South Korean pension savings near $200 billion amid market boom, returns hit 29%

South Korea's pension savings have surged, with total accumulated assets approaching 200 trillion won by the end of last year, fueled by a robust stock market rally.

The Financial Services Commission's '2025 Korea Pension Savings Investment White Paper' revealed that total pension savings grew by 10.8% year-on-year to 198.2 trillion won. Pension savings, designed for retirement income, benefit from tax incentives like tax credits and tax deferrals. These savings are offered through funds, insurance, and trusts, with funds typically sold by securities firms and banks, insurance by insurance companies, and trusts by banks.

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The total pension savings reached 198.2 trillion won, an increase of 10.8% compared to the previous year.

Among the different products, pension savings funds experienced remarkable growth, with their accumulated assets jumping 50.7% to 61.3 trillion won. This contrasts with pension savings insurance, which stood at 114.1 trillion won, and pension savings trusts at 13.8 trillion won, both showing decreases. Pension savings trusts have seen a declining trend since new sales were halted in 2018.

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Pension savings funds and ETFs recorded the highest annual return of 29.3%.

The overall annual return for pension savings in 2025 reached 10.6%, a significant increase of 6.9 percentage points from the previous year, largely due to the stock market's ascent. Pension savings funds and ETFs (Exchange Traded Funds) led the performance, achieving the highest annual return of 29.3%. Pension savings trusts yielded 4.0%, while pension savings insurance returned a modest 0.8%.

The total number of pension savings subscribers rose by 10.0% to 8,403,000. Individuals in their 40s and 50s constituted the largest segment, making up 50.5% of all subscribers. Those in their 20s and 30s accounted for 27.3%, followed by individuals aged 65 and over (11.4%) and those aged 61-65 (9.7%). The Financial Services Commission noted a steady increase across all age groups following a revision to the Income Tax Act in 2023, which expanded the scope of tax credits.

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The number of subscribers increased by 10.0% to 8.4 million people.