‘Sandwich generation’ relief: EPF i-Legasi enables retirement savings transfers to family

KUALA LUMPUR, May 16 — The Employees Provident Fund’s (EPF) newly introduced i-Legasi facility could provide much-needed financial planning support for Malaysia’s ‘sandwich generation’, who often juggle the responsibilities of caring for ageing parents while raising children.

Amid rising living costs and longer life expectancy, the facility allows eligible members to transfer part of their retirement savings to immediate family members, such as spouses or children, to support long-term family financial planning.

For private-sector employee Nuraimi Syafazawana Abd Rahim, 41, who supports her parents in her hometown while raising three young children, financial pressure remains a constant challenge, particularly during family emergencies.

“It is not that we do not want to save, but there are many immediate commitments that must come first. Having a facility that helps families plan for the future together is a positive step,” she told Bernama.

Under the i-Legasi initiative, eligible EPF members aged 55 and above may transfer a portion of their savings to their spouses or children to strengthen intergenerational financial security.

According to the EPF, recipients below the age of 55 will have the funds credited into their Akaun Persaraan, while those aged between 55 and 59 will receive the transfer in their Akaun Emas.

The facility is specifically intended for immediate family members who are Malaysian citizens or permanent residents, as well as EPF members below the national minimum retirement age of 60.

Universiti Malaysia Kelantan (UMK) deputy vice-chancellor (Academic and International) Prof Datuk Dr Nik Maheran Nik Muhammad said many working adults today are simultaneously supporting ageing parents and dependent children while trying to prepare for their own retirement.

“The sandwich generation is becoming an increasingly common reality in Malaysia, especially among middle-income families. As a result, many experience financial stress, burnout and anxiety over whether they can continue supporting their families while securing their own future,” she said.

Nik Maheran said initiatives such as i-Legasi could encourage earlier discussions on retirement and family financial planning, adding that intergenerational support remains a deeply rooted aspect of Asian family values.

“In Asian society, supporting parents and children is a deeply rooted responsibility. This initiative shifts the perspective of retirement planning from an individual burden to a shared family mission,” she added.

The sandwich generation is becoming an increasingly common reality in Malaysia, especially among middle-income families as many experience financial stress, burnout and anxiety over their ability to support their families while securing their own future. — Unsplash pic

Concurring with Nik Maheran, Sunway University Professor of Economics Dr Yeah Kim Leng said i-Legasi could also encourage earlier retirement planning and foster greater financial responsibility among younger Malaysians.

While emphasising the importance of the facility’s safeguards in protecting contributors’ retirement adequacy, he noted that the scheme could also help ease recipients’ financial burdens and provide them with greater means to improve their livelihoods.

“This transfer is conditional on the EPF contributor having adequate savings to ensure personal financial security. Additionally, EPF has provided the withdrawal option in the form of monthly income streams to further enhance financial protection for retirees,” he said.

On the broader economic trend, he said Malaysia’s sandwich generation is expected to grow further due to population ageing, longer life expectancy, stagnant wages and inadequate retirement savings.

He added that the situation could become more serious as the country’s dependency ratio continues to rise over the coming decade.

“With the cost of living rising alongside urbanisation and changing lifestyles, the sandwich generation will be increasingly hard-pressed to maintain adequate savings for both emergencies and retirement, potentially leading to greater old-age financial distress or an old-age poverty crisis,” he said. — Bernama