RBC PENSION AND SAVINGS SOLUTIONS IN SINGAPORE - RBC TRUST COMPANY (SINGAPORE) PTE. LTD
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RBC Trust Company (Singapore) Pte. Ltd RBC Pension and Savings Solutions in Singapore
Pension and Savings Solutions in Singapore
Deliver benefits that are valued, cost efficient and help you attract,
recruit, motivate and retain your employees.
RBC has been active in the international retirement market Attracting, Engaging and Retaining
since 1996. We have significant knowledge and experience in
Employees in Singapore
working with multi-national clients and advisors in implementing
effective pension and savings solutions at a fair and transparent The strength of the Singapore economy provides employers
price. We have used our international experience to develop with the challenge of how to attract, retain and motivate their
workplace solutions in Singapore. workforce. RBC offers a range of workplace savings structures for
employees in Singapore (locals and expatriates), as well as for
Structuring our pension and savings solutions as trusts enables us employers with operations outside Singapore.
to provide a secure solution with the backing of a safe and stable
Canadian bank.
About RBC
RBC is Canada’s largest bank by assets We can provide you with a safe
and market capitalisation. It is among and secure Singaporean pension
the 15 largest banks globally and has a or savings solution at a fair cost.
stable credit rating.*
Further information on RBC is available
at rbc.com/investorrelations
*Source: Bloomberg, as at 31 July 2014.
RBC PENSION AND SAVINGS SOLUTIONS IN SINGAPORE 3
Differentiate Yourself From Your Competitors
Sourcing skilled employees has become increasingly competitive Pension and savings plans can be used for local, expatriate and
as the Singaporean economy has grown. Employers competing internationally mobile employees. Expatriate and internationally
for skilled employees are recognising a gap in the local market mobile employees may not be able to participate in the CPF
place between the Central Provident Fund (“CPF”) provision and and may also face the challenge of trying to arrange a portable
personal pension plans. Progressive employers are starting to use pension arrangement.
pension and savings plans to provide adequate pension provision
The CPF may not provide savings that meet an employee’s
which helps recruit and retain employees.
lifestyle expectations on retirement. Employees might consider
The costs associated with employee turnover are significant and voluntary pension and savings arrangements, but these can be
can be as high as 300% of their salary. In Singapore, average expensive with a limited choice of investments. Also, personal
employee turnover rates have been increasing over a number products can attract significant annual charges when compared
of years. According to a global study undertaken by Hay Group, with workplace savings or pension arrangements.
Singapore companies have witnessed attrition rates of 15.4 per cent
in 2009, 14.1 per cent in 2010, 14.0 per cent in 2011, 14.1 per cent in
2012 and 15.6 per cent in 2013.* Bridge the gap between the CPF and
personal pensions, and retain your
Employee:
employees, with workplace pension
“I want a pension that is simple, cost and savings plans.
effective and secures my future.”
How Can RBC Help You?
Employer: RBC can help you to implement workplace pension and savings
plans to supplement the CPF and lower staff turnover. These are
“A company sponsored workplace pension
flexible, portable and meet the requirements of both a local and
or savings plan is cost effective, simple for an internationally mobile workforce.
employees to understand and can help us,
Employers can select one or more of the following RBC pension
as a responsible employer, to secure their and workplace savings arrangements:
future.” n Section 5 Pension Plans
n Executive and International Pension Plans
n Executive and International Savings Plans.
*Preparing for Take-Off Study, conducted by Hay Group, in association with the Centre for Economics and Business Research (CEBR).
4 RBC WEALTH MANAGEMENTWe offer a suite of workplace pension We offer multi-currency contribution,
and savings plans that are flexible, investment and distribution facilities
portable and meet the requirements of and a diverse multi-currency
both a local and internationally investment fund range with a
mobile workforce. broad spectrum of risk.
