NewKerala.com

Key Points

South Korean corporate retirement pension funds experienced significant growth in 2024, reaching 431.7 trillion won. The funds saw a 12.9% increase from the previous year, though investment returns slightly declined. More employees are choosing monthly pension payments over lump-sum withdrawals. This trend reflects evolving retirement financial strategies in the country.

Key Points: S. Korea Corporate Pension Funds Hit $317 Billion in 2024

  • Corporate pension funds grew 12.9% in 2024
  • Average investment return dropped to 4.77%
  • Monthly pension payments trend increasing
2 min read

Corporate retirement pension funds reach $317 billion in S. Korea in 2024

South Korean corporate retirement pension funds surge 13% to 431.7 trillion won, marking historic growth despite declining investment returns.

"The corporate pension program allows employees to receive their pension in one lump-sum payment or monthly instalments - Yonhap News Agency"

Seoul, June 9

Corporate retirement pension funds grew nearly 13 percent from a year earlier in 2024, breaching the 400 trillion-won mark for the first time since their introduction in 2005, while their return on investment declined, data showed on Monday.

The total amount of corporate retirement pension funds under management came to 431.7 trillion won (US$317 billion) as of end-2024, up 49.3 trillion won, or 12.9 percent, from a year before, according to the data from the Financial Supervisory Service, reports Yonhap news agency.

The funds recorded an average return of 4.77 percent on their investments last year, down from the previous year's 5.26 percent.

The funds' average return on investment for the past five years came to 2.86 percent as of end-2024, with the 10-year average standing at 2.31 percent.

The corporate pension program was introduced in 2005, allowing employees to receive their pension in one lump-sum payment or monthly instalments after their retirement.

In 2024, out of some 573,000 people who received or began receiving payments from their corporate pension program, 13 percent chose monthly payments over a one-time payment.

The rate has been on a steady rise from 10.4 percent in 2023 and 7.1 percent in 2022.

Meanwhile, a majority of South Korean exporters recognise the need to employ artificial intelligence (AI) in their businesses to boost efficiency, but only a small fraction are actively utilising the technology, a survey showed on Monday.

According to the survey conducted from Feb. 17-19 by the Korea International Trade Association (KITA), 78 percent of 396 respondents from the export industry said AI adoption is necessary, but only 16.9 percent said they are actively using AI to improve productivity or manage tasks.

Another 68.7 percent answered they are either using it on a limited basis or still reviewing its usage.

The poll showed that 21.9 percent of the companies that use AI utilise such services in marketing and branding, while 19.7 percent utilise AI in planning and product development.

Cost burdens and a shortage of skilled personnel were cited as the top hurdles in AI adoption, at 26.1 percent and 25.4 percent, respectively.

KITA noted a lack of refined data and related infrastructure for industrial AI use, and called for a phased approach in fostering the use of AI among exporters.

- IANS

Share this article:

Reader Comments

R
Rahul K.
Impressive growth in South Korea's pension funds! 🇰🇷 We should learn from their system. In India, most private sector employees only have EPFO which gives very low returns. Need better retirement options for our workforce. The monthly payout option is smart - prevents people from spending all money at once.
P
Priya M.
The ROI is declining though - 4.77% is not great when inflation is considered. In India, NPS gives better returns but awareness is low. Also interesting to see AI adoption challenges - same issues we face here! Cost and skilled workers shortage are big barriers for Indian SMEs too.
A
Amit S.
South Korea's corporate pension system seems well-structured. In India, we need more financial literacy about retirement planning. Many people still depend only on children for old age support. The monthly payout percentage increasing shows people are thinking long-term. Good lesson for us!
N
Neha T.
The AI part is more interesting than pensions! 😄 78% recognizing need but only 16.9% actually using - classic implementation gap. Same story in India. Our startups are doing better though in AI adoption compared to traditional businesses. Maybe Korea can learn from our tech ecosystem too!
S
Sanjay V.
$317 billion pension fund is massive! Shows how developed economies plan for retirement. In India, we need stronger pension reforms - especially for unorganized sector workers who form majority of our workforce. The Korean model with choice between lump sum and monthly could work well here.
K
Kavita R.
While the numbers look good, 2.86% 5-year average return is concerning. Fixed deposits in India give better returns! They need to improve investment strategies. Also surprised only 21.9% use AI for marketing - Indian e-commerce companies are far ahead in this aspect. Everywhere I see AI chatbots now!

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50