline in November. However, overall services inflation increased to 0.9% in December, up from 0.7% in November, due to a faster pace of increase in holiday travel expenses and a smaller decline in telecommunication services fees. Meanwhile, food inflation was down to 1.5% last month from 1.6% in November, due to the moderation of increase in prices of prepared meals such as hawker food.
For the whole of 2015, inflation fell by –0.5%, down from 1% in 2014. This is the first decline since 2002. Core inflation eased to 0.5% in 2015, compared to the 1.9% in 2014.
Core Inflation is expected to be between 0.5% and 1.5% in 2016 while overall inflation is projected to average between –0.5% and 0.5% in 2016, according to MAS and MTI.
CPF contribution ceiling will be increased from $5000 to $6000 with effect from 1 Jan 2016. This will help to boost another $170 from employer and $200 from employee for those earning more than $6000 monthly salary and below 55 years old. Though the take-home pay for these employees will reduce by $200, the savings for retirement will be boosted by these extra savings.
CPF CONTRIBUTION RATE
The CPF contribution rate for employee 50 years and above will be increased from 1 January 2016.
- Above 50 to 55, employer CPF rate will be increased from 16% to 17%, while employee CPF rate will be increased from 19% to 20%;
- Above 55 to 60, employer CPF rate will be increased from 12% to 13%, with no change to the current employee CPF rate of 13%;
- Above 60 to 65, employer CPF rate will be increased from 8.5% to 9%, with no change to the current employee CPF rate of 7.5%.
In addition, for CPF members aged 55 and above from 1 January 2016, the first $30,000 from the CPF accounts will earn extra 1% per annum, on top of the current 1% extra interest on the first $60,000 of their total CPF savings. That is,
Total CPF balance
|If in Special/Retirement/Medisave Accounts
||If in Ordinary Account
|Remaining balance above $60,000
This translates to extra $300 savings per year for the next 10 years before CPF Life payout starts at 65. Assuming the yearly $300 interest earned goes into the Retirement Account which earns 4% interest, this translates to $3,745 after 10 years. With higher amount in CPF Retirement Account, CPF members can expect higher payout from their CPF Life.
SUPPLEMENTARY RETIREMENT SCHEME
The caps on contribution to the voluntary retirement savings scheme, Supplementary Retirement Scheme (SRS) will be increased from 1 January 2016. For Singaporean and Permanent Resident, the cap will be increased from $12,750 to $15,300. The cap for foreigner will be increased from $29,750 to $35,700. This will help to increase the personal income tax savings, as the amount put into SRS will enjoy tax relief. Moreover, retirement cashflow will be improved when SRS money is allowed to be withdrawn without penalty from age 62 onwards.
Nation-wide hospitalization plan, MediShield Life, will be implemented on 1 November 2015. Ministry of Health has already identified 25,000 Singapore Citizens and Permanent Residents with serious pre-existing illnesses who will have to pay extra 30% extra premium for the next 10 years to cover the pre-existing illnesses. After which, they would pay the same premiums as their peers. If you belong to this group, you will receive a letter with details about your new MediShield Life coverage, premiums and subsidies, including the Additional Premiums. The various subsidies for MediShield Life premiums will also apply to Additional Premiums.
If you currently not insured with Medishield, you will also receive the letter soon to inform you on the premiums and subsidies. For others, you will only receive the letter one month before your plan is due for annual renewal from either the CPF Board (cover under MediShield) or your private insurer (cover under Integrated Shield Plan) with details about your premiums and subsidies for the MediShield Life component of your Integrated Shield Plan.
The broad categories of serious pre-existing illnesses are:
||Indicative examples (not exhaustive)
||Lung cancer, colorectal cancer, breast cancer, stomach cancer
||Parkinson’s disease, Muscular dystrophy, Amyotrophic lateral sclerosis (ALS)
|Heart or other circulatory system diseases
||Heart attack, Coronary artery disease, Chronic ischaemic heart disease
||Chronic obstructive pulmonary disease
||Alcoholic liver disease , Chronic hepatitis, Fibrosis or cirrhosis of liver
|Autoimmune/ Immune System diseases
||Systemic lupus erythematosus, Human Immunodeficiency Virus/ Acquired Immune Deficiency Syndrome (HIV/ AIDS)
||Congenital heart disease, Congenital renal disease, Biliary atresia
|Chronic condition with serious complications
||Hypertensive heart disease, Hypertensive kidney disease, Diabetes with kidney complications, Diabetes with eye complications
Those whose pre-existing conditions are less serious or are well-controlled, such as well-controlled diabetes, or hypertension with no complications, osteoarthritis, pre-cancers, fibroids or cysts or those who were hospitalized due to a one-off event, such as an accident or dengue are not subjected to the 30% additional premium.