Employer Benefits Employee Benefits
n Forms part of a competitive benefits package n Convenience of saving through a corporate plan: simple opt-
in election with payroll deduction if the employee contributes
n Can be used as a tool to attract, retain and motivate
employees n Access to a diverse multi-currency fund range of investment
choices with a broad spectrum of risk
n Plans with a matching contribution design allow employer
and employee to share the burden of building a secure n Helps secure the financial future of employees into retirement
financial future and through significant life events
n Can be used to provide unified and consistent pension n Cost effective savings
benefits to internationally mobile employees, to support a n International Pension Plans avoid fragmented
global reward strategy pension provision.
n Flexible plan design to match the objectives of the company
n Multi-currency contribution, investment and distribution
available
n Reduced operational costs for a single plan compared to many
local plans
n Employer demonstrates a responsible approach in helping to
safeguard the future of its employees.
RBC PENSION AND SAVINGS SOLUTIONS IN SINGAPORE 5Singapore: RBC Workplace Savings and Pensions
RBC offers a number of trust-based savings and pension solutions
Singapore Section 5 Pension Plans International Pension Plans Executive and International Savings Plans
Target population
Employees with earnings above the CPF maximum
contribution levels or those who cannot participate in Expatriate employees and senior executives All employees, or selection of employee population
the CPF
Plan operation
Defined contribution Defined contribution Defined contribution
Employee and employer contributions permitted, as well Employee and employer contributions permitted, as well
Employer contributions only
as matching contributions as matching contributions
May be a Singapore resident trust or a trust resident
Singapore resident trust Trust resident outside Singapore
outside Singapore
All employees must be eligible to participate and
Can be offered to all employees or a target population Can be offered to all employees or a target population
benefit from the same contribution rate
Contribution rate can be aligned to CPF to provide
Can be used to equalise CPF contributions for expatriate Can be used to equalise CPF contributions for expatriate
pension provision only for those employees who cannot
employees employees
participate in CPF
Distributions at retirement or upon ceasing service,
Distribution at retirement or early retirement Distribution upon leaving service
dependent on the rules of the plan
Annual reporting to Inland Revenue Authority of
– Ability to transfer to personal savings vehicle
Singapore (IRAS) with actuarial report
Taxation1
IRAS approval required IRAS approval not required IRAS approval not required
Usually, corporation tax deduction is available on
Usually, corporation tax deduction is available on Corporation tax deduction is typically not available in
employer contributions, provided the plan is a bona fide
employer contributions respect of employer contributions
retirement plan set up under a foreign trust
Employee suffers income tax charge on employer
No employee benefit in kind/income tax charge on Employee suffers income tax charge on employer
contributions, but can be mitigated by a salary sacrifice
employer contributions contributions
arrangement
Employee contributions are made post tax and are not Employee contributions are made post tax and are not
No employee contributions permitted
tax deductible tax deductible
Assets grow tax free in the plan provided the trust is not
Assets grow tax free in the plan Assets grow tax free in the plan
resident in Singapore
Distribution from plan: taxable benefit in the hands
Distribution from plan:
of employee on distribution, but can be mitigated by Distribution from plan:
typically distribution is treated as foreign income and
purchasing an annuity or spreading distribution over distributions are net of tax
therefore not taxed in Singapore
five years
Investment options
Wide investment range tailored to meet the executives’
Multi-currency actively and passively managed funds Multi-currency actively and passively managed funds
needs. Multi-currency actively and passively managed
covering a wide risk spectrum, cash or other lower risk covering a wide risk spectrum, cash or other lower risk
funds covering a wide risk spectrum, cash or other lower
investments investments
risk investments
1
The table sets out our understanding of the tax treatment in Singapore of the plans described and is generic in nature. It should not be relied upon. The tax treatment of a
particular plan, employer or employee is dependent on the specific facts and circumstances of each case and may be different from those set out above. RBC does not provide tax
and/or legal advice.
6 RBC WEALTH MANAGEMENTCase Studies
Section 5 Pension Plans Executive and International Pension Plans
The Client: The Client:
n A Singapore company with 500 employees, split between n A medium sized Singapore company with offices worldwide.
Singaporeans and expatriates.
