The Financial Supervisory Service has begun inspections of retirement pension providers. This is aimed at checking for instances of infringement on beneficiaries' rights.
FSS announced on the 31st that it confirmed instances of violations of laws, discrimination against beneficiaries, and failure to fulfill fiduciary duties while inspecting 45 retirement pension providers.
One notable instance of sanctions is the act of allowing companies that adopted the defined benefit (DB) plan to re-enroll in existing products under unfavorable conditions after the deposits matured. Despite the existence of products with higher interest rates than the previously enrolled products, they were made to re-enroll in the same existing product using a "maturity re-deposit" method.
Such behavior was adopted by 74.8% of providers with fewer than 50 employees, more than double the 35.7% of providers with more than 500 employees.
At business sites that have adopted the defined contribution (DC) plan, it was also found that beneficiaries were keeping their accumulated funds as standby funds without long-term operation, yet no investment recommendations were made. Some providers exercised standby funds for most of the accumulated funds, accounting for 30% of the total, indicating poor management of long-term non-operating users.
In addition, it was confirmed that there were acts of presenting subsidiary products to beneficiaries to get them to enroll in products under unfavorable conditions or channeling limited high-yield products to large corporations. There were also cases of violating the Retirement Benefits Act by paying retirement benefits to employers rather than employees.
While the FSS stated it would impose strict sanctions for such acts, it urged workers to take an interest in their retirement pensions.
The FSS said, "Employers need to confirm whether they are paying contributions properly and should actively compare and choose products rather than settling for maturity re-deposits in the financial products they have enrolled in," and added that when receiving retirement benefits, it's important to check whether they are being paid timely or through the employer.