The retirement pension market, now exceeding 500 trillion won, is experiencing significant changes. With banks holding over half of the total pension assets, Shinhan Bank has overtaken Samsung Life to become the leading financial institution for the first time in 20 years. Meanwhile, securities firms are emerging as strong competitors, intensifying the race for capital.
According to the Financial Supervisory Service on June 15, the total retirement pension assets at the end of the first quarter were 264.12 trillion won for banks, 141.68 trillion won for securities firms, and 102.93 trillion won for insurance companies.
While the overall rankings by sector remained unchanged, Shinhan Bank recorded 54.73 trillion won, surpassing Samsung Life's 53.48 trillion won for the first time. This marks the end of Samsung Life's dominance, which has lasted since the introduction of the system in 2005. Shinhan Bank's rise to the top is attributed to the growth of defined contribution (DC) and individual retirement pension (IRP) plans. In contrast, Samsung Life, which has a higher proportion of defined benefit (DB) plans, saw its DB assets decline by over 1 trillion won in the first quarter, resulting in the loss of its top position.
Securities firms have shown the fastest growth. In the first quarter, the growth rate of retirement pension assets for securities firms was 31.7%, compared to 1.4% for banks and around 0% for insurance companies. Funds are shifting to securities firms, which offer a wider range of investment products, leading to a widening gap in growth among sectors.
Recently, a pre-transfer inquiry service for retirement pension assets has further accelerated the movement to securities firms. This service allows members to check the transferability of their holdings in advance, reducing uncertainty in the process of switching financial institutions. Securities firms provide more options for performance-based products, such as exchange-traded funds (ETFs), and allow real-time trading, making them relatively advantageous during market upswings.
For instance, Mirae Asset Securities saw an influx of 4.34 trillion won in retirement pension assets in the first quarter alone, accounting for 36.4% of the total new inflows in the market. Mirae Asset's combined DC and IRP assets reached 36.78 trillion won, making it the leader in the financial sector.
The next battleground is expected to be the fund-type retirement pension. The government plans to finalize specific implementation measures next month and push for related legal amendments within the year. Unlike the current system where individual members select their products, the fund-type structure pools contributions into a single fund managed by experts. If implemented as currently discussed, large asset management firms and securities companies with experience in pension funds and outsourced chief investment officer (OCIO) services are expected to have an advantage.
A financial industry official stated, “While the specific participation methods have yet to be confirmed, asset management companies are showing high interest in the fund-type retirement pension market. If large firms with experience in pension funds and OCIO services participate, they will likely demonstrate competitiveness based on their expertise.”
* This article has been translated by AI.
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