Democratic Party Proposes Reform of Retirement Pension System... Yeo Andogeol Proposes 'Retirement Pension Fund' Bill

[Financial News] The ruling party is promoting a plan to create retirement pensions as a fund and have them managed by professional operators. In particular, it allows subscribers to choose between contract-type and fund-type pensions according to their preferences, and allows private retirement pension operators that meet the requirements to participate in fund management, not just the Korea Workers' Compensation & Welfare Service.
Democratic Party member Andogeol announced on the 22nd that he had proposed an amendment to the Workers' Retirement Benefits Guarantee Act to expand the fund-type retirement pension system to all workplaces.
The amendment proposed by Representative An, a former Vice Minister of Strategy and Finance, aims to expand the scope of the fund-type retirement pension system, which is currently only introduced in small and medium-sized enterprises with fewer than 30 employees, to all workplaces. It aims to allow retirement pension subscribers to choose between contract-type and fund-type pensions according to their personal investment preferences.
Fund management is entrusted to professional operators authorized by the Minister of Employment and Labor, and private retirement pension operators that meet the requirements are also allowed to participate in fund management.
The fund-type retirement pension is a system that entrusts the accumulated funds of pension subscribers to professional management institutions. Unlike contract-type retirement pensions, which entrust fund management to individuals, it is evaluated as enabling systematic risk management and diversified investment.
The 'Small and Medium Business Retirement Pension Fund System' (Blue Seed), introduced in 2022 for small and medium-sized enterprises with fewer than 30 employees, recorded a cumulative return of 20% over the past three years and a return of 7.46% in the first half of this year.
Representative An believes that the amendment to the Workers' Retirement Benefits Guarantee Act will expand subscribers' choices and enable efficient and stable asset management through integrated management by experts. This is expected to substantially strengthen the original function of ensuring retirement income, improve returns through market competition, and reduce costs.
In addition, it is expected that retirement pension assets will be invested in productive areas such as companies and social infrastructure, injecting vitality into the capital market and contributing to the virtuous cycle function for national economic development.
Representative An emphasized, "Retirement pension reform is a key task that can transform the poverty of the elderly into a prosperous life," adding, "If the integrated fund-type system is expanded to private retirement pension operators, the return on retirement pensions, which is expected to exceed 1,000 trillion won by 2034, will significantly increase." He continued, "Improving returns naturally leads to increased subscription rates and improved retirement income, and the inflow of pension funds into productive areas such as the capital market, social infrastructure, and venture investment will also inject vitality into the national economy," adding, "This will be a groundbreaking turning point that saves both individuals' retirement security and the nation's future."

cjk@fnnews.com Choi Jong-geun Reporter