Hyundai Motor Securities introduces retirement pension asset-liability management system, expands reach to small and mid-sized companies

[Financial News] Hyundai Motor Securities has introduced an asset-liability management (ALM) system to analyze the liabilities of companies participating in defined benefit (DB) retirement pension plans and support the management of their reserves. It plans to expand its retirement pension consulting, previously provided mainly to large companies, to small and mid-sized companies.
According to the financial investment industry on the 5th, the newly introduced ALM system analyzes a company’s workforce composition, wage structure and retirement timing, among other factors, to calculate its medium- to long-term retirement benefit liabilities. It helps companies develop reserve management strategies tailored to the characteristics of their liabilities.
The system has four main functions: analyzing changes in retirement liabilities based on variables such as interest rates and wage growth; forecasting future changes in workforce structure; checking liquidity at each retirement benefit payment date; and estimating future reserve shortfalls. In particular, it is designed to calculate the projected funding ratio in advance so companies can secure any additional contributions needed ahead of time.
Until now, long-term analysis of retirement liabilities has required considerable time and manpower, so it has mainly been conducted for large companies. Hyundai Motor Securities plans to use the system to reduce the time required for analysis and expand the scope of its consulting. The need for companies to prepare in advance is also growing as the Ministry of Employment and Labor has recently stepped up oversight of DB plan sponsors’ obligation to address funding shortfalls.
An Ji-hun, head of the Pension Business Division at Hyundai Motor Securities, said, “The starting point for managing DB retirement pension plans is for companies to accurately understand their own retirement liabilities,” adding, “We will ease the burden on company representatives of analyzing liabilities and provide close support for systematic reserve management tailored to the characteristics of those liabilities.”
According to the Ministry of Employment and Labor, DB retirement pension reserves totaled 228.9 trillion won at the end of last year, accounting for 45.7% of all retirement pension reserves. Of that amount, 91.9% was invested in principal-and-interest-guaranteed products.

[email protected] Im Sang-hyeok Reporter