The Issues:
The Issues: n Senior executives were being lost to competitors
n High staff turnover at all levels n Company wanted to expand into new countries and needed to
n Outdated benefits and reward package encourage and reward mobility amongst senior executives.
n Other than cash, there was nothing to help employees save
The Solution:
and individual personal savings plans were expensive
n The company implemented an International Pension Plan for
n Expatriates in particular expected a savings and / or
all of their senior executives to ensure it was portable
pension provision.
n The employer contribution to the plan varied according to the
The Solution: executives’ length of service
n The employer implemented a Section 5 Plan for all employees n Employees were also allowed to make voluntary contributions
n Vesting conditions were imposed on employer contributions: to the plan.
50% vested after one full year’s service and the remainder
vested after the second full year of service. The employer
contribution rate was set at 15%.
The Result:
The Result: The employer found that their senior executives stayed with
As part of a combination of changes to reward packages, the company for longer. The new plan was a more efficient
the company started to see their employee turnover figure solution than having local pension plans for each country.
decreasing. Employees valued the investment alternatives, International employees valued the diverse multi-currency
cost savings and convenience compared to setting up a investment range, as most did not intend to retire in their
personal arrangement. then country of residence.
Executive and International Savings Plans n Employees were permitted to contribute additional voluntary
contributions up to 30% of salary
The Client:
n A vesting condition was imposed on the employer
n A large Singapore listed company with offices in other South
contribution: if the employee leaves within the first three
East Asian countries.
years of employment the employee forfeits the employer
The Issues: contributions and any investment growth or loss
n A wide range of investment options were provided: an
n The company had high employee turnover and was looking to
expand further within Asia international selection of funds, a number of Asia regional
funds and country specific funds.
n The company offered a basic benefits package: salary,
mandatory contributions to the host country’s provident fund,
The Result:
annual bonus, medical insurance and holiday entitlement
The company’s employee turnover rate dropped and when
n Employees did not value their benefits package and felt that
they expanded further into South East Asia, they were able to
their employer should be doing more.
attract high quality employees. Participation rate in the plan
The Solution: is high and employees are using the plan to save not only for
n The company decided to implement an international savings their retirement but for other life events.
plan where the employer matched the first 5% of employee
contributions
RBC PENSION AND SAVINGS SOLUTIONS IN SINGAPORE 7How RBC Can Help You
RBC offers a full trustee, administration, investment and record Implementation
keeping service, either as a grouped or bundled solution or as an
RBC has a robust implementation methodology that includes
unbundled solution. RBC Trust Company (Singapore) Pte. Ltd.
appointing a dedicated project manager and holding frequent
is the trustee and it is subject to the supervision of the Monetary
conference calls with the client to ensure a timely and efficient
Authority of Singapore.
implementation.
Strength, Stability and Security Multi-currency Capability
In addition to the trustee and the administrator being part of one
We accept contributions, make investments and pay distributions
of the largest global banks, all assets held within our pension or
in a wholly multi-currency environment. As part of our standard
savings plans are held in a trust structure. This means that the
service, we can accept and pay away in HKD, SGD, JPY, EUR, GBP
assets do not belong to, and are separate from, the sponsoring
and USD. Additional currencies are available on request.
and contributing employer as well as from RBC. The assets are
held in trust for the benefit of the participating employees and
Investment Options
their dependants. The security provided by a trust structure is
The pension and savings plan fund range is made up of a
difficult to match using any other vehicle.
menu of funds (the “Approved Fund Range”), denominated in
To ensure the confidentiality and integrity of information many different currencies. The funds are chosen using an open
transfers we have developed a secure online data “drop off” and architecture approach and the overwhelming majority of these
collection platform. funds are external to RBC.
A sample investment range is available on request.
A Flexible Solution
We have a flexible approach. We work with you and your advisors
Employee Experience – “Online 24/7,
to determine the best pension or savings plan for your company.
