Amid the weak domestic stock market, retirement pension reserves at the end of the third quarter fell 2.1% from the previous quarter to 542.1214 trillion won. This marks the first decline since the first quarter of 2020, in the early stages of the COVID-19 pandemic, a span of more than six years. Forecasts suggest that the downward trend in retirement pension reserves may continue into the final quarter of this year.
According to the Financial Supervisory Service’s Integrated Pension Portal on the 20th, reserves for performance-linked (non-principal-guaranteed) products in the third quarter decreased by 6.3% from the previous quarter to 185.2078 trillion won.
As the valuation of funds and ETFs (exchange-traded funds) declined, the investment trend that had been expanding centered on ETFs during the first half due to a booming stock market reversed. The share of performance-linked products in total retirement pensions also dropped by 1.5 percentage points, from 35.7% to 34.2%. Conversely, reserves for principal-guaranteed products increased by 0.2% to 356.9051 trillion won.
By industry sector, the securities sector, which has a high proportion of performance-linked products, recorded the largest decline. Retirement pension reserves in the securities sector fell by 2.9% from the previous quarter to 160.2935 trillion won, and its share of total retirement pensions decreased by 0.3 percentage points to 29.6%. Reserves in the banking sector declined by 2.1% to 275.4860 trillion won, while reserves in the insurance sector fell by 0.9% to 106.3419 trillion won.
In the securities industry, reserves decreased for all firms except Kiwoom Securities, which recently launched its retirement pension business. Mirae Asset Securities and Samsung Securities saw declines of 4% and 1.5%, respectively, while Korea Investment & Securities (1.9%), Hyundai Motor Securities (1%), and NH Investment & Securities (3.8%) also experienced drops in reserves.
The operator with the largest reserves was Samsung Life Insurance (57.5486 trillion won), followed by Shinhan Bank (57.2252 trillion won) and KB Kookmin Bank (52.2226 trillion won). Mirae Asset Securities maintained its top position in the securities industry with 49.9034 trillion won, ranking fifth overall.
By type, the decline in IRP (Individual Retirement Pension) was notable. IRP reserves decreased by 3% from the previous quarter to 161.3451 trillion won. DC-type (Defined Contribution) reserves fell by 2.3% to 159.4993 trillion won, and DB-type (Defined Benefit) reserves dropped by 1.3% to 221.2770 trillion won.
The decline in retirement pension reserves is expected to continue into the fourth quarter. This is because stock market weakness persists, with the KOSPI index falling even after entering October. A financial investment industry official stated, “As the stock market has shown weakness since the start of the fourth quarter and future outlooks are not positive, the scale of retirement pensions may decrease in the future.”
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