The Singapore pension system

With a great standard of living, low taxes, and an excellent healthcare system, Singapore is an attractive destination for pensioners and retirees. But if you’re thinking of retiring there, you’ll first need to consider how you’ll fund your income.

While the country has a subjectively great pension system in place for citizens and permanent residents, expats aren’t eligible for the national mandatory plan. Luckily, there’s a second pension plan just for foreigners.

Here’s what you need to know about the pension system in Singapore:

• The Singapore pension system

• Pensions advice and support in Singapore

• Who is eligible for pensions in Singapore?Pension age in Singapore

• Pension age in Singapore

• How the Central Provident Fund worksCPF retirement accountEarly CPF pension withdrawalsBonus incentives for homeowners

• CPF retirement account

• Early CPF pension withdrawals

• Bonus incentives for homeowners

• Pensions in Singapore for expatsSupplementary Retirement SchemeEarly SRS pension withdrawalsTransferring your pension to Singapore

• Supplementary Retirement Scheme

• Early SRS pension withdrawals

• Transferring your pension to Singapore

• Pensions for low earners in Singapore

• Other pensions in SingaporeSavings and Employee Retirement PlanSurvivor’s pension

• Savings and Employee Retirement Plan

• Survivor’s pension

• Applying for your Singaporean pensionCPF pensionSRS plan

• CPF pension

• SRS plan

• Useful resources

The Singapore pension system

Singapore’s pension system has two primary sources of retirement income, the compulsory Central Provident Fund (CPF) and the voluntary Supplementary Retirement Scheme (SRS).

Retire in Singapore: what you need to know

The CPF is managed by the Ministry of Manpower (MOM) and is the main pillar of the country’s pension system. It’s only available to Singaporean citizens and permanent residents and gets funded by mandatory contributions from employers and employees. In 2023, four-and-a-half million people were registered with the CPF, and cumulative balances totaled S$560 billion.

Unlike the CPF, the SRS is a voluntary scheme that is available to foreigners working in Singapore, regardless of their residency status. The Ministry of Finance oversees the SRS, and three banks in the private sector administer the accounts. At the end of 2022, around 390,000 people had an SRS account, totaling a combined S$16.3 billion.

Due to the wide-ranging coverage provided by the CPF, occupational pensions in Singapore are very uncommon, with only a couple of industry-wide plans available. For example, the Government Pension Scheme for civil servants has largely been wound down. However, the Savings and Employee Retirement Plan for people in the armed forces is still in operation.

Pensions advice and support in Singapore

If you’re unsure how Singapore’s retirement rules apply to you, it’s important to seek professional financial advice.

Expatica Singapore Directory

Financial advisors in Singapore

You can find English-speaking financial advisors in the Expatica Directory or on the website of the  Monetary Authority of Singapore. Top financial planners that cater to expats include:

• IPP Financial Advisors

• Singapore Expat Advisory

• Valliant Wealth

Who is eligible for pensions in Singapore?

Pension age in Singapore

Singapore’s standard retirement age is 63, which will rise to 65 by 2030. By law, employers must offer eligible employees who turn 63 re-employment so they can continue working. They must do so up to the age of 68 (or 70 by 2030). In other words, it’s not mandatory to retire at 63; you can continue working at the same company up to the age of 68.

CPF pension payouts are available from the age of 65. They’ll begin when the policyholder informs the CPF that they’ve retired. If you continue working, pension payments will start automatically at 70.

How the Central Provident Fund works

Anyone working in Singapore must pay into the CPF plan. Contributions are split between the employer and the employee. Standard contribution rates are:

Age

Employee contribution

Employer contribution

55 or below

20%

17%

55-60

16%

15%

60-65

10.5%

11.5%

65-70

7.5%

9%

70 or above

5%

7.5%

Workers with a monthly income of less than S$750 can benefit from reduced rates.

The employers will withhold your share from your pay and make the required contributions via the CPF EZPay system. The total is then split between three accounts, depending on your age:

• Ordinary Account (OA), OA savings can be used to fund house purchases, educational courses, investments, and insurance

• Special account (SA), SA savings are used to fund income in retirement

• MediSave account (MA), MA savings are used to cover medical costs and health insurance

You can also choose to make a voluntary top-up so you’ll have more to retire on later.

When the policyholder turns 55, the money on their OA and SA accounts is transferred into a new account, the retirement account (RA). Depending on how much you’ve saved at 65, you will either enroll in the CPF Lifelong Income for the Elderly (CPF Life) plan or the Retirement Sum Scheme (RSS).

CPF retirement account

Policyholders who have saved S$60,000 or more are automatically enrolled in the CPF Life scheme. This provides a guaranteed monthly income for the rest of your life and is passed on to your next of kin in the event of your death.

The amount you get in your bank account varies depending on your savings and payout method. CPF Life members can choose between:

• Steady payouts, where you receive the same amount each month

• Growing payouts, which increase by 2% per year

• Progressively lower payouts, which drop when your CPF balance falls below S$60,000

If you don’t have CPF Life (e.g., you opted out voluntarily), you’ll receive an income based on the RSS pension plan. This provides a monthly payout up to the age of 90, or until your savings run out.

There are three so-called retirement sums in operation in Singapore:

• Basic retirement sum (BRS), the lowest level of pension income, calculated on the average spending of a lower-middle income retiree household

• Full retirement sum (FRS), twice the BSR

• Enhanced retirement sum (ERS), three times the BSR

At 55, employees are informed how much they need in their retirement account at age 65 to qualify for which retirement sum. This gives them 10 years to top up their account if necessary.

