Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
Financial authorities, labor ministry vow to expand retirement pension market
Financial Supervisory Service (FSS) Governor Lee Bok-hyun, right, sits next to Minister of Employment and Labor Lee Jung-sik during a ceremony to review the outcomes of the newly implemented retirement pension system in Seoul, Thursday. Courtesy of FSS
By Anna J. Park
Korea's retirement pension reserves reach 382 tril. won as of 2023
Financial Supervisory Service (FSS) and Ministry of Employment and Labor have jointly urged retirement pension operators to provide quality services to support the public's stable retirement.
According to the FSS on Thursday, FSS Governor Lee Bok-hyun and Minister of Employment and Labor Lee Jung-sik met at a meeting at Royal Hotel in central Seoul to review the outcomes of newly implemented retirement pension systems.
At the meeting, exemplary cases were presented from four outstanding retirement pension operators selected last year — Mirae Asset Securities, Hana Bank, Korea Investment & Securities and KB Insurance — to encourage the financial companies.
"The newly implemented retirement pension systems have many tasks to improve, such as expanding retirement pension enrollment, enhancing profitability and strengthening pension security," the minister said during the meeting, calling on the firms to lead the industry by spreading the exemplary cases for the successful implementation of new systems.
Korea's retirement pension systems underwent a major overhaul through two legislative amendments made in 2021 and 2022. These improvements includes introduction of retirement pension funds for small and medium-sized enterprises with fewer than 30 employees, as well as introduction of defined-contribution (DC) and individual retirement pension (IRP) options.
In addition, the legislative changes introduced a mandatory establishment of pension fund management committees in workplaces with 300 or more employees that offer defined-benefit (DB) plans.
As a result of these series of pension reforms, the accumulated amount in retirement pension reserves reached 382 trillion won ($275 billion) by the end of last year, with an annual rate of return standing at 5.26 percent, the second-highest yield since 2010.
"The role of retirement pension operators has become even more critical, as they provide significant services that customers can trust," the FSS governor said, urging the financial institutions to maintain stable returns on retirement pension products that are higher than the inflation rate.