금융산업
Development Trend of Foreign Retirement Income Products and Its Implications
2010-06-16JUNG, Seung-Hee
목차
요약
Definition and Type of Retirement Income Products
Retirement income products are a financial product used in the stage where pre-retirement asset accumulation is converted into retirement income, and widely classified into income guaranteed and non-guaranteed products depending on whether or not 'an even flow of income' is guaranteed
Non-guaranteed products are a product that creates a flow of income through various asset distribution strategies and include ① interest-bearing products such as regular savings, coupon bond and dividend stock and ② retirement income funds that structurize asset distribution and regular withdrawal
Guaranteed products are a retirement pension product offered by insurance companies and include ① immediate annuity and ② variable annuity with diverse minimum living assurance benefits
Although it depends on specific products, non-guaranteed products generally may be exposed to investment·longevity risks because individuals are responsible for asset management, but are highly flexible in withdrawing income. on the other hands, guaranteed products guarantee an even flow of income for one's lifetime or a specific period, but give individuals limited control power
Development Trend of Foreign Retirement Income Products
US
As the baby boomer generation that accounts for 26% of the total population has been
gradually included in retired population since 2005, a lump sum pension payment is preferred to annuity payment
Accordingly, at the time of retirement, individual retirees need to create stable retirement income through proper asset distribution more than ever
As for income guaranteed products, variable annuity products with guaranteed minimum accumulation benefits and guaranteed minimum income benefits have been introduced since late 1990s. At the beginning of 2000s, those with guaranteed minimum withdrawal benefits and lifetime guaranteed minimum withdrawal benefits were released and have been mainstreamed in the variable annuity market
on the other hand, among non-guaranteed products, while interest-bearing products are traditionally used, retirement benefit funds are not widely used. However, since 2007, large asset management companies including Fidelity and Vanguard are introducing more retirement income funds
Japan
The current aging rate exceeds 20% in Japan, one of the most aging nations in the world. Since 2007, Japan's own baby boomer generation known as the "dankain generation" has started retiring
Japan's retirement annuity system is in the early stage. In the existing severance pay system, a lump sum payment is generally used. Accordingly, individual retirees feel burden of old-age income security at the time of retirement
Since regular savings which have been used as a traditional retirement benefit product have limitations of creating retirement income due to a continuous low interest rate regime, retirement income funds have been introduced since 1990s, accounting for 33% of the total fund assets
Examples of Key Foreign Retirement Income Products (mainly non-guaranteed
products)
Examples of interest-bearing products
US Fidelity, Bond Ladder : This is a bond investing strategy targeting retirees that maintain the same bond holdings in every remaining period. Ladder options are actively recommended so that profitability can be maintained on average
US T.Rowe Price, CD Ladder : This is provided via online program called Smart Ladder CD. The minimum deposit required is $25,000, automatically creating a CD ladder. Different rates are provided depending on the total amount invested
Examples of Retirement Income Funds
US Fidelity, Fidelity Income Replacement Fund : This provides part of principal and profit on a monthly basis. The monthly amount withdrawn is automatically calculated to reflect inflation rates. The remaining balance will be provided to investors upon maturity and automatically settled
US Vanguard, Vanguard Managed Payout Fund : This is designed to maintain principal and create a flow of income by only using additional asset management profits. There are three types of funds with no maturity. Their monthly payment rates are 3%, 5% and 7% respectively
US Charles Schwab, Monthly Income Funds : As Vanguard does, this is a retirement income fund designed to maintain principal. There are three types of funds depending on monthly payment level. Annual payment rates vary depending on interest rates
Japanese Kokusai, Global Sovereign Open : This is Japan's representative distribution funds. Distribution periods are one-month, three-month and one-year. This is designed to maintain principal and annual distributions vary depending on asset management performance
Japanese Nomura, US-REIT Open : This is a distribution fund that mainly invests in REIT. There are four types of funds depending on profit distribution periods and FX hedge
Conclusion and Implications
In Korea, domestic baby boomer generation that as of 2010, reaches approximately 712 people, accounting for 14.6% of the total population will start retiring
However, since the retirement income replacement ratio of the National Pension Scheme that the baby boomer generation depends on as a key old-age income source is only 40%, separate plans for old-age income security are required
However, while regular savings offered by banks and immediate annuity products by insurance companies are widely used, retirement income funds or interest-bearing products like bond/CD Ladder tools by securities companies are still new to domestic customers
