Last year, driven by a bullish stock market, pension savings balances neared 200 trillion Korean won, with annual returns exceeding 10%. Notably, annual returns for pension savings funds and exchange-traded funds (ETFs) approached 30%. Pension savings are voluntary products individuals join in addition to the National Pension and retirement pensions.

On the 18th, the Financial Services Commission and the Financial Supervisory Service announced in the “2025 South Korean Pension Savings Investment White Paper” that last year’s accumulated pension savings balance increased by 10.8% from the previous year (178.9 trillion Korean won) to 198.2 trillion Korean won.

By product type, pension savings funds saw a sharp rise of 50.7% year-on-year, with last year’s balance reaching 61.3 trillion Korean won. In contrast, pension savings insurance (114.1 trillion Korean won) and pension savings trusts (13.8 trillion Korean won) showed declines.

Last year’s pension savings return rate was 10.6%, higher than the cumulative return rate since inception (5.5%). This was influenced by high returns from pension savings funds due to the stock market boom.

By product, annual returns last year were highest for pension savings funds and ETFs at 29.3%, followed by pension savings trusts at 4.0%, and pension savings insurance at 0.8%.

The total number of pension savings subscribers last year was 8.403 million, a 10.0% increase (761,000 people) from the previous year. While those in their 40s–50s accounted for the largest share (50.5%), the highest growth rate was among those under 20 (53.4%).

Pension savings offer tax credits (13.2–16.5%) on contributions of up to 6 million Korean won annually, depending on income, along with deferred taxation and lower tax rates. Unlike individual-type retirement pensions (IRP), which are worker-focused, self-employed individuals and freelancers can also join. However, if principal amounts or investment gains that received tax credits are withdrawn early, they are classified as non-pension receipts and subject to a 16.5% other income tax.

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