The first Singapore bond was opened for application on 1st September 2015 and will close on 25 September 2015, 9pm. The total amount for this allocation is $1.2 billion.
You can apply in multiples of $500 up to $50,000 through DBS/POSB, OCBC or UOB ATMs, or through DBS/POSB’s Internet Banking portal. You will also need to have the individual CDP Securities account linked to any of your bank accounts as CDP is the custodian for Savings Bonds and it will process the applications, interest payments and redemptions. You may visit CDP’s webpage for information on opening your CDP Securities account.
The allocation will be conducted on 28th September 2015 and the bonds will be issued on 1 October 2015. The interest will be paid on 1st April and 1st October every year till maturity date on 1 October 2025. The interest for 1st year is 0.96% p.a., and 1.09% p.a. on second year. It will increases to 3.70% p.a. on the 10th year. So if you hold for 10 years till maturity, the compounded interest rate is 2.63%p.a.
Singapore Government will issue the Singapore Savings Bond every month. The application period is always 1st of the month till the 4th last business day of the month. Allocation of the bonds will be conducted on the 3rd last business day of the month and results will be published on its website after 3pm. Should the total amount of applications exceed the amount on offer in a particular month, you may not get the full amount you applied for. The excess cash will be refunded to you by the end of the 2nd last business day of the month. Savings Bonds will be issued on the 1st business day of the following month. You will be notified by CDP via mail of the amount of Savings Bonds allotted to you. You can also check your holdings online through the CDP Internet service or by calling CDP at 6535–7511. The total amount of Savings Bonds held across all issues cannot be more than $100,000.
You will receive the first interest payment 6 months after the bond is issued. Interest will be automatically paid into the bank account that is linked to your CDP account. Interest will be paid every six months after that, on the 1st business day of the month. The interest payments will be reflected in your CDP statements.
There is a $2 transaction fee for any transaction such as application and redemption of the bond.
You can redeem in multiples of $500 on the 1st business day of each month till the 4th last business days of the month without penalty. Redemption proceeds will be paid by the end of the 2nd business day of the following month. If you redeem before the scheduled interest is paid, you will receive a pro-rated amount, which is the interest you have earned but have not been paid.
NTUC Income has just launched Vivocash, a limited-premium but whole-life endowment plan that gives you cash benefit from end of 5th year till you are 100 years old!
Vivocash, is a regular savings plan that provides yearly cashflow from the end of 5th year till you are 100 years old! Not only it offers better interest rate, it provides protection against death and Total permanent Disability (Lost of sight, two legs etc.) regardless of your current health. It is 100% guarantee to be accepted with no underwriting required. You will be covered for 105% of the net premium paid for the first 5 years and 120% of all net premium paid from the sixth year onwards!
- Death and Total Permanent Disability (TPD before age 70) – 105% of net premium paid for first 5 years and terminal bonus, 120% of net premium paid from 6th year onwards plus any of the accumulated cash benefits and cash bonuses and a terminal bonus.
- Accidental Death and TPD (before age 70) – additional 100% of the sum assured, in addition to the death/TPD benefit.
- Retrenchment Benefit – 2% of the sum assured is payable if policyholder is unemployed for at least 3 months and after 6 months policy start date. This benefit can be claimed once.
This is how Vivocash works.
- You save a fixed sum of money to NTUC Income for 5,10, 15 or 20 years.
- At the end of fifth year, NTUC Income will return up to 4.25% of the Sum Assured (called cash benefit) to you till you are 100 years old. You can choose toa) Spend it.b) Save with us at current 3.5% per annum interest in deposit account issued by Income
- At any point in time, you can withdraw the money from the Deposit account.
- On the 20th and 30th policy year, you will receive additional 4% of the Sum Assured for your spending.
- If insured survives till 100 years old, the policy will pay centennial maturity benefits of 120% of all net premium paid plus terminal bonus.
Michael, age 40, is planning for his retirement. He signs up for Vivocash, paying yearly premium of $9,424 for 10 years with sum assured of $80,000. At age 45, he will receive $3,400 yearly cash benefits till 100 years old. He will receive additional $3,200 at 60 and 70 years old. He will also receive centennial maturity benefit of $139,491 if he survives till 100 years old.
Note : The above projection is based on NTUC Income achieving 4.75% investment rate of returns.
Good news to the recent local graduates! You will get $1,000 cashback if you apply for any regular premium policy with annual premium of at least $2,000 from 20 July 2015 till 31 December 2015.
