Mirae Asset Investment and Pension Center Publishes Issue 8 of 'Investment and Pension'

[Asia Economy Reporter Hwang Yoon-joo] Mirae Asset Investment and Pension Center announced on the 21st that they have published the 8th issue of the investment magazine "Investment and Pension."

The Investment and Pension Center, in this issue's cover story "4 People, 4 Styles Targeting Preferences! Which Default Option for Retirement Pension Fits My Style Perfectly?" categorized retirement pension subscribers by investment style and presented suitable default option product selections and utilization methods.

The default option refers to a system set up so that if a retirement pension subscriber does not give separate management instructions, the retirement pension savings are automatically managed with a product pre-selected by the subscriber to prevent the funds from being left idle.

Since its introduction in July, the approval process for product eligibility by the Ministry of Employment and Labor is currently underway, and it is scheduled to be fully implemented after October. Once the system is fully implemented, retirement pension providers (financial companies) will present a list of default option products to DC-type retirement pension and IRP subscribers, who will then choose their desired product from the list.

The Center applied two criteria: 'principal guaranteed' vs. 'profit seeking' and 'active exploration' vs. 'passive management,' classifying retirement pension subscribers into four types: ▲Active Exploration Profit Seeking ▲Active Exploration Principal Guaranteed ▲Passive Management Profit Seeking ▲Passive Management Principal Guaranteed.

The first type, ‘Active Exploration Profit Seeking,’ consists of subscribers who actively explore financial products to increase returns and build and manage their own portfolios. For them, if the products they are currently investing in or wish to invest in are offered as default options, it may be helpful to directly switch to or manage those products to reduce fees.

Subscribers who actively explore financial products that protect the principal while seeking high returns, the ‘Active Exploration Principal Guaranteed’ type, are advised that since principal and interest guaranteed products have fluctuating monthly interest rates, they need to pay attention to interest rate changes when selecting and managing default options.

The ‘Passive Management Profit Seeking’ type desires high returns but lacks investment experience, capability, or time to actually invest. The Center suggests that these subscribers choose products such as Target Date Funds (TDF), which allocate assets over time, or Balanced Funds, which allocate assets according to market conditions.

Lastly, for the ‘Passive Management Principal Guaranteed’ type, who prioritize principal protection and do not pay much attention to interest rate changes or maturity management, the Center advises checking whether retirement pension savings remain as idle funds, since the introduction of the default option has completely banned automatic reinvestment upon maturity of principal and interest guaranteed products.

Additionally, the magazine provides guidance on pre-checks before subscribing to default option products, precautions when subscribing, ways to utilize the default option system, and checkpoints for post-subscription management. Besides the cover story, it also includes various investment and pension-related information such as types of ETFs related to dollar investments, reforms in the health insurance premium system, and pension-related tax reform proposals.

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