The National Retirement Scheme (SPK), implemented yesterday, is in line with His Majesty Sultan Haji Hassanal Bolkiah Mu’izzaddin Waddaulah ibni Al-Marhum Sultan Haji Omar ‘Ali Saifuddien Sa’adul Khairi Waddien, Sultan and Yang Di-Pertuan of Brunei Darussalam’s titah, to offer a more secure retirement assurance by providing retirees with a better and higher monthly retirement income, surpassing the financial retirement benefits under the Employees Trust Fund (TAP) Scheme and Supplemental Contributory Pension (SCP) Scheme.
The scheme is also one of the efforts of the government, which is concerned about the overall welfare of the people, particularly in terms of social protection, especially during retirement.
The SPK replaces the previous schemes, TAP and SCP.
OBJECTIVES OF SPK
With the implementation of SPK, it is hoped that it can address the main challenges of retirement in the Sultanate, ensuring a sufficient retirement income for each member and at the same time, allowing more flexible withdrawals for their pre-retirement needs.
STRUCTURE OF SPK
Under SPK, contributions will be divided into member contributions and employer contributions. Member contributions from their salary will be deposited into the member account from which members can make withdrawals for their pre-retirement needs.
Employer contributions will be pooled into the retirement account for the members’ retirement.
BENEFITS OF RETIREMENT ACCOUNT
The retirement account will provide higher monthly annuity starting from the age of 60, with up to lifetime payout. The estimated SPK annuity for each member takes into account factors such as the average salary and work productivity (length of employment). This will encourage members to be more productive to improve their quality of life during retirement.
The dependents of the SPK member are also protected with derivative benefit upon death of the member any time before the age of 75 years with the retirement account. The scope of protection is extended not only to wife and children but also to husband and unmarried members’ parents.
BENEFITS OF MEMBER ACCOUNT
From the member account, members are allowed to make withdrawal applications for pre-retirement purposes. Various additional withdrawal types or enhancements have been introduced to cater to current needs/circumstances, such as paying for their own or children’s education, settling debts, or performing the obligatory haj pilgrimage. Members can make withdrawals from the member account at the ages of 45, 50, and 55 without any other requirements, up to 30 per cent of the remaining balance for each withdrawal.
Furthermore, members aged 40 and above are also allowed to withdraw up to 50 per cent of their member account for housing purposes, such as buying or building a new house, home renovations, or home loan repayment.
For members no longer employed or retire after the age of 55, with SPK, they can make 100 per cent withdrawal of their member account through the SPK 55+ withdrawal and receive monthly payments until they reach the age of 60. This is expected to serve as their income before reaching the age of 60. After reaching the age of 60, members will then start receiving their monthly annuity from the retirement account.
One hundred per cent withdrawal is also allowed for purposes other than retirement at the age of 60, such as next of kin for deceased members, incapacitation, terminal illness and renouncing of citizenship. SPK is mandatory for members who are citizens or permanent residents of Brunei and below 60 years, regardless of whether they work in the public sector, private sector, or informal sector. The mandatory contribution rate from members’ basic salary remains at 8.5 per cent, while the mandatory contribution rate from employers is updated based on their employees’ salary group.
TRANSITION TO SPK
Every TAP member will be transferred to SPK based on their age category. Members below 50 years will be automatically enrolled in SPK. As for members aged 50 to 59, known as the Silver Generation category, they will be given the choice to either opt-in to SPK immediately or defer their participation.
For SCP members who are citizens or permanent residents of Brunei and are 60 years and above, known as the Gold Generation category (those currently receiving monthly SCP payments and those who have made full SCP withdrawals), they will also be included and will receive the monthly annuity of SPK.
The Government of His Majesty also gives subsidy to ensure that members receive annuity of not less than BND250 per month, subject to eligibility requirements.
WORDS FROM MEMBERS
TAP members expressed gratitude to His Majesty regarding the launch of SPK.
TAP member Haji Mohammad Kamarul Dzaman bin Haji Ajimain expressed gratitude to TAP for taking the time to provide consultations about SPK to the public so that they can make choices that align with their retirement needs. “SPK offers a better monthly income for our retirement in the future,” he explained.
Meanwhile, SCP member Haji Samion bin Haji Ismail also expressed gratitude even though he had already withdrawn SCP at the age of 60 and he will also receive monthly benefits through SPK.
Sarirani binti Abdul Ghani, who has applied for housing withdrawal under SPK, expressed a feeling of gratitude for the opportunity to withdraw her savings for home renovations and improvements for the comfort of her family. “The SPK withdrawal age also gives me the opportunity to use my savings for various purposes such as performing umrah or paying for my children’s school fees.”
SOCIALISATION ACTIVITIES
Since May 2022, several initiatives have been undertaken to ensure that the benefits of SPK are known to the public, especially TAP members and employers, through information sharing sessions, media networks, and continuous consultation sessions which covered all districts.
As part of TAP’s initiative to ensure the quality of services provided, the public can access information about SPK, the official TAP website, www.tap.com.bn, and the online service, e-Amanah, have been upgraded to be more user-friendly and serve as the “SPK one-stop information centre”.
TAP branches will resume operations tomorrow. Due to the expected high volume of SPK withdrawal applications, temporary Tekad Pemedulian Orang Ramai (TPOR) measures will be implemented, which may take up to one month from the SPK implementation date for processing SPK withdrawals.