You must be a Singapore Citizen and graduated from any of the Singapore’s Institute of Technical Education, Polytechnics, or Universities, from graduation year of 2012 or later.
But do note that this promotion is applicable to the first 6,600 applicable policies issued by NTUC Income. The $1,000 cheque will be mailed to the policyholder within 45 days, one year after the policy is issued and one year premium has been fully paid.
Promotion One: Higher Non-medical limit
You can now insure yourselves with higher sum assured without having to go for medical checkup. The higher non-medical limit for the two age groups are as follows:-
|Age Last Birthdate
||Sum Assured for Current Non-medical limit
||Temporary Sum Assured for Non-medical limit till 30 September 2015
|16 to 45
|46 to 50
Please note that the aggregate sum assured will be based on the current application together with those policies purchased over the last 3 years.
Promotion Two : Waiver of extra premium up to 50% on Extra Mortality
Applications will be waived up to 50% loading Extra Mortality for those substandard cases due to declared medical conditions. Apply now till 30 September 2015 in order to be eligible for this wavier.
Promotion Three : Mooncake Fiesta
For new application of any NTUC Income insurance plans from 1 July 2015 to 31 August 2015, you will receive 1 box of traditional Halal certified mooncake from Concorde Hotel that contains 4 pieces of lotus, single yoke mooncakes.
The criteria are as follows:-
|Type of plan
||Eligibility after fulfilling minimum threshold
|Regular premium with 5 years payment term
|Regular premium with 3 years payment term
|Regular premium with at least 10 years payment term
||$100,000 lump sum
Please note that the policy has to be issued by 7 September 2015 in order to be eligible for this promotion. Policies that are issued during the qualifying period but free-looked, lapsed or surrendered before 7 December 2015 will result in non-qualification and each box will be charged at $50.
NTUC Income is rewarding you with $50 CapitaMall vouchers for existing policyholder of IncomeShield/Enhanced IncomeShield; or $50 discount off the 1st year premium for new sign-up of Enhanced IncomeShield if you meet the acceptable ranges of readings from the following 4 health indicators:-
- Height and weight examination to determine your BMI
- Blood pressure reading
- Lipids profile (total cholesterol, LDL, HDL and triglycerides)
- Fasting blood glucose level test
You just need to book appointment (for 21 years old and above) with NTUC Income partners, Unity Pharmacy or Healthway Medical at a special rate of $15 (inclusive of GST). Booking of appointment at www.income.com.sg/OrangeHealth slots must be made at least 14 days prior to the health screening date.
Acceptable ranges of readings
||Height and Weight (to calculate BMI)
||• 18.5 to 24.9 kg/m2
||Diabetes Mellitus Profile
||• 3.9 – 6.0 mmol/L
||Blood Pressure Reading
||• 90 to 140 mmHg • 60 to 90 mmHg
||Total Cholesterol Triglycerides HDL-cholesterol LDL-cholesterol Total Cholesterol/HDL Ratio
||• < 5.2 mmol/L • < 2.26 mmol/L • > 1.03 mmol/L • < 3.36 mmol/L • < 4.51
NTUC Income has just launched a new short-term savings plan, LP Revosave (3 pay 10) with the feature of allowing you to withdraw cashback (5% of Sum Assured) from the end of 2nd year onwards.
This plan provides a very good alternative to savings in a bank. Not only it offers better interest rate, it provides protection against death, Total permanent Disability (Lost of sight, two legs etc.) regardless of your current health. It is 100% guarantee to be accepted. You will be covered for 105% of the premium paid-to-date throughout the term.
This is how LP Revosave (3 Pay 10) works.
1) You save a fixed sum of money to NTUC Income for 3 years.
2) At the end of second year, NTUC Income will return part of the premium back (called cashback) to you. You can choose to
a) Spend it.
b) Save with us at current 3.5% per annum interest in deposit account issued by Income
3) At any point in time, you can withdraw the money from the Deposit account.
The policy will mature in 10 years’ time.
Sample : Male age 40 years old with Sum Assured $25,000
||Yearly Cashback (From 2nd year onwards)
||Total Premium Paid
||Total Cash upon maturity (Non-withdrawal)
||Total Cash upon maturity (With yearly withdrawal)
($1250 yearly plus $27,671 upon maturity)
Comparison between SP SAIL and LP Revosave (3 Pay 10)
Single Premium Plan SP SAIL with lump sum savings of $29,820, the maturity amount is $38,577 after 10 years. So if your intention is to withdraw the maturity amount after 10 years, LP Revosave will give better returns. Moreover, you have the flexibility to withdraw 5% of the Sum Assured from the end of second year. SP SAIL does not have this flexibility.