Corporate retirement pension funds gain 13.9% in 2023

Corporate retirement pension funds under management grew 13.9 percent from a year earlier in 2023, driven by a steady increase in the number of companies and workers adopting the system, data showed Monday.

Cumulative corporate retirement pension funds stood at 381 trillion won ($265.4 billion) as of end-2023, compared with 335 trillion won tallied a year before, according to the data compiled by Statistics Korea.

This reflects a consistent upward trend since the agency began compiling relevant data in 2015.

The program requires both employers and employees to contribute to the pension funds, with employees receiving the pension upon retirement.

"We have consistently seen an annual growth rate at around the 10 percent level since 2015," said Kim Ji-eun, an official at Statistics Korea. Kim also noted that individual retirement pension products recorded a significant on-year increase in 2023.

The number of companies implementing the retirement pension scheme for their employees rose slightly to approximately 437,000 last year, up from 436,000 in the previous year.

About 6.75 million workers, accounting for 53 percent of the total 12.72 million employees, were covered by the program in 2023.

Notably, the number of people withdrawing from retirement pension funds in the middle surged by 28.1 percent on-year to 64,000 in 2023, the data showed.

The total amount withdrawn also rose significantly, jumping 40 percent from 1.7 trillion won to 2.4 trillion won over the same period.

For those aged 20 years and younger, the most common reason for withdrawing their pension funds before maturity was paying for residential leases, while the primary reason for older age groups was home purchases. (Yonhap)