TAP, SCP and Me – Things you may not know about TAP and SCP

26th April 2017
tap and scp image of a jar with money inside

In my post last week about investing, I covered briefly about two programs in Brunei called TAP and SCP. TAP and SCP came into being as an alternative to state-funded pension schemes for public servants. They have since developed into a plan for all citizens and permanent residents. Currently, only uniformed personnel of the Royal Brunei Armed Forces and the Royal Brunei Police Force are maintained as pensionable careers in Brunei. As employees, most people know TAP and SCP deduct from your monthly pay before this pay even goes into your account. But how much do we really know about these programs and how do we maximise them to suit our needs?

Tabung Amanah Pekerja (TAP)

The Employees’ Trust Fund or locally known as TAP is a program that’s stipulated under the “Tabung Amanah Pekerja” Act Chapter 167. What most of us know about TAP is that you give 5% of your pay and your employer will match with another 5% into your account. This continues every paycheck until you are ready to reap the rewards.

So how does TAP work?

As I said, the minimum contribution for both employees and employers are at 5% each. And with those contributions, the Government will invest in assets locally and globally which excludes assets in sectors such as gambling, alcohol, weapons, pork and tobacco. They may then distribute any earnings in the form of dividends back into your TAP account.

How can I withdraw from my TAP?

So we are just putting in money month in, month out but at the end of the day the most important question is: How can I actually use it? The TAP website gives us a small insight to this, where there are multiple schemes in place:

  1. 55 years old

    • You can withdraw 100% of your TAP when you reach 55 years of age.
  2. 50 years old

    • You can withdraw 25% from your TAP after the age of 50 years. You may only do this once, meaning the next withdrawal is the rest of your balance at 55 years of age.
  3. Emigration

    • You can withdraw 100% of your TAP if you choose to permanently migrate to another country.
  4. Housing

    • You may withdraw 45% of your TAP for the purpose of financing a home including building, buying or repaying loans. The conditions require you to have:
      • 10 years of TAP membership with at least 5 years (60 months) of active contributions, or
      • a minimum TAP savings of B$40,000.
  5. Incapacitation

    • You may withdraw 100% of your TAP if you have been certified by a Medical Board as being physically or mentally incapacitated from engaging in any further employment.
    • This is the same concept as a “total and permanent disability” insurance.
  6. Next-of-Kin

    • The next-of-kin of the account holder may withdraw 100% of his or her TAP if the owner were to die before withdrawing the balance.

Supplemental Contributory Pensions (SCP)

The SCP is similar to TAP in a sense that you and your employer are both contributing to a fund. The contribution has a minimum of 3.5%. 3% goes into your SCP account and 0.5% goes into what’s called the “Survivorship Protection Fund”. The similarities end there though, the benefits of SCP are quite different compared to TAP. The SCP is spelt out in the Supplemental Contributory Pensions Order, 2009.

Benefits and withdrawing funds from SCP

SCP offers an array of financial benefits that are very interesting:

  1. Self-employment voluntary contribution

    • If you are self-employed and you voluntarily contribute B$17.50 to your SCP, the Government of Brunei will match this amount!
    • $15 will go into your SCP and $2.50 into your survivorship protection fund.
  2. Monthly Payment Benefit

    • This is the pension-like benefit. Note that this benefit only takes effect if you satisfy a specific condition:
      • you must have fulfilled the requirement of contributing 7% per month (including your employer’s contribution) continuously for a period of 35 years (420 months).
      • If you do not satisfy this criteria:
        • the SCP board may, at their discretion, pay out your SCP balance in a lump sum instead of the monthly payment benefit.
    • At the age of 60 years old, you will receive monthly payments from your SCP balance for a period of 20 years.
    • If you have satisfied the conditions but your SCP is below the minimum of $150, the Government of Brunei will top up the remaining balance to reach $150 per month!
  3. Survivorship benefit

    • This is similar to the concept of a life insurance benefit.
    • If the account holder were to die before the age of 60 years, his or her next-of-kin will gain the survivorship benefit.
    • An amount of $400 per month is paid to the widow and/or children for up to 15 years.
    • Beneficiaries are paid in a hierarchical manner considering 15 years is not reached:
      • If the widow were to remarry or die, their child under the age of 21 years old will receive the monthly payment.
      • If the child reaches 21 years of age, the benefit with pass on to the next child under 21 years and so on.
      • Finally, if no more beneficiaries are eligible, the balance is paid in lump sum and divided in accordance to:
        • Hukum Syara’ for Muslims, and
        • The last will for non-Muslims.

Can you maximise your TAP and SCP?

It is possible to maximise your TAP and SCP in a few ways.

Firstly is if your employer is willing to match a higher percentage of your pay for your TAP, for example, 7.5%, then you are better off going for this as you’re getting more in the end. But make sure you have this agreement in writing as legally, your employer is only required to pay 5%.

A second way is to voluntarily contribute to your TAP and SCP accounts. This is similar to saving up, however, you will not be able to touch this amount unless you satisfy one of the conditions above. This solution is great for people who do not have the discipline to save up for the long term. Also, people who want to save up for a house (using TAP’s Housing withdrawal scheme) can consider this plan too.

Legal binding to contribute

Both TAP and SCP are written into law; Meaning the terms and contributions there-in are mandatory for employers (at a minimum of 5% for TAP and 3.5% for SCP). If your employer does not respect their end of the responsibility to contribute, do flag it up to them. They may have forgotten or overlooked the issue. However, if you find that they have willfully short-changed you, do not hesitate to bring it up to the regulators to take action.

Do not try to cheat the system either as that will get you whacked with the law books too!

Investments using TAP and SCP funds

In 2015, a large percentage of funds from TAP and SCP were invested in Singapore’s financial industry equities. These equities include Singapore Government Bonds and a portion of the funds were also used for foreign currencies. The diversification can be interesting to look into and further research and reading can be found in the TAP financial statements.


TAP and SCP are pretty good Government initiatives to help the residents of Brunei Darussalam attain a more comfortable retirement. However, we should not rely solely on the Government. This has led to a sense of entitlement and unsustainable economic burden as we can see today. TAP and SCP should not be taken as an alternative to proper insurance to protect your dependents’ future too.

Learning to invest and planning a budget for your money is the one of the best ways for you to reach a more comfortable standard of living in retirement. I’ll leave you with this quote:

“Retirement is like a long vacation in Las Vegas. The goal is to enjoy it the fullest, but not so fully that you run out of money.”

– Jonathan Clements, Author & Scriptwriter

It is never too early to consider when you would like to stop working and how will you achieve it!

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