South Korean Pension Fund Allocation Exceeds 40% for First Time in Q2

South Korean pension savings account (PSA) fund allocations exceeded 40% for the first time at the end of the second quarter. According to the Financial Supervisory Service's integrated pension portal, PSA total reserves reached 212 trillion won at the end of H1, with pension fund reserves at 90 trillion won - representing 42.4% of total PSA assets. The shift reflects increased investor interest in pension funds and domestic stock market gains during the period.

Pension Fund Reserves Reach 90 Trillion Won in Q2

PSA total reserves (excluding Postal Service Headquarters and other reserves) reached 212 trillion won at the end of Q2, a 14.6% increase from 185 trillion won at the end of last year. Pension fund reserves reached 90 trillion won at the end of H1, up 26.9% from 70 trillion won in Q1. The pension fund proportion within PSA increased to 42.4% from 32.4% at the end of last year - a 10 percentage point increase.

Pension savings accounts are divided into three categories based on primary sellers: pension trusts (banks), pension funds (securities firms), and pension insurance (insurance companies). Pension funds allow subscribers to directly select and invest in exchange-traded funds (ETFs), public funds, and REITs in real-time. Bank pension savings accounts have restrictions on real-time trading of ETFs and REITs.

Pension Insurance and Trust Products Record Declining Reserves

Pension insurance reserves decreased 1.8% (2 trillion won) from 113 trillion won at the end of last year to 111 trillion won in H1. Pension trust reserves declined 8.2% (940 billion won) from 11 trillion won to 10 trillion won during the same period.

Samsung Fire & Marine Insurance's pension insurance product, which has the largest reserve scale, recorded a -4.75% one-year return at the end of H1. The TIGER US S&P500 ETF, which has the largest net assets among ETFs available for PSA investment, showed a 39.48% one-year return.

Insurance Product Cancellations Increase 62.7% in First Five Months

According to People Power Party lawmaker Song Eon-seok's office, pension insurance cancellations increased 62.7% in January-May compared to the same period last year. The data indicates subscribers canceling pension insurance to transfer pension assets to pension funds.

A financial authority official stated that the increase in pension fund reserves in H1 partially reflects the effect of domestic stock market gains. The official noted that Q3 pension asset status will be a key indicator.

FAQ

What percentage of South Korean PSA reserves are held in pension funds as of Q2? Pension funds account for 42.4% of total PSA reserves at the end of Q2, marking the first time the proportion exceeded 40%.

How did pension insurance reserves change in the first half of the year? Pension insurance reserves decreased 1.8% from 113 trillion won at the end of last year to 111 trillion won in H1.