Retirement income products are a financial product used in the stage where pre-retirement asset accumulation is converted into retirement income, and widely classified into income guaranteed and non-guaranteed products depending on whether or not 'an even flow of income' is guaranteed
Non-guaranteed products are a product that creates a flow of income through various asset distribution strategies and include ① interest-bearing products such as regular savings, coupon bond and dividend stock and ② retirement income funds that structurize asset distribution and regular withdrawal
Guaranteed products are a retirement pension product offered by insurance companies and include ① immediate annuity and ② variable annuity with diverse minimum living assurance benefits
Although it depends on specific products, non-guaranteed products generally may be exposed to investment·longevity risks because individuals are responsible for asset management, but are highly flexible in withdrawing income. on the other hands, guaranteed products guarantee an even flow of income for one's lifetime or a specific period, but give individuals limited control power
Development Trend of Foreign Retirement Income Products
US
As the baby boomer generation that accounts for 26% of the total population has been
gradually included in retired population since 2005, a lump sum pension payment is preferred to annuity payment
Accordingly, at the time of retirement, individual retirees need to create stable retirement income through proper asset distribution more than ever
As for income guaranteed products, variable annuity products with guaranteed minimum accumulation benefits and guaranteed minimum income benefits have been introduced since late 1990s. At the beginning of 2000s, those with guaranteed minimum withdrawal benefits and lifetime guaranteed minimum withdrawal benefits were released and have been mainstreamed in the variable annuity market
on the other hand, among non-guaranteed products, while interest-bearing products are traditionally used, retirement benefit funds are not widely used. However, since 2007, large asset management companies including Fidelity and Vanguard are introducing more retirement income funds
Japan
The current aging rate exceeds 20% in Japan, one of the most aging nations in the world. Since 2007, Japan's own baby boomer generation known as the "dankain generation" has started retiring
Japan's retirement annuity system is in the early stage. In the existing severance pay system, a lump sum payment is generally used. Accordingly, individual retirees feel burden of old-age income security at the time of retirement
Since regular savings which have been used as a traditional retirement benefit product have limitations of creating retirement income due to a continuous low interest rate regime, retirement income funds have been introduced since 1990s, accounting for 33% of the total fund assets
Examples of Key Foreign Retirement Income Products (mainly non-guaranteed
products)
Examples of interest-bearing products
US Fidelity, Bond Ladder : This is a bond investing strategy targeting retirees that maintain the same bond holdings in every remaining period. Ladder options are actively recommended so that profitability can be maintained on average
US T.Rowe Price, CD Ladder : This is provided via online program called Smart Ladder CD. The minimum deposit required is $25,000, automatically creating a CD ladder. Different rates are provided depending on the total amount invested
Examples of Retirement Income Funds
US Fidelity, Fidelity Income Replacement Fund : This provides part of principal and profit on a monthly basis. The monthly amount withdrawn is automatically calculated to reflect inflation rates. The remaining balance will be provided to investors upon maturity and automatically settled
US Vanguard, Vanguard Managed Payout Fund : This is designed to maintain principal and create a flow of income by only using additional asset management profits. There are three types of funds with no maturity. Their monthly payment rates are 3%, 5% and 7% respectively
US Charles Schwab, Monthly Income Funds : As Vanguard does, this is a retirement income fund designed to maintain principal. There are three types of funds depending on monthly payment level. Annual payment rates vary depending on interest rates
Japanese Kokusai, Global Sovereign Open : This is Japan's representative distribution funds. Distribution periods are one-month, three-month and one-year. This is designed to maintain principal and annual distributions vary depending on asset management performance
Japanese Nomura, US-REIT Open : This is a distribution fund that mainly invests in REIT. There are four types of funds depending on profit distribution periods and FX hedge
Conclusion and Implications
In Korea, domestic baby boomer generation that as of 2010, reaches approximately 712 people, accounting for 14.6% of the total population will start retiring
However, since the retirement income replacement ratio of the National Pension Scheme that the baby boomer generation depends on as a key old-age income source is only 40%, separate plans for old-age income security are required
However, while regular savings offered by banks and immediate annuity products by insurance companies are widely used, retirement income funds or interest-bearing products like bond/CD Ladder tools by securities companies are still new to domestic customers
관련 보고서
#연금
동일저자 보고서