MOF says SRS withdrawal process ‘can be improved'; to work with banks
[SINGAPORE] The government will work with Supplementary Retirement Scheme (SRS) bank operators to improve the process of withdrawing funds from their account.
The response comes shortly after The Straits Times published a forum letter on Monday (Jun 16) by an account holder, Francis Yeoh, who described the current process as inconvenient, as it requires an individual to be physically present at a bank.
The SRS is a voluntary scheme that was created to complement the Central Provident Fund (CPF) to help Singaporeans save more for their retirement by allowing them to contribute up to a maximum of S$15,300 into accounts operated by DBS, OCBC and UOB.
In late 2024, a proposed framework aimed at expanding and streamlining the SRS was shelved after the three local banks withdrew their joint application, prompting the Competition and Consumer Commission of Singapore to halt its review . The framework had sought to improve access to SRS products and boost competition among providers.
Unlike withdrawals, contributions to SRS, which are eligible for tax relief, can be processed digitally.
In his letter, Yeoh noted that the process of requiring individuals to be physically present at a bank to withdraw funds from their SRS accounts was time-consuming, and described the process as 'surprisingly outdated and frustrating' – particularly given that CPF withdrawals can already be done online.
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He added that this seems 'misaligned with Singapore's push for digitalisation'.
'As our population ages, more retirees will seek access to their SRS funds,' said Yeoh. 'Requiring them to queue for hours to manage their retirement savings is inefficient, inconvenient and, frankly, unnecessary.'
He added that he hopes the banks and the authorities can review this process.
In response to Yeoh's letter, the Ministry of Finance's director of communications and engagement, Farah Abdul Rahim, acknowledged on Friday that the current withdrawal process 'can be improved for greater convenience'.
However, she explained that the current process of requiring account holders to be physically present at a bank when making a withdrawal is to allow SRS operators to give customised advice based on the individual's circumstances.
'This helps ensure that members are aware of their eligibility for tax concessions and/or penalties, if any, relating to the nature of their intended transaction.'
The Business Times has sought comment from the Association of Banks in Singapore, of which the three local banks are members.
Christopher Tan, group chief executive officer of independent wealth adviser and fund management firm Providend, told BT that the feedback was valid, and highlighted the need for more flexible withdrawal options.
Tan suggested that banks could offer three tiers of access to cater to different user preferences.
The first would be a fully digital option, where account holders can use the bank's mobile application or an online portal to transfer funds from their SRS account into their preferred bank account.
A second option could involve submitting a physical application form, with the funds either sent by cheque or credited directly.
For those who are less digitally inclined or prefer face-to-face service, he said visiting a bank branch should remain an option.
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