“What will happen to my retirement savings?” Retirement pension assets fall by 11.8 trillion won as stocks plunge

[Financial News]  The South Korean stock market’s sharp decline led retirement pension assets to fall by about 11.8 trillion won in the third quarter of this year. Returns on individual retirement pensions (IRPs) managed by securities firms fell sharply in particular, increasing the burden on subscribers managing their retirement savings.
According to third-quarter results for 43 retirement pension providers published on the Financial Supervisory Service’s Integrated Pension Portal, combined assets in defined benefit (DB), defined contribution (DC) and individual retirement pension (IRP) plans totaled 542.1214 trillion won. That was 11.7565 trillion won (2.12%) less than the 553.8779 trillion won at the end of the second quarter.
Retirement pension assets at securities firms fell by a larger percentage than those at providers overall. Assets at 15 securities firms declined by 4.7533 trillion won (2.88%), from 165.0468 trillion won to 160.2935 trillion won.
Among the types of retirement pensions, individual retirement pensions (IRPs) had the largest rate of decline. An IRP is an account in which employees can hold retirement benefits received when changing jobs or retiring, or deposit additional personal funds to manage.
IRP assets at securities firms fell from 65.6262 trillion won at the end of the second quarter to 62.7119 trillion won at the end of the third quarter. The decline over the three months was 2.9143 trillion won, or 4.44%.
Assets also declined in other types of retirement pensions. Defined benefit (DB) assets totaled 42.6501 trillion won, down 1.256 trillion won (2.86%) from the previous quarter, while defined contribution (DC) assets came to 54.9315 trillion won, down 583 billion won (1.05%).
Among securities firms, Mirae Asset Securities saw the largest decline in assets. Its retirement pension assets fell from 52.021 trillion won at the end of the second quarter to 49.9034 trillion won at the end of the third quarter. The decrease was 2.1176 trillion won, or 4.07%.
Korea Investment & Securities Co., Ltd. had retirement pension assets of 25.8873 trillion won at the end of the third quarter, down 517.1 billion won (1.96%) from the previous quarter.
NH Investment & Securities reported assets of 11.7466 trillion won, down 462.3 billion won (3.79%). Samsung Securities Co., Ltd. had 27.6694 trillion won, down 422.5 billion won (1.50%), while KB Securities had 9.6865 trillion won, down 414 billion won (4.10%).
Shinhan Securities’ retirement pension assets totaled 8.3317 trillion won, down 351.4 billion won (4.05%) from the previous quarter. Hyundai Motor Securities also reported 18.9431 trillion won, a decline of 192.2 billion won (1.00%). Assets fell by 151.6 billion won at Daishin Securities and by 90.5 billion won at Hana Securities.
By contrast, KIWOOM Securities Co., Ltd. saw its assets increase. Retirement pension assets rose from 64.9 billion won at the end of the second quarter to 188.2 billion won at the end of the third quarter, an increase of 123.3 billion won. The growth rate was about 190%.
Retirement pension returns were also affected by the stock market decline. The KOSPI rose to around 9,000 at the end of June but fell to around 6,800 by the end of September.
As a result, one-year returns on non-principal-guaranteed individual IRP products at securities firms fell sharply, from the 40%–50% range at the end of the second quarter to the 10%–20% range at the end of the third quarter.
The one-year return on Korea Investment & Securities Co., Ltd.’s non-principal-guaranteed individual IRP product fell by 31.31 percentage points, from 44.25% to 12.94%. Mirae Asset Securities’ return dropped by 32.38 percentage points, from 46.18% to 13.80%, while Samsung Securities Co., Ltd.’s fell by 33.75 percentage points, from 48.23% to 14.48%.
The one-year return on the corresponding product at NH Investment & Securities fell by 32.81 percentage points, from 47.80% to 14.99%. KB Securities’ return declined by 38.03 percentage points, from 52.98% to 14.95%, while Shinhan Securities’ fell by 35.52 percentage points, from 50.95% to 15.43%.
[email protected] Han Seung-gon Reporter