Expansion of Retirement Pension Investment Products and Blue Seed Enrollment... FSS and Ministry of Employment and Labor Focus on Improving Pension Yields

The Financial Supervisory Service (FSS) and the Ministry of Employment and Labor are taking steps to improve pension yields, such as expanding the range of retirement pension investment products and increasing eligibility for the Blue Seed program, a retirement pension fund system for small and medium-sized companies.

On the morning of March 11, at the FSS headquarters in Yeouido, Seoul, the FSS and the Ministry of Employment and Labor jointly held the "2026 Retirement Pension Business Briefing," attended by officials from banks, securities firms, and insurance companies, where they announced these initiatives.

Seo Jaewan, Deputy Governor of the FSS, stressed the need to enhance the returns of retirement pensions. He said, "With growing national interest in the KOSPI, attention to retirement pensions is also increasing. However, due to the prevailing focus on principal-guaranteed products, returns have fallen short of expectations. It is time to consider how retirement pensions, as one pillar of the 'three-tier pension system,' can support stable retirement for the public."

He added, "Service providers must move beyond simple competition for attracting reserves and strive to guide subscribers with rational strategies to improve retirement pension returns. They should present reasonable fees in line with the principle of subscriber benefit, and transparently disclose both returns and costs."

On this day, the FSS and the Ministry of Employment and Labor presented improvement measures to address the low-return structure of retirement pensions. The Ministry of Employment and Labor will expand Blue Seed eligibility and introduce various fund-type systems to boost returns. It also plans to improve the evaluation system for retirement pension service providers to encourage market competition.

In line with this, the FSS will expand the range of investable products within retirement pensions and introduce diversification requirements for target date funds (TDFs). This is intended to prevent concentration in specific assets and support stable yield management. Disclosure rules will also be improved so that management strategies can be easily verified. In addition, the FSS will establish the role of service providers for rational management of defined benefit (DB) reserves and will disseminate best management practices.

They are also working on systematic improvements to enhance pension functions. The Ministry of Employment and Labor is reviewing support measures that would allow subscribers to receive secured loans instead of making withdrawals when urgent funds are needed and plans to support the development of customized pension products for young people and low-income workers. The FSS is also considering improvements to withdrawal mechanisms to encourage pension-based payouts. In addition, campaigns will be conducted to help subscribers locate unclaimed reserves they may be unaware of.

Furthermore, the Ministry of Employment and Labor will begin a survey on the mandatory external reserve system as part of a step-by-step transition from the severance pay system to a pension system, aiming to increase pension coverage. The FSS will inspect improper business practices that infringe on benefit rights, working to establish a sound order in the retirement pension market.

The FSS and the Ministry of Employment and Labor plan to actively reflect the opinions presented at this briefing in future policy development, supervision, and inspection work.

This content was produced with the assistance of AI translation services.