Korea Investment Trust Management: "Retirement Pension Market to Surpass 1,000 Trillion Won in 10 Years"

Korea Investment Trust Management announced on the 25th through its official website and YouTube channel the outlook for the retirement pension market. Korea Investment Trust Management estimates the size of the retirement pension market annually by reflecting subscriber trends by age, including changes in population structure, the number of retirement pension subscribers, years of service, and total monthly wages, and revises the market outlook considering long-term returns.

According to the data released by Korea Investment Trust Management, the retirement pension market grew by 7 trillion KRW more than expected in 2023, reaching 432 trillion KRW last year. It is predicted to grow about 2.4 times to approximately 1,042 trillion KRW by 2034, increasing at an average annual rate of about 9.2%.

By retirement pension system, the defined benefit (DB) plan is expected to grow 1.8 times, and the defined contribution (DC) plan 2.6 times over the next 10 years. The individual retirement pension (IRP) is projected to show the largest growth at 3.6 times, leading the expansion of the retirement pension market.

As of the end of 2024, the DB plan accounted for about 50% of the total retirement pension market with 215 trillion KRW, the highest proportion, but it is expected to decrease to 37% with 389 trillion KRW by 2034. The DC plan is expected to increase in size from 118 trillion KRW to 302 trillion KRW, but its proportion is anticipated to remain similar to that at the end of 2024. For IRP, due to population structure changes such as aging, it is forecasted to increase from 99 trillion KRW to 351 trillion KRW, accounting for about 34% and becoming the main market.

By management method, principal-guaranteed products are expected to grow from 356 trillion KRW at the end of 2024 to 705 trillion KRW by 2034, and performance-linked products from 75 trillion KRW to 338 trillion KRW. The proportion of performance-linked products within DB-type retirement pensions is expected to increase due to the institutional establishment such as the mandatory introduction of the Investment Policy Statement (IPS).

Kim Seok-jin, head of the Pension Consulting Department at Korea Investment Trust Management, said, "The domestic population aged 60 and over is expected to increase from 14.1 million at the end of last year to 19.1 million in 10 years," adding, "The demand for the retirement pension market is also expected to rise accordingly."

He further explained, "As the proportion of older-age job changers and retirees increases, the IRP market is likely to expand relatively quickly."

The 2025 retirement pension market outlook report by Korea Investment Trust Management can be downloaded for free from the official website and YouTube channel of Korea Investment Trust Management.