[Asia Economy Reporter Ji-hwan Park] Samsung Securities announced on the 19th that it has launched 'Samsung Securities Direct IRP,' the first in Korea to fully waive fees imposed on Individual Retirement Pension (IRP) accounts.
The Direct IRP is characterized by not charging any management or asset management fees, which financial companies currently impose at an annual rate of 0.1% to 0.5% on IRP accounts. It is explained that a retiree aged 55 who deposits 300 million KRW in retirement funds and earns an annual return of 3% over 20 years while receiving a pension can reduce fee burdens by more than 10 million KRW.
IRP is a type of retirement pension account designed to prepare income for retirement. It offers a tax credit benefit of up to 16.5% on contributions up to 7 million KRW annually. Dividend income tax (15.4%) is exempted on investment income, and when receiving a pension after age 55, a lower pension income tax (3.3% to 5.5%) is applied. For retirement funds, receiving them as a pension after age 55 reduces retirement income tax by 30%.
Recently, fueled by the enthusiasm for overseas stock investment, interest has increased as it has been highlighted that capital gains from trading overseas stock funds in IRP accounts are taxed at the lower pension income tax rate compared to dividend income tax. According to the financial investment industry, as of the end of last year, the total IRP balance at all securities companies was 7.5 trillion KRW, a 50% increase compared to 2019.
Lee Ki-tae, head of the Pension Division at Samsung Securities, said, "Comparing retirement funds and individual additional contributions within the total IRP balance in the financial industry, retirement funds account for about 55%, whereas in the securities industry IRP, the proportion of retirement funds is higher at 77%," adding, "This is analyzed as a demand to manage through securities company IRPs that allow active investment."
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