If your objective is to provide a tax efficient top up to the CPF, then Multi-Currency and Up-To-Date”
a Section 5 Pension Plan might be the answer. If your challenge Employees can access plan data online and with the additional
is that you have a group of employees who do not belong in their benefits of:
home or host country pension plan then an International Pension n Real time valuation
Plan may be suitable. If you would like to provide broad based n Multi-currency reporting
arrangements to help all levels of employees save for a life event, a
n Online switching
broad based savings plan may be the solution.
n Pension and savings modelling
Experience n Access to employer communication
RBC has been active in pension and savings plans for over sixteen n Risk profiling and assistance in investment selection.
years. Our team is stable and has very low turnover. Most of our In addition, employee telephone helplines and email helplines
senior people have worked in employee benefits for over ten are available.
years. Many are professionally qualified, bringing different skill
sets for the benefit of clients, including:
n lawyers
n accountants
n chartered secretaries
n trust specialists
n corporate HR/compensation professionals.
8 RBC WEALTH MANAGEMENTEmployer Experience
Employers can also access plan data online and view individual
participants’ accounts. More importantly, a single relationship
manager supported by an administration team is appointed
to your account. The relationship manager is responsible for
the overall relationship and as he or she has a small number of
clients, they work closely with you in supporting the ongoing
administration of your plan.
Employers can access plan data online and view individual
participants accounts. A standardised suite of reports is available
or we can tailor reporting to your exact requirements.
The Merlion statue in Singapore
RBC PENSION AND SAVINGS SOLUTIONS IN SINGAPORE 9RBC Offices
RBC Trust Company (Singapore) Pte. Ltd. Asia & Middle East
(the trustee) Singapore
The trustee is regulated and licenced by the Monetary Authority 77 Robinson Road, #18-00 Robinson 77, Singapore, 068896
of Singapore. t +65 6230 1517 f +65 6532 2997
Hong Kong
17/F Cheung Kong Center, 2 Queen’s Road Central, Hong Kong
t +852 2848 1388 f +852 2521 2968
Dubai
Park Place Tower, Suite 1403
Sheikh Zayed Road, PO Box 3614, Dubai, United Arab Emirates
t +971 4 331 3196 f +971 4 331 3960
More Information Europe
Jersey
19-21 Broad Street, St. Helier, Jersey, Channel Islands, JE1 8PB
t +44 1534 283000 f +44 1534 283801
Guernsey
PO Box 48, Canada Court, St. Peter Port, Guernsey
Please visit Channel Islands, GY1 3BQ
www.rbcwminternational.com/pdf/RBC-Singapore-Brochure.pdf t +44 1481 744000 f +44 1481 744001
for further information.
London
RBC Trust Company (Singapore) Pte Ltd
Riverbank House, 2 Swan Lane, London, EC4R 3BF
t +65 6230 1514
t +44 (0) 20 7653 4000 f +44 (0) 20 7329 6144
m +65 9772 3961
e craig.finden-crofts@rbc.com Edinburgh
Exchange Tower, 9th Floor, 19 Canning Street, Edinburgh,
Scotland, EH3 8EG
t +44 131 222 3600 f +44 131 222 3601
Geneva
6 Rue François-Diday, 1204, Geneva, Switzerland
t +41 22 819 4242 f +41 22 819 4343
Royal Bank of Canada (“RBC”) is represented in Singapore by various RBC companies that form part of the RBC Wealth Management network. Trust and
fiduciary services are provided in Singapore by RBC Trust Company (Singapore) Pte. Ltd. (“RBCTCSPL”). RBCTCSPL is regulated by the Monetary Authority of
Singapore in the conduct of trust company business (licence number: TC000053-1) Registered Office: 77 Robinson Road, #18-00 Robinson 77, Singapore,
068896. Registered Company Number: 198702460K
A full list of RBC subsidiaries in Singapore and their regulatory status is available upon request from RBCTCSPL.The Company’s Private Client Terms and
Conditions are updated from time to time and can be found at http://www.rbcwminternational.com/terms-and-conditions-Singapore.html
® / TM Trademark(s) of Royal Bank of Canada. Used under licence.
10 RBC WEALTH MANAGEMENTADV/13/79 107593 4600 (01/15)
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