2011 Korea Pension Report
Fee rankings of service providers
With the launch of the 2nd edition, we have augmented our analysis with a greater focus on areas that are key to decision making, including a new section on Service Provider Fees as this is a key area of concern for pension sponsors.
Fund manager and investment style
We provide a snapshot of the Top 5 asset management companies by size of pension assets with a summary of their Korean equity and bond capabilities. The top 5 asset managers are Mirae Asset, Samsung, Korea, Shinyoung, and Korea Value.
2010 was considered a significant year in the future of corporate pension markets in Korea as existing tax benefits on legacy severance pay schemes were phased out. More than KRW 15 trillion has flowed into corporate pension schemes in 2010. Furthermore, the ratio of large scale companies adopting retirement pension system has noticeably increased. This in turn has changed the competitive landscape with dynamic shifts in service provider rankings as well as by industry sector where the banking industry has gained market share while the insurance sector has lost market share. Many of the most recent adopters of pension schemes have opted for DB plans, which led to a 6% increase in the proportion of DB assets in December alone. Another key development was the Financial Supervisory Service (FSS) crack-down on excessively high fixed rates on savings products or insurance GICs via the introduction of 'enhanced supervision of risk management for high-return guaranteed vehicles' in May 2010. Details on recent market developments and changes to pension regulations can be found in the full report.
For further information, please contact your local Towers Watson consultant, or contact Andy Jung at +82.2.3458.2932/2900 (andy.jung@towerswatson.com)
Copyright 2012 Towers Watson. All rights reserved.