[Exclusive] Mirae Asset Securities to Manage SME Retirement Pension Funds

Asset Management Firm League, Re-bidding Conducted
If Samsung Unitary Bidding, Private Contract Awarded

Mirae Asset Securities

[Asia Economy Reporter Hwang Yoon-joo] Mirae Asset Securities has been selected as the operator (securities sector) of the country's first public retirement pension service, the 'Small and Medium Enterprise Retirement Pension Fund System.' The asset management sector plans to select through a re-bidding process.

According to the industry on the 22nd, the Korea Workers' Compensation and Welfare Service notified Mirae Asset Securities the day before that it was selected as the preferred negotiation candidate for the retirement pension fund system operator.

A representative from the Korea Workers' Compensation and Welfare Service explained, "The score difference with the bidding candidate KB Securities was not significant," adding, "The selection was made through quantitative and qualitative evaluations, including the retirement pension balance over the past three years and the retirement pension growth rate over the past three years."

The asset management sector will conduct a re-bid because Samsung Asset Management submitted a sole bid. According to the National Contract Act, if there is a sole bid, the bid is canceled and re-announced. If Samsung Asset Management submits a sole bid again in the re-bid, a private contract can be signed.

The Small and Medium Enterprise Retirement Pension System is a public pension service system starting in the second half of this year. The Korea Workers' Compensation and Welfare Service collects the accumulated funds of workers in small and medium enterprises (with 30 or fewer employees) to operate a joint fund and pay retirement benefits. From the workers' perspective, it has attracted attention as it provides social welfare for old age, and the securities and asset management industries are focusing on the fact that the retirement pension market will significantly open.

The SME Retirement Pension Fund Operation Committee held a bid on the 3rd to select operators (one securities company and one asset management company). Contrary to expectations, the bidding failed to attract interest. This was because the Korea Workers' Compensation and Welfare Service decided not to use the existing retirement pension reserves of 4 trillion won but to create a new fund investment pool. The operation period is four years, and fees are currently under negotiation. Considering this, it will be difficult for operators to generate profits in the early stages of the fund.

According to the Korea Workers' Compensation and Welfare Service, the amount of reserves to be managed this year is estimated at 150.9 billion won (95,326 workplaces). In the early stages of operation, institutions will inevitably have to operate at a loss. However, as the number of subscribers increases annually, the amount under management is expected to rise to 10.9382 trillion won by 2026.