Retirement pension yield below the inflation rate – Retirement pension approaching 300 trillion won… Yield is only 2%

Retirement pensions increased by more than 40 trillion won over the past year, reaching a total of 300 trillion won. However, the annual rate of return was only 2%, less than the annual inflation rate of last year (2.5%).

According to ‘Statistics on the Management of Retirement Pension Reserves for 2021’ announced by the Ministry of Employment and Labor and the Financial Supervisory Service, as of the end of last year, the size of the retirement pension reserves stood at 295.6 trillion won. This is an increase of 40.1 trillion won (15.7%) from the previous year (255.5 trillion won). Retirement pension reserves, which stood at 147 trillion won in 2016, have grown more than 10% every year, more than doubling in five years.

When looking at the proportion by type of system, the defined benefit type (DB) accounted for the most at 171.5 trillion won. 77.6 trillion won for defined contribution (DC) and 46.5 trillion won for individual retirement pension (IRP) were accumulated. Compared to the previous year, the increase in reserves was greater for DC and IRP. DB-type deposits increased by 17.6 trillion won (11.4%), and DC/IRP special cases increased by 104.4 trillion won (15.4%). In particular, IRPs with tax benefits increased by 12.1 trillion won (35.1%) from the previous year, showing a steep growth of 30% for the third year in a row.

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