The Supplementary Retirement Scheme, or SRS, is “part of the Singapore government’s multi-pronged strategy to address the financial needs of a greying population by helping Singaporeans to save more for their old age”.1 It is similar to the Central Provident Fund (CPF) in that it is a retirement savings scheme, but the SRS is voluntary and there is some flexibility to it as compared to the CPF.
You could open a SRS account with any of the three local banks; DBS, OCBC and UOB, but you can only have one SRS account at any one time.
The SRS has some tax benefits, one of which is that contributions are eligible for tax reliefs. To qualify for the tax relief for your next year’s tax returns (in this case, for 2017), you would need to contribute funds to the SRS account by 31 December 2016.2 Therefore in a way this post is apt as a reminder at this time of the year as you have slightly more than one month in deciding whether to partake in this scheme.
The Bedokian Portfolio, including rules on asset class diversification and rebalancing, can be applied using your SRS funds, similar to a Bedokian Portfolio built with your disposable income.
If you have an existing Bedokian Portfolio funded from your disposable income and you wish to apply the portfolio using the SRS, you have a choice of either combining the two into one Bedokian Portfolio, or maintain two separate Bedokian Portfolios, though the latter would be more tedious administratively. Another way would be to adopt the core-satellite strategy3 whereby the SRS can be used on core financial instruments and the satellite ones are maintained by your own funds.
1- Ministry of Finance, Singapore. Supplementary Retirement Scheme (SRS).
http://www.mof.gov.sg/MOF-For/Individuals/Supplementary-Retirement-Scheme-SRS (accessed 21 Nov 2016)
2 - Inland Revenue Authority of Singapore. SRS Contributions. https://www.iras.gov.sg/irashome/Individuals/Locals/Working-Out-Your-Taxes/Special-tax-schemes/Supplementary-Retirement-Scheme--SRS-/SRS-contributions/ (accessed 21 Nov 2016)
3 - The Bedokian Portfolio, p122-123