Matched Retirement Savings Scheme (MRSS)
Good news! The Government has introduced the Matched Retirement Savings Scheme (MRSS) to help senior Singaporeans who have yet to meet the Basic Retirement Sum (BRS) save more for retirement.
Here’s how it works. For 5 years from 2021 to 2025, the Government will match dollar-for-dollar, cash top-ups made to members’ Retirement Account – up to an annual cap of $600.
This can amount to $3,000 in top-ups over five years. And with dollar-for-dollar matching, this $3,000 you put into your own retirement fund or that of a loved one will double to $6,000. Great, isn’t it?
Benefits of Matched Retirement Savings Scheme: higher monthly payouts
More savings means higher monthly payouts for retirement!
There’s no better savings interest rate than what CPF pays now. Your cash top-up and the matching grant you receive from the government enjoys attractive CPF interest rates of up to 6% per annum. No kidding! No financial institutions offer interest rates that come anywhere close.
This means the $3,000 you put into your Retirement Account over 5 years will grow to $8,300 when you are 65. Like this:
Who can make the top-up?
Anyone. Yup, you heard right. Anyone can make the top-up. Eligible members themselves can make the top-up. Their loved ones or employers can do the top-up for them. You don’t even need to be a family member to top-up the RA of an eligible member. Any members of the community can do so! Hey, a chance to do something good, right?
These top-ups need not be in a lump sum. They can be small and regular top-ups (e.g. $50 each month) throughout the year. Understandably, some elderly members will need support for the top-ups.
Chief Executive Officer of CPF Board, Mr Augustin Lee said:
“We hope their loved ones and the wider community can also pitch in. Even small amounts saved consistently can go a long way in securing CPF members’ retirement needs.”
Making CPF top-ups to her parents for the first time is Mdm Katherine Ou. Katherine has been looking forward to the MRSS since it was first announced during Budget 2020. She said “My parents have little CPF savings, especially my mother who is a housewife. I want to make top-ups to their CPF accounts so that they can receive the matching grant from the Government and be better prepared for retirement.” These top-ups together with the matching grant would help her mother Mdm Susan Lye to have more monthly CPF payouts four years later when she turns 65.
Top-ups can be made electronically via the CPF website or myCPF mobile app. They can also be done through GIRO.
Enjoy up to $7,000 tax relief
Here’s another reason to do the top-up. Tax relief!
When a member makes the cash top-up to themselves, they not only receive the matching grants from the government, they also enjoy up to $7,000 tax relief. Likewise, one who top up the RA of loved ones – parents, parents-in-law, grandparents, grandparents-in-law, spouse and siblings, also enjoy up to $7,000 tax relief.
When employers make top-ups to their employees, employers can qualify for an equivalent amount of tax deduction and employees can enjoy tax relief of up to $7,000 each year.
The MRSS is for members with little CPF savings.
CPF members must be between age 55 and 70. They also have less than the prevailing Basic Retirement Sum (BRS) in their Retirement Account (RA).
For 2021 the BRS is $93,000. Other eligibility criteria include average monthly income, the annual value of residence and property ownership.
According to the CPF Board, 440,000 CPF members are eligible for the scheme in 2021.
There’s no need to apply for MRSS as eligibility is assessed automatically with government data. Eligible members will be notified by CPF Board in January. Members can also check their eligibility online via the CPF website with immediate effect.
When will I receive the matching grant?
The matching grant for a given year will be automatically credited into the eligible member’s RA at the beginning of the following year. For example, the matching grant will be given at the beginning of 2022 after we have totalled up all the cash top-ups made in 2021.