Starting January Next Year, Pension Transfer Possible with One Visit...Significant Reduction in Required Documents

Financial Supervisory Service Simplifies Retirement Pension Transfer Procedures
Transfer Possible with One Visit and Application to Financial Company
Standardized Application Forms and Minimized Required Documents

[Asia Economy Reporter Kangwook Cho] Starting January next year, when a company wants to transfer DB, DC, or corporate IRP (Individual Retirement Pension) to another financial institution, the procedure will be simplified so that only the new financial institution receiving the transfer needs to be visited and applied to. Also, the number of required documents will be minimized from up to 7 to 1-2.

On the 2nd, the Financial Supervisory Service announced that although the transfer between individual IRPs and between individual IRP and pension savings was standardized, inconveniences existed when companies applied for (bulk) transfers, so they simplified the retirement pension transfer procedure accordingly.

Looking at the main improvements, if a company visits the new financial institution receiving the transfer once and applies for the transfer, the subsequent tasks will be automatically processed by the standard procedure between financial institutions by the next business day (D+1)*.

If the company already holds an account at the new financial institution, it is also possible to visit and apply once at the existing financial institution from which the transfer is made.

However, if the company wants to transfer only part of the DB account balance (or split the transfer to multiple financial institutions), for the time being, application is only possible through the existing financial institution. The Financial Supervisory Service plans to improve the financial institutions' IT systems so that transfer requests through the new financial institution will be possible by the second half of next year.

The ‘transfer application form,’ which varies by financial institution, will be standardized so that all financial institutions use the same form, and the form will be disclosed.

Also, the required documents, which can be up to 7, have been drastically reduced to 1 (application form) for DB and 2 (application form, subscriber list) for DC and corporate IRP.

To allow companies to recognize any disadvantages that may occur during the transfer in advance, the existing financial institution will reconfirm the intention to transfer via phone (recording) or other means.

The reconfirmation of transfer intention must be conducted by employees who are not in charge of retirement pension sales (such as customer center staff) to prevent conflicts of interest.

Also, to allow workers to check precautions at the stage of applying for transfer, clear guidance will be provided at the top of the ‘transfer application form’ (transfer subscriber list).

The Financial Supervisory Service expects that the simplification of transfers will enhance convenience for consumers (companies and workers) and significantly increase transfers to financial institutions that consumers want to deal with through comparing yields.

In fact, due to the simplification of transfers between individual IRPs and between pension savings and individual IRPs on November 25 last year, the number of transfers between individual IRP and pension savings in the first half of this year more than doubled from 12,054 cases in the same period last year to 30,917 cases. The amount also surged from 469.4 billion KRW to 862.2 billion KRW.

The Financial Supervisory Service plans to implement the simplification in January next year after completing internal training and IT system construction at financial institutions. Also, the preparation of IT standard messages for computerized transfer operations between financial institutions will be carried out in collaboration with the Korea Securities Depository in the first half of next year.

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