For example, people turning 55 in 2024 require:

• S$102,900 to get BRS at age 65

• S$205,800 to receive FRS at age 65

• S$308,700 to receive ERS at age 65

Early CPF pension withdrawals

If you have emergency expenses after the age of 55, you can withdraw up to S$5,000 from your retirement savings. After age 65, you can withdraw a further 20% of your retirement account savings, minus the S$5,000 if you’ve taken that.

Likewise, you can withdraw extra money from your retirement fund if you have a severe medical condition or reduced life expectancy. For more information, visit the CPF website.

Bonus incentives for homeowners

Homeowners in Singapore can boost their CPF monthly payouts and receive a cash bonus of up to $30,000 with the Silver Housing Bonus and Lease Buyback Scheme.

Conditions include:

• At least one owner must be a Singapore citizen

• Gross monthly household income cannot exceed S$14,000

• You don’t owe a second property

More information about the bonus incentive programs is on the CPF website.

Pensions in Singapore for expats

Expats working in Singapore don’t qualify for the CPF scheme unless they have permanent residency. Instead, they can join the SRS pension plan.

Supplementary Retirement Scheme

The SRS is a voluntary retirement savings fund and is the primary pension plan for expats in Singapore. As foreigners can’t contribute to the CPF, they’re allowed higher contribution levels than Singaporean citizens and permanent residents:

• Citizens and permanent residents can contribute a maximum of S$15,300 to an SRS account each year (15% of a maximum income of S$102,000)

• Foreigners can contribute up to S$35,700 per year (35% of a maximum income of S$102,000)

One of the main attractions of the SRS is its tax benefits. Contributing a chunk of your income reduces your taxable earnings, meaning you’ll pay less income tax. DBS Bank calculates that a permanent resident contributing the maximum of S$15,300 per year can save around S$1,000 in taxes.

Your employer can also contribute to your SRS account, but this will count towards your contribution cap. SRS balances only earn minimal interest (0.05%), but policyholders can choose to invest their savings, for example, in bonds, securities, shares, and unit trusts.

Early SRS pension withdrawals

The money in your SRS account isn’t automatically turned into a monthly pension unless you choose to do so yourself. Before doing this, take independent financial advice, as you may lose some tax benefits.

You can withdraw your savings penalty-free at any time from your statutory retirement age (i.e., the retirement age in the year you opened your SRS account). Withdrawals made from this point are subject to 50% tax relief. You can withdraw a lump sum or spread it across 10 years. Spreading the withdrawal may reduce the amount of tax you’ll pay.

If you wish to withdraw money before your statutory retirement age, you must pay tax on the full amount you take out and pay an additional 5% penalty. In some exceptional circumstances (e.g., a severe illness or reduced life expectancy), you can still benefit from the 50% tax relief and make penalty-free withdrawals.

Transferring your pension to Singapore

If you receive a pension elsewhere, you may be able to transfer your retirement savings to Singapore. This depends on whether there is a cross-country pension agreement in place.

For example, the United Kingdom does not have a cooperation agreement with Singapore. As such, moving your pension funds may incur an overseas transfer charge.

You should take expert financial advice before moving your savings.

Pensions for low earners in Singapore

The CPF provides a non-contributory pension income through the Silver Support Scheme for retired Singaporean citizens who had low incomes during their careers. Benefits range from S$180 to S$900 per quarter. You may be eligible if you:

• Have S$140,000 or less in your CPF accounts at the age of 55

• Were self-employed between the ages of 45-54 and had an annual income averaging S$27,600 or less

Also, you must live in a Housing Development Board (HDB) flat with five or fewer rooms and have a household income of S$1,800 per person or less. See the CPF website for details.

If you are over 30 and currently earn a low income, you can also get CPF benefits through the Workfare Income Supplement (WIS) plan. About 60% of WIS payments are provided in the form of increased CPF contributions, and 40% are provided as cash.

Other pensions in Singapore

Savings and Employee Retirement Plan

Savings and Employee Retirement Plan (SAVER) is an occupational pension plan for armed forces personnel. It involves the Singaporean Ministry of Defence (MINDEF) contributing up to 17% of the officer’s salary into a savings account.

Survivor’s pension

When a CPF member dies, any savings left in their accounts will be distributed to their nominated heir. If the deceased didn’t select an inheritor, the money will be passed on to the Public Trustee Office.

If the deceased had an SRS account, the balance will be considered part of their assets and will be distributed in line with their will or (in the absence of a will) Singaporean succession law.

Applying for your Singaporean pension

CPF pension

People working in Singapore are provided with a CPF Submission Number (CSN). This includes your Unique Entity Number (UEN) and CPF Payment Code. The CPF uses this to identify payments made by your employer. When you turn 55, you will receive information from the CPF about the next steps.

SRS plan

Anyone over 18 can apply for an SRS account if they meet certain requirements. For example, you must earn your income in Singapore, not have an undischarged bankruptcy, and be mentally capable of managing your affairs. You can only open one SRS account at a time and will face a penalty if you exceed this.

You can apply for an account directly with one of three banks that manage the SRS plan in Singapore:

• DBS

• OCBC

• UOB

You’ll need proof of identity and a completed foreigner’s declaration form. If you want to change banks at a later stage, you can do so with a Request for Account Transfer form.

Useful resources

• Central Provident Fund, official website of the national mandatory pension plan for citizens and permanent residents in Singapore

• Supplementary Retirement Scheme, information from the Ministry of Finance on voluntary pension plan

Singapore finance at ExpatsList.org.