As pension reserves have swelled to 558 trillion won, financial authorities have strongly urged pension subscribers to adhere to three key management principles: "long-term, diversified, and consistent." With 47% of all subscribers managing their funds through principal-and-interest-guaranteed products and frequent short-term trading in ETFs (exchange-traded funds), the authorities emphasized that the core function of pensions—securing retirement—must be properly fulfilled through long-term and diversified investment.
Lee Chan-jin, Governor of the Financial Supervisory Service, launched the "First Long-Lasting Pension Campaign" on the afternoon of the 3rd at the Seoul Yeouido FKI Tower. He stated, "We cannot control the waves of the market, but we can choose which boat to use to cross them. The three principles—long-term, diversified, and consistent—are the boat that will protect your retirement"—emphasizing the importance of long-term and diversified investment in pensions.
According to the Financial Supervisory Service, pension reserves reached 558.3 trillion won as of the end of the first half of this year, growing at an annual average rate of 14.3%. In particular, driven by a booming stock market among other factors, subscribers converting to DC (defined contribution) plans from January to July this year increased by 118.1% compared to the same period last year. The share of performance-linked products in total reserves rose from 12.8% at the end of 2023 to 35.5% at the end of the first half of this year, while the scale of ETF investments expanded to 99.8 trillion won, an 11-fold increase from the end of 2023.
Although performance-linked products have increased, centered on ETFs, the proportion of subscribers managing their entire reserves in principal-and-interest-guaranteed products remains high at 46.9%. Subscribers investing more than half of their reserves in risky assets accounted for 33.9%. Director Lee noted, "It is important to diversify investments from a long-term perspective regarding pensions, but looking at reality, we see patterns far removed from long-term and diversified investment, such as excessive short-term trading and concentration in specific asset classes." He added, "Analysis suggests that excessively frequent trading increases transaction costs and can actually lower investment returns."
The Financial Supervisory Service planned this campaign to help subscribers ease the difficulties of pension management and practice asset allocation investment from a long-term perspective. Director Lee said, "Even when people take an interest, they often feel at a loss as to what to do first and how. I myself had an experience of struggling for about 40 minutes while directly selecting and setting up my default option." He revealed, "The campaign will be pursued in four directions—learning, opening, nurturing, and continuing—to enable anyone to easily start managing their pension."
A key feature of this campaign is its linkage between education and practice. The Financial Supervisory Service has named the initiative 'LONG' and is conducting it according to four directions: L (Learn), O (Open), N (Nurture), and G (Grow). Specifically, the agency will promote △utilizing a life-cycle-based pension guidebook for education, △checking reserves through an annual "Pension Filling Week" in November and December, △publishing an investment white paper including returns during an annual "Pension Nurturing Week" in May and June, and △expanding campaign participation through a practical working group of participating institutions.
The Financial Supervisory Service has also published a pension guidebook in collaboration with financial industry associations across sectors and pension operators. It comprehensively guides users on information needed at each life stage, from self-diagnosis of retirement preparation status to system selection, reserve management, and pension receipt. The guidebook is structured so that subscribers can follow along independently, including investment principles and asset allocation case studies. The Financial Supervisory Service plans to post the guidebook on the websites of relevant agencies to improve accessibility for subscribers.
The Financial Supervisory Service will also revamp its Integrated Pension Portal. To enable subscribers to make rational investment decisions, it will strengthen pension product comparison and search functions, including establishing a new return ranking by TDF (target date fund) vintage. Next year, it will transition to a comparative disclosure system based on heat maps (visualizing operator performance by color), improving the platform into a comprehensive information hub.
Director Lee emphasized again, "Neil Armstrong's first step onto the moon was a small step for one person, but a giant leap for all mankind." He stated, "Opening your pension account once and checking how and where it is being managed—this small step is the beginning of a meaningful change that will transform the retirement security of the nation."
The launch ceremony on the day was attended by approximately 150 people, including representatives from the Federation of Korean Trade Unions and the Democratic Labor Congress, academic experts, chairs of the four major financial associations, heads of banks, securities firms, and insurance companies, and National Assembly Political Affairs Committee members Park Hong-bae and Kim Jae-seop. Attendees signed an MOU (memorandum of understanding) and agreed to cooperate in establishing a culture of long-term investment.
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