Samsung Asset Management Supports Retirement Security for Small and Medium Enterprise Workers Through TDF

The yield for 2045 is 7.72%, and for 2020 it is 4.23%

[Asia Economy Reporter Kum Boryeong] Samsung Asset Management is helping secure the retirement of small and medium-sized enterprise (SME) workers through target-date funds (TDFs).

Samsung Asset Management announced on the 8th that the 'Samsung Korean-style TDF' series recorded net assets of 11.6 billion KRW as a representative product of the Workers' Welfare Corporation's retirement pension.

The retirement pension project of the Workers' Welfare Corporation aims to help workers in SMEs with fewer than 30 employees prepare retirement funds. Since November 2018, Samsung Asset Management has offered the 2045 and 2020 funds among the Samsung Korean-style TDFs. These two funds were the first to achieve net assets of 10 billion KRW among the approximately 54 billion KRW total subscription amount of performance-based products last month.

As of last month, the scale of retirement fund accumulation for SME workers managed through the Workers' Welfare Corporation is about 3 trillion KRW. Except for some individual retirement pensions (IRP), all are defined contribution (DC) plans. SME employers accumulate retirement funds, and workers directly choose and manage how to operate their retirement funds.

A Samsung Asset Management official explained, "With the ultra-low interest rate trend expected to continue for a considerable period, the outlook for retirement pension returns for DC plan subscribers who choose principal-guaranteed products such as deposits is even bleaker," adding, "This is why experts continuously emphasize the need to switch DC retirement pension management methods to performance-based products like funds."

The Samsung Korean-style TDF series pursues long-term stable performance through global diversification. It was launched in five-year increments from 2015 to 2055 according to retirement target dates. Investors simply select the fund with the number closest to their retirement date. Even without adjusting asset proportions themselves, the fund automatically adjusts the ratio of risk and safe assets according to the retirement timeline.

The Samsung Korean-style TDF 2045 and 2020 also showed high returns. The one-year performance of workers subscribed to these two funds in the Workers' Welfare Corporation retirement pension products was 7.72% for 2045 and 4.23% for 2020. This exceeds the overall average return of 2.73% for DC-type retirement pensions as of September.

Samsung Asset Management created a Workers' Welfare Corporation exclusive class with lower fees than typical pension classes. To facilitate easy subscription, they jointly developed a mobile subscription environment with the Workers' Welfare Corporation. A Samsung Asset Management official said, "We will continue stable management of the representative TDF products and maintain a collaborative relationship that continuously contributes to the growth of retirement assets for Workers' Welfare Corporation retirement pension subscribers."

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