Retirement Pension ETF Investment Nears 100 Trillion Won
Retirement pension investment in exchange-traded funds (ETFs) has approached 100 trillion won. On Wednesday, the Financial Supervisory Service (FSS) held the launch ceremony for the '1st Retirement Pension Long-Lasting Campaign' with financial industry groups and retirement pension providers at the FKI Tower in Yeouido, Seoul, as part of its drive to promote a culture of long-term, diversified investing.
The retirement pension market itself is growing rapidly. As of the end of June this year, retirement pension reserves stood at 558.3 trillion won, continuing an upward trend from 382.4 trillion won at the end of 2023 and 431.7 trillion won at the end of last year. Demand for self-directed management by subscribers has also expanded. From January to July this year, 340,156 subscribers switched to defined contribution (DC) plans, up 118.1% from 155,947 in the same period last year. However, fund flows are splitting in two directions. As of the end of last year, based on DC accounts, 46.9% of subscribers kept their entire reserves in principal-guaranteed products, while 33.9% allocated more than half to risky assets.
The campaign operates under the 'L.O.N.G.' approach, an acronym for Learn, Open, Nurture, and Grow. Its core aim is to help subscribers manage their reserves with a long-term perspective. The campaign runs on an annual calendar. During the annual 'Pension Fill Week' in November and December, subscribers will be guided to check their reserves, annual contributions, and tax deduction limits on the integrated pension portal and review additional contributions. Efforts to locate unclaimed retirement pensions will also continue. During 'Pension Care Week' in May and June, a retirement pension investment guidebook will be published, along with checks on default option designations and holdings, and a self-diagnostic checklist based on age-specific management benchmarks.
The FSS will publish a new retirement pension guidebook containing life-stage information, from retirement readiness checks and choosing among DB, DC, and IRP schemes to reserve management and pension payout. The guidebook will also cover how to use default options, target-date funds (TDFs), and ETFs, as well as age-based portfolios and rebalancing methods. The integrated pension portal will introduce return rankings by TDF vintage within this year, and in 2027 it will adopt a heatmap format comparing returns and fees by color, along with pension statistics visualization features.
FSS Governor Lee Chan-jin said, "Retirement pensions are the people's retirement assets, and managing them steadily with a long-term perspective is more important than anything." He also emphasized that retirement pension providers should strengthen subscriber-focused support, from product selection to pension payout, at a level accessible to ordinary subscribers.
