PETALING JAYA: Parents have reservations about transferring their Employees Provident Fund (EPF) savings to their children’s accounts.
The intergenerational wealth transfer scheme, announced under Budget 2025, allows EPF members to transfer part of their retirement savings to the EPF accounts of close family members.
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But many are worried about doing so as they fear what the future may hold for their old age.
However, lecturer FS Ali, 50, who has a disabled child, said that such a scheme would enable parents like him to create a trust fund for their children within EPF.
“As a couple, my wife and I always ask this question: What if both of us die at the same time? What will happen to the children? For OKU cardholders, it can be a trust fund. Some would see it as a way to preserve intergenerational wealth, mostly for them to keep money in the family.”
Chow Sang Hoe, 53, a management consultant, said he may consider the scheme, but there must be clarity first from EPF.
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“I may actually make transfers, but I would need to know the details first. The returns would be the key determinant.
“Today, the returns from EPF for risk-free investment are pretty good,” said Chow, who has two daughters aged 28 and 23.
Dr A. Yasothini, 53, a medical officer, and her daughter Nishaiyani Ramesh, 24, a strategy consultant, have differing opinions of the scheme.
“I do not agree with the intergenerational transfer of EPF savings. As parents, we are uncertain about the future and the expenses we may incur arising from things like health issues.
“As much as we love our children, we must look at our welfare first. Our children may not even take care of us in our old age. Furthermore, children should not expect to live off their parents’ earnings.
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“With such a scheme, there may even be extortion by children of parents in desperate times,” said Yasothini.
Nishaiyani, however, said she is for such a scheme as EPF has strict rules on withdrawals.
“My concern would be more about the younger generation’s behaviour, to spend more and save less. With a fund like EPF that has rules in place, this seems like a good initiative.
“Having said that, I would prefer the cash out of EPF so that I can manage it myself. But people who may not put their money into various funds and investments, transfers within EPF seem like a good way of transferring wealth without the inheritors spending or losing it,” said Nishaiyani.
Hazel Ng Kah Wai, 26, who works in operational excellence, said she doesn’t mind if her parents use the scheme.
“If my parents have the knowledge to transfer money to us, then it’s quite convenient. They can still keep the money for themselves, even with EPF-to-EPF transfers.
“It simply provides an option to use parents’ EPF funds for their children’s needs,” said Ng.
Letchmi Devi N. Rengananthan, 53, a lecturer and programme coordinator for post-basic paediatric nursing from Sri Kembangan, Selangor, said she would not transfer her savings.
“I have four children, but I would not transfer my savings to my children’s accounts. This is because there would be no security for my future once the money is transferred,” said Letchmi.
Her son, Lt Dr Janaarthanan Jivananthan, 26, who is in the army, does not agree with the idea.
“I believe that in her retirement years, my mother’s hard-earned money is hers to spend for travelling and such.
“I do not think it is wise to transfer EPF savings to the children’s accounts, as children cannot be trusted.
“Some old people who lack foresight could easily get cheated by their children.
“I am not for it, even if she willingly wants to do it. I would not want her retirement funds – not while she’s alive, no,” he said.
