Over the past 18 months, more than 5 trillion won in pension savings has moved from banks to securities firms. The amount transferred from pension savings products managed through banks and insurance companies to securities firm pension savings funds exceeded 9 trillion won. As securities firms absorb a large volume of pension funds from banks and insurers, competition among industries is expected to intensify further with the introduction of fund-type defined contribution plans.
According to data submitted by the Financial Supervisory Service to Representative Park Hong-bae of the Democratic Party of Korea, who serves on the National Assembly's Political Affairs Committee, a total of 15.8699 trillion won in pension savings was transferred from late October 2024, when the pension asset transfer system began, through the end of June this year.
Of this amount, transfers from banks to securities firms totaled 5.2225 trillion won, accounting for 33% of the total. Transfers from securities firms to banks amounted to 1.2984 trillion won, only one-fourth of the reverse direction (bank→securities). The pension asset transfer system allows participants to keep individual products such as ETFs unchanged while switching only the financial institution. Asset transfers are possible only among the same types: DB (defined benefit), DC (defined contribution), and IRP (individual retirement pension).
Over one year and eight months since the implementation of the pension asset transfer system, bank pensions experienced a net outflow, while securities firms saw an equivalent net inflow. At securities firms, inflows from asset transfers were approximately twice the outflow amount, resulting in a total net inflow of 4.1513 trillion won. Banks recorded a net outflow of 3.9714 trillion won, and insurance companies saw a net outflow of 178.9 billion won.
Especially in individual retirement pensions (IRP), the contrast between securities firms and banks was stark. While securities firms recorded a net inflow of 3.0426 trillion won, banks lost 2.7544 trillion won. In the first half of this year alone, 1.7422 trillion won flowed into securities firm IRPs, indicating significant outflows from banks and insurance companies. A financial industry official stated, "Banks have stronger basic sales capabilities compared to securities firms due to their extensive offline branches and corporate networks, but the market environment of a booming stock market was even more powerful." The official added, "With heightened preference for ETFs (exchange-traded funds), the ability to trade real-time ETFs within securities firm apps likely influenced the pension money move."
A strong wind of pension money moves toward securities firms was also observed in pension savings products. Pension savings allow individuals to receive a tax credit of up to 6 million won when they withdraw funds in pension form after making regular contributions separately from their retirement pensions over a specified period. Representative products include insurance, trust, and fund types. According to data submitted by the Financial Supervisory Service to Park Hong-bae (Rep.), the amount transferred from pension savings insurance and trust products to pension savings funds in the first quarter of this year reached 1.948 trillion won. From 2024 through the first quarter of this year, the total transfer amount was 9.2585 trillion won, with 3.3939 trillion won moved specifically into pension savings funds over the past six months.
With legislative amendments to introduce fund-type defined contribution plans likely in the second half of this year, competition among industries to attract pension customers is expected to intensify further. Not only banks and insurance companies facing significant outflows of pension funds but also securities firms are concerned about customer losses due to the emergence of large-scale trustees such as the National Pension Service (NPS).
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