Mirae Asset's retirement pension drawing attention
A model poses with a sign indicating that Mirae Asset Securities' reitrement pension products come with tax benefits. / Courtesy of Mirae Asset Securities
By Choi Kyong-ae
Mirae Asset Securities is betting on retirement pension products as Korea is rapidly becoming an aging society.
Under revised tax laws, increased tax benefits for individual and retirement pension products are expected to lure customers to buy these commodities.
Individual and retirement pension products worth up to 7 million won ($6,900) could get a 13 percent tax cut from next year, the securities company said.
A customer who signed 7 million won worth of pension products could receive up to 924,000 won in tax refunds after a year-end tax adjustment, the company explained in the statement.
Mirae Asset has run the “Retirement Pension Model Portfolio Wrap Account” since August 2010 for those who retired and live on monthly retirement pensions. The Wrap Account products have become more popular due to growing uncertainty after retirement amid record-low interest rates.
Record-low interest rates have made pensioners more nervous due to declining interest income from their bank deposits. The central bank cut its benchmark interest rate this month in 15 months to boost the economy.
Mirae Asset’s MP Wrap Account makes an investment in domestic blue-chip companies as well as overseas firms such as Google and Starbucks through foreign funds, said the statement.
Customers who bought the defined benefit (DB)-type retirement pension plan or the defined contribution (DC)-type plan will find it difficult to select the right products and manage them without any major financial damages, it said.
Depending on their appetite for investment, customers can increase the portion of stocks or bonds. For those who do not want to be risky, they can choose products that guarantee the principal and interest.
Mirae Asset’s MP Wrap Account product has drawn more than 10,000 customers as of August 2014. The value of the products sold went over 260 billion won (256 million).