CMFAS M9 Annuities & Other Products question: Supplementary Retirement Scheme (SRS) monies

CMFAS M9Annuities & Other Products

For a life annuity purchased with Supplementary Retirement Scheme (SRS) monies, how are the annuity payments treated for tax once payouts begin?

A They are fully exempt from income tax for life like ordinary annuity payouts
B 50% of the annuity payments are subject to tax each year, and the 10-year withdrawal period does not apply
C 100% of the annuity payments are taxable, and withdrawals must be completed within 10 years
D They are taxed only in the year the SRS account is first opened

Show the answer and explanation

Answer: B. 50% of the annuity payments are subject to tax each year, and the 10-year withdrawal period does not apply

For life annuities bought with SRS funds, the usual 10-year SRS withdrawal period does not apply; as long as the participant keeps receiving the annuity for life, 50% of each year's annuity payments is subject to tax.

Common mistake

Ordinary annuity payouts are generally tax-free, but annuities from SRS are an exception: 50% of payouts is taxable, and life annuities escape the 10-year withdrawal window.

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Study note: Annuities & Other Products CMFAS M9practice questions & mock exams

Answer: B. 50% of the annuity payments are subject to tax each year, and the 10-year withdrawal period does not apply

Common mistake

Ordinary annuity payouts are generally tax-free, but annuities from SRS are an exception: 50% of payouts is taxable, and life annuities escape the 10-year withdrawal window.

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Original study material mapped to the public CMFAS M9 syllabus. Unofficial, not endorsed by MAS or SCI. Verify figures and rules against current guidance before relying on them.

CMFAS M9 Annuities & Other Products question: Supplementary Retirement Scheme (SRS) monies

Answer: B. 50% of the annuity payments are subject to tax each year, and the 10-year withdrawal period does not apply

Common mistake

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CMFAS M9 Annuities & Other Products question: Supplementary Retirement Scheme (SRS) monies

Answer: B. 50% of the annuity payments are subject to tax each year, and the 10-year withdrawal period does not apply

Common mistake

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