Full-Scale Implementation of Retirement Pension Transfer System... Fierce Competition Among Financial Companies for Customer Acquisition [AK Radio]

The retirement pension transfer system, expected to bring significant changes to the retirement pension market, has been officially implemented since the 31st of last month. This system allows retirement pension subscribers to transfer their accounts to other financial institutions without selling their existing products, thereby promoting competition among financial companies and providing investors with diverse opportunities. However, it is important to recognize that there are institutional limitations and that active involvement from investors is still necessary. This article examines the background and effects of the introduction of the retirement pension transfer system, as well as what investors need to consider.

Introduction and Necessity of the Transfer System

Retirement pensions were introduced to manage workers' retirement assets stably and are divided into Defined Benefit (DB), Defined Contribution (DC), and Individual Retirement Pension (IRP) types. However, until now, transferring a retirement pension account required liquidating the product and repurchasing it, which involved significant costs and inconvenience. Interest losses, fees, and market losses during fund redemption have imposed additional burdens on investors.

The newly implemented retirement pension transfer system was introduced to resolve these issues. Now, subscribers can transfer their accounts while maintaining their existing products, reducing unnecessary costs and enabling them to choose financial institutions with better conditions. In particular, deposit products or funds that maintain agreed interest rates can be transferred without disadvantages, attracting investors' attention.

Transferable Products and System Limitations

The retirement pension transfer system offers convenience to subscribers, but not all products are transferable. Most retirement pension products such as deposits, public funds, and Exchange-Traded Funds (ETFs) are included in the transfer scope, but default option products (automatically managed by financial companies) or insurance contract-type products cannot be transferred. This shows that while the transfer system has expanded choices, some restrictions still remain.

Additionally, transfers between accounts are only possible within the same system. For example, DC-type accounts can only be transferred to DC-type accounts, and IRP accounts only to IRP accounts. If the desired financial institution does not handle the product, transfer is not possible, and in such cases, the existing method of selling the product and moving the account must be used. This can limit the convenience of the system.

Transfer Procedures and Financial Institutions' Response

The transfer procedure is relatively simple but requires checking detailed matters before proceeding. First, the subscriber must open an account at the new financial institution and submit a transfer application. During this process, the financial institution provides a list of transferable products and restrictions, confirming the subscriber's final intention. Then, the actual transfer takes place, and the result is notified via text message or app. The procedure usually takes three business days, but additional time may be required if products needing redemption are included.

Financial companies are actively competing to attract customers in line with the new system. Securities firms, in particular, are employing strategies to attract bank customers by offering various products and high returns. The number of ETFs handled by securities firms is about 770, which is significantly higher than the approximately 100 offered by banks and insurance companies. The ability to trade in real-time is also highlighted as an advantage of securities firms. On the other hand, banks and insurance companies emphasize stability and try to prevent existing customer attrition through product diversification and marketing.

Returns and Fees: What Matters?

Retirement pension returns can vary greatly depending on the investor's management. Since DC and IRP types require subscribers to make their own management decisions, a financial company's average return does not necessarily translate into higher personal returns. Therefore, subscribers should not be swayed by promotions and must choose financial institutions that match their investment preferences.

Fees are also an important consideration. For IRP accounts, fees vary significantly among financial companies, currently ranging from 0% to 0.4465%. Securities firms often offer free fee benefits to attract customers, presenting favorable conditions for investors. In contrast, insurance companies and banks tend to have relatively higher fees, requiring additional comparison.

Impact on the Financial Market and the Role of Investors

The retirement pension transfer system is reshaping the financial market landscape. Especially during periods of declining interest rates, the attractiveness of performance dividend products increases, and aggressive marketing by securities firms is expected to lead to changes in market share. As competition between banks and securities firms intensifies, efforts to provide better products and services to customers are expected to continue.

However, above all, the role of the investor is crucial. Retirement pensions are assets that investors must manage and operate themselves. Rather than simply moving to financial companies boasting high returns, it is essential to carefully select products and services that fit one's investment goals and circumstances. Continuous portfolio review and management efforts are necessary to achieve stable and satisfactory investment results.

Message to Investors

The retirement pension transfer system offers investors more choices and opportunities. However, responsible engagement from investors is required when utilizing the new system. Investors should not be swayed by various events, benefits, or return promotions offered by financial companies but should make choices aligned with their long-term financial plans.

In particular, the essence of retirement pensions lies in stable management of retirement assets. Investors should approach strategically from a long-term perspective rather than focusing on short-term benefits. Considering fees, product diversity, and financial institution stability comprehensively, and seeking expert advice when necessary, are also good approaches.