Retirement Pension Reserves Surpass 200 Trillion Won for the First Time... Annual Yield at 2.25%

[Asia Economy Reporter Kim Bo-kyung] The scale of retirement pension reserves surpassed 200 trillion won for the first time in history last year, increasing by more than 31 trillion won compared to the previous year.

The Ministry of Employment and Labor and the Financial Supervisory Service announced the "2019 Retirement Pension Reserve Operation Status Statistics" on the 5th.

Until now, retirement pension statistics have been prepared and announced by the Financial Supervisory Service based on business reports from retirement pension providers. From the 2019 statistics onward, the Ministry of Employment and Labor has also utilized separately collected business status data from retirement pension providers in the compilation of statistics, resulting in a joint announcement.

As of the end of last year, the scale of retirement pension reserves reached 221.2 trillion won, an increase of 31.2 trillion won (16.4%) compared to the previous year, surpassing 200 trillion won for the first time since the introduction of the retirement pension system.

By system type, defined benefit (DB) accounted for 138 trillion won, defined contribution (DC) and IRP special cases (corporate IRP) accounted for 57.8 trillion won, and individual retirement pension (IRP) accounted for 25.4 trillion won.

Defined benefit increased by 16.9 trillion won (13.9%) compared to the previous year, and defined contribution and IRP special cases increased by 8.1 trillion won (16.3%).

In particular, individual retirement pensions increased by 6.2 trillion won compared to the previous year, showing a high growth rate of 32.4%.

By product type, among the total reserves of 221.2 trillion won, principal-guaranteed products accounted for 198.2 trillion won (89.6%, including standby funds), and performance-linked products accounted for 23 trillion won (10.4%).

In the case of defined benefit, the proportion of principal-guaranteed products (94.6%) was higher compared to other types (defined contribution and IRP special cases 84.3%, IRP 74.5%).

The annual rate of return was 2.25%, an increase of 1.24 percentage points compared to the previous year. The annualized rates of return over the past 5 and 10 years were 1.76% and 2.81%, respectively.

By product type, the rate of return was 1.77% for principal-guaranteed products and 6.38% for performance-linked products. By system type, defined benefit was 1.86%, defined contribution and IRP special cases were 2.83%, and individual retirement pension was 2.99%, with defined contribution and individual retirement pensions showing relatively higher returns.

Last year's total cost burden rate slightly decreased by 0.02 percentage points from the previous year to 0.45%.

By system type, the total cost burden rate decreased in all system types: defined benefit fell by 0.01 percentage points to 0.4%, defined contribution and IRP special cases fell by 0.03 and 0.04 percentage points to 0.57% and 0.42%, respectively.

This content was produced with the assistance of AI translation services.