The use of retirement pension transfer services is rapidly increasing, prompting financial authorities to enhance the service by allowing inter-system transfers.
The Financial Supervisory Service (FSS) announced on August 24 that it held a kickoff meeting for the 'Retirement Pension Transfer Improvement Task Force (TF)' with 17 institutions, including the Korea Securities Depository, the Korea Financial Investment Association, and retirement pension providers, to discuss improvement tasks.
Retirement pension transfers allow participants to change their retirement pension provider without selling or terminating their existing investment products. Since its implementation on October 31, 2024, it has expanded participants' choice of providers and promoted competition among them.
However, the current transfer process is limited to within the same system. Transfers can only occur from DB to DB, DC to DC, or IRP to IRP, making it difficult for DC participants to transfer to another provider's IRP. Accounts holding funds that have been suspended from redemption are also restricted from transferring.
Additionally, the requirement to record participants' consent during the transfer process has led to delays. When transfer requests are canceled or denied, participants do not receive specific reasons, resulting in complaints and highlighting the need for process improvements.
The FSS plans to address these inconveniences through the TF. Initially, it will work on developing systems to allow transfers from DC to other providers' IRPs and discuss including suspended redemption funds in the list of transferable products.
The method of confirming participants' consent will also be improved. In addition to recording, the FSS will establish secure methods to verify participants' transfer intentions and ensure that specific reasons are provided when requests are canceled or denied.
The FSS aims to finalize specific improvement directions by September and begin system development in October. The TF will operate until 2027 to promote system enhancements.
According to the FSS, the cumulative amount of transfers reached 15.9 trillion won by the end of June 2026. The number of transfers totaled over 250,000, averaging 26.1 billion won and 409 transfers per day.
Notably, the transfer volume in the first half of this year was 6.9 trillion won, more than double the 3.2 trillion won recorded in the same period last year. The semiannual transfer volume has expanded from 1.9 trillion won in the second half of 2024 to 3.2 trillion won in the first half of 2025, 3.8 trillion won in the second half of 2025, and 6.9 trillion won in the first half of this year.
By region, transfers from banks to securities firms accounted for 5.2 trillion won, or 33% of the total. Transfers between banks also amounted to 4.5 trillion won, representing 28%. This indicates active changes among providers within the banking sector alongside the movement of funds to securities firms.
By system, the transfer volume for Individual Retirement Pension (IRP) was the highest at 6.8 trillion won, followed by Defined Contribution (DC) at 4.8 trillion won and Defined Benefit (DB) at 4.3 trillion won. The trend shows that DC and IRP funds are moving from banks and insurance companies to securities firms, while DB funds are shifting from securities firms to banks and insurance companies.
The FSS stated, “As the use of retirement pension transfer services expands, we will continue to improve the systems and procedures to ensure participants can use the services more conveniently.”
* This article has been translated by AI.
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