As Retirement Funds Near 500 Trillion Won, Fee Income for Financial Firms Hits Record (Image supported by ChatGPT)
SEOUL, Feb. 5 (Korea Bizwire) — South Korea’s retirement pension market is approaching 500 trillion won in assets, underscoring its emergence as a central pillar of household retirement savings. But as funds swell, so too do the fees collected by financial institutions — raising fresh concerns about whether the system is serving savers or providers.
According to data from the Financial Supervisory Service’s integrated pension portal, total retirement pension assets reached an estimated 495.1 trillion won ($—) at the end of 2025, up more than 10 percent from a year earlier. The pool now amounts to nearly one-third the size of the National Pension, highlighting its growing importance in the country’s aging society.
Yet the 42 financial institutions — including banks, brokerages and insurers — that manage these funds are also enjoying record fee income. Based on disclosed fee rates and asset balances, total fees collected in 2025 are estimated at roughly 2.13 trillion won, surpassing 2 trillion won for the first time. That compares with about 1.74 trillion won in 2024, implying an increase of some 400 billion won in a single year.
The structure of the system means that as assets expand, the absolute amount of fees rises even if rates edge lower. Analysts say the increase in fee income appears to be outpacing the growth in assets, suggesting that providers are among the chief beneficiaries of the market’s rapid expansion.
Large financial groups dominate the sector. Samsung Life Insurance, with around 61 trillion won in retirement assets under management, is estimated to have generated more than 220 billion won in annual fees. Major commercial banks such as KB Kookmin Bank and Shinhan Bank are also believed to have posted fee income in the high hundreds of billions of won.
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Critics argue that the current fee structure is only loosely linked to investment performance, fueling dissatisfaction among participants. While providers often emphasize marginal declines in fee rates, the underlying asset base has grown so large that total fee payments have climbed sharply.
The issue is particularly sensitive for participants invested in principal-guaranteed products, who tend to earn relatively modest returns while continuing to pay annual management fees. Meanwhile, fee income from performance-based products rose in the second half of 2025 alongside gains in the stock market.
Transparency remains another point of contention. Regulators primarily disclose fees as a percentage — known as the total expense ratio — rather than as an aggregate amount in won. Because asset balances and fee rates are reported separately, participants must perform their own calculations to determine how much a given provider collects in total.
Experts say that as the retirement pension market nears the symbolic 500 trillion won mark, policymakers should revisit how fees are calculated and disclosed. Proposals include publishing total fee income in clearer form and introducing tiered fee reductions as asset balances increase.
Without such reforms, analysts warn, the rapid growth of retirement savings risks entrenching the system as a stable revenue source for financial institutions rather than strengthening retirees’ long-term financial security.
Ashley Song (ashley@koreabizwire.com)
