금융산업
Overview of IRA-type Private Pension in Selected Countries
2011-09-14KIM, Young-Ran
목차
요약
IRA in Korea
● As of 2010, the balances of "corporate IRA" and "personal IRA" amounted to KRW 539.5 billion and 2.472 trillion respectively, whose market shares are still far smaller with 1.9% and 8.5% of the total corporate pension balance of 29.147 trillion than DB(72%) and DC(17.7%) plans.
● However, rapid growth is expected in the market, as the revised Employee Retirement Benefit Security Act will (i) loosen eligibility requirements, (ii) allow existing DC and DB plan holders to make additional contribution to IRA account, and (iii) make it mandatory to transfer lump-sum retirement allowance to IRA when an account holder moves to another employer.
IRA in Other Countries
US
● First introduced in 1974, the IRA in the US amounted to USD 4.2 trillion as of 2010, and has enjoyed high popularity as a source of retirement income, held by over 40% of households.
● The big success was attributable to (i) conversion of lump-sum retirement allowance, (ii) practical tax incentives, (iii) transition into DC pension scheme, (iv) few withdrawals, (v) changing landscape in the labor market, and (vi) mature-enough financial market among others.
Japan
● Following its pension scheme reform, the country is shifting to a new system (new DB and new DC plans) at a face pace, and particularly, individual DC plans still account for a small share with the market driven by new DB plans.
● As individual DC plans rely on voluntary contributions from self-employed workers and employees whose employers do not have corporate pension, it has only a limited growth potential with no driving forces in place such as conversion of lump-sum retirement allowance in the US.
UK: NEST (National Employment Savings Trust)
● The UK public pension faced a severe fiscal problem with rapid aging of the population and employee contributions to private pension schemes declined, resulting in the urgent need to revamp the national retirement income system. As a result, by 2012 the country plans to introduce NEST, a type of DC-type private pension.
● The NEST aims to have employees automatically enrolled in a pension scheme, to be contributed by not just employees (4%) and employers (3%), but the government (1%), and is expected to fuel the country's personal pension market.
Outlook for Korean IRA Market
● The local IRA market in Korea has a huge potential for growth in the mid to long-term, owing to (i) policy and institutional support, (ii) transition into DC pension scheme, and (iii) changing demography and labor market.
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