Rollercoaster KOSPI Shakes Retirement Pensions... Losses Pile Up

[Anchor]

Many people are saying that the volatility in the domestic stock market is too extreme, and because it has plummeted so much recently, even when it goes up, it doesn't feel like a recovery. A lot of investors started managing their retirement pensions through stocks during the bull market a few months ago, and quite a few of them have reportedly suffered losses on their retirement funds.

Reporter Lee Tae-gwon has the story.

[Reporter]

Mr. A, an office worker in his 30s, switched his retirement pension to a Defined Contribution (DC) plan at the beginning of this year, which allows him to manage the funds himself.

He invested about 70 million won of his retirement pension mainly into domestic semiconductor ETFs. Following last month's stock market plunge, his portfolio's estimated value dropped by 20 million won from its peak.

[Mr. A / Retirement Pension Investor: About 70% of it went almost entirely into semiconductors, focusing mainly on places like Samsung Electronics and SK Hynix. (However, as the market fell) I gave back almost everything....]

Online posts are also continuing to surface about people suffering heavy losses after investing their retirement pensions in semiconductor stocks.

Retirement pension accumulations, which surpassed 500 trillion won for the first time at the end of last year, have been on an upward trend, reaching 553 trillion won in the second quarter of this year.

Among these, Defined Benefit (DB) plans, which companies are responsible for managing, saw a growth rate of just 1% in the second quarter, whereas DC plans surged by 14%.

It is estimated that many people switched to DC plans amid the stock market boom.

An analysis of pension accounts at a major domestic securities firm showed that half of the top 10 net-bought stocks from the beginning of this year until last month were domestic semiconductor-related ETFs.

The most heavily purchased ETF was a mixed product combining Samsung Electronics, SK Hynix, and bonds, which recorded a return of -12.9% last month, while the others also suffered double-digit losses.

[Kim Young-ki / Team Leader, Pension Consulting Department, Korea Investment & Securities: Because domestic semiconductor ETFs are heavily concentrated in just two stocks, rushing into investments that carry such high volatility can be disadvantageous in terms of diversification....]

As retirement timing is fixed, experts advise that an approach like Target Date Funds (TDFs)—which invest in high-yield assets early in the life cycle and focus increasingly on safe assets as retirement approaches—is necessary.

(Video by Kang Dong-chul | Video Editing by Ahn Ye-jin | VJ: Jung Han-wook | Design: Lee Jun-ho)
※ Please note: This article was translated by AI and may contain errors.