What is Skim Simpanan Pendidikan Nasional (SSPN)?
SSPN or the National Education Savings Scheme is a government-guaranteed savings scheme introduced by the Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN) to encourage people to save money for their children’s higher education financing purposes. Aside from being a mere savings account, SSPN also comes with competitive annual dividend returns and other attractive benefits.
Any Malaysian is eligible to have a SSPN account (known as SSPN-i). For minors below 18 years old, their parents (or legal guardian) may open an account on their behalf. With SSPN-i, parents get to enjoy extra benefits such as matching grant (for eligible families), tax relief and also free takaful protection. The child will be eligible to borrow education loan from PTPTN in the future as well.
What Happens to Your Client’s SSPN-i Account When He Passes Away?
Upon death of the depositor (the parent), the account will be closed. The appointed personal representative will then claim the takaful benefits (if any) on withdrawal of the investment. Relevant Court Order will be required if the amount is more than RM3,000. The benefits/monies will be distributed to the ‘Waris’ (the child) after that.
FAQ for SSPN-i: https://www.ptptn.gov.my/faq-simpanan-side/faq-sspn-i
However, what if the child is still a minor? Can anyone continue to operate the account on behalf of the child or to open a new account to hold on the monies for them? Most importantly, there will be no instructions given on who or how to use these monies on the child.
SOLUTION: COVER IN A WILL
Even though the word ‘Waris’ is defined as the child whom the account is opened on behalf of by the depositor, it is still advisable for your client to mention that particular child’s name and the specific SSPN-i account number in their Will. This is to secure the child’s benefits and to avoid potential confusion that may occur in the future (especially if your clients have more than one SSPN-i accounts opened for their children individually).
If your clients wish to inform the surviving parent/legal guardian to open a SSPN-i account on behalf of the child upon their death, they may also include this instruction in their Will.
ADVICE: TESTAMENTARY TRUST
If the children are still minors or your clients are worried that the monies might be misused, it is advisable for them to set up a Testamentary Trust in their Will. Instructions can be given to ensure that the monies from the SPPN-i account or from other sources to be used on that particular child’s education purposes. The amount and the manner of distribution can be customized as well!
For instance, they may allocate a different sum to be distributed at different point of time, at different levels of education (primary/secondary/tertiary), for different courses or even extra amount to be distributed if the child chooses to further his/her studies oversea etc. Clients are free to give reward for their child’s academic achievement as well.
Also, do highlight to your clients the importance of appointing a resourceful Executor/Trustee such as Rockwills Trustee Berhad to ensure that investments such as SSPN-i will be administered properly. A resourceful Executor will be ready to deal with any unique investments in the future that the estate may own.
If your clients have savings under SSPN (individual account or account opened on behalf of their children), it is advisable to reemphasize the name of the beneficiaries and the account details in their Will for better protection and security purposes. Do not forget to promote Rockwills Trust Berhad to your client as the Executor/Trustee as well!