[Interview] Peaceful Retirement... "Pension Investment Like a Nomad"

Sonsujin, Head of WM Pension Marketing Division at Mirae Asset Global Investments
"Must View from a Long-Term Perspective of at Least 3 to 5 Years"

Sujin Son, Head of WM Pension Marketing Division at Mirae Asset Global Investments. Photo by Mirae Asset Global Investments

[Asia Economy Reporter So-yeon Park] "Pension investment should be like nomads." Son Su-jin, Head of WM Pension Marketing Division at Mirae Asset Global Investments, recently emphasized in an interview with Asia Economy that "if pension investment is treated like an agricultural society, settling accounts in one cycle of spring, summer, fall, and winter, it can actually lead to losses," adding, "like nomads raising livestock, it should be viewed from a long-term perspective of at least 3 to 5 years."

Son said, "Looking at the past five years, there have been all kinds of situations that funds with asset allocation functions could face, such as stock markets, bond markets, the COVID-19 crash, subsequent rapid rebounds, and simultaneous crashes in stocks and bonds," and added, "even after experiencing all these various markets, the fund returns over the past five years have been much higher than deposits."

Recently, Mirae Asset Global Investments ranked overwhelmingly first in the number of default option products approved by the Ministry of Employment and Labor for retirement pensions. The total number of government-approved default option products is 259 (including ultra-low risk), of which 130 are Mirae Asset products.

The 'default option' is a system where retirement pension subscribers who do not express a separate intention are managed according to a pre-determined investment method. The types of products allowed under the default option include principal-guaranteed products, target date funds (TDF), balanced funds, short-term financial funds, and social overhead capital (SOC) funds. These are relatively stable funds with verified returns.

Son advised that when selecting principal-guaranteed products, one should carefully check interest rate levels, maturity, and whether they are protected by deposit insurance. When choosing funds, it is recommended to thoroughly review asset allocation status such as stocks and bonds, risk ratings, potential losses, and past returns. It should also be noted that financial products subject to the default option are not subject to limits on risky asset investments.

Son explained, "The default option is an investment product, so it does not have a function to prevent downside losses," adding, "however, when the government approves products, only those types with data showing that diversification across various assets can yield returns exceeding deposits are included as default option approval targets."

Meanwhile, Mirae Asset established the first investment education research institute among domestic financial companies in 2004, and the Retirement Pension Research Institute in 2005. In 2013, the two institutes were merged to launch the Retirement Research Institute, fostering social consensus on the necessity of preparing for retirement through investment. Since 2020, it has been operating under the name Mirae Asset Investment and Pension Center.

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