After the implementation of the retirement pension physical transfer system at the end of October last year, more than 400 billion won flowed into securities firms over a period of three months, while there was a net outflow of approximately 460 billion won from banks. There are observations that the movement of retirement pension funds to securities firms will expand further.
Nice Credit Evaluation stated in its recently released report titled "Impact of MoneyMove on the financial industry - growth of securities industry and diversification of revenue" that "a total of 2.4 trillion won in reserves was transferred from the commencement of the retirement pension physical transfer service at the end of October 2024 to the end of January 2025, with a significant portion flowing into the securities industry."
The retirement pension physical transfer system, implemented from October 31 of last year, allows retirement pension subscribers to move products they were managing within their accounts to another retirement pension provider's account without selling them.
According to a joint announcement by the Ministry of Employment and Labor and the Financial Supervisory Service, the amount of retirement pension physical transfers showed that the largest transfer was 798.9 billion won moving from bank to bank, followed by transfers from "banks to securities" (649.1 billion won) and "securities to securities" (411.3 billion won). In terms of net inflow amounts due to the transfers, securities firms saw a net increase of 405.1 billion won, while banks experienced a net outflow of 461.1 billion won.
Nasimpyung noted that while defined benefit (DB) accounts still have a strong preference for banks and insurance, a clear movement of funds to the securities industry is evident in defined contribution (DC) accounts and individual retirement pension (IRP) accounts, which are managed directly by subscribers.
The analysis by Nasimpyung indicates that the securities industry is competitive in retirement pension-related exchange-traded funds (ETFs) and that its platforms are better than those of other industries. Nasimpyung stated that the movement of retirement pension funds to the securities industry will expand further.