The Financial Supervisory Service said on the 11th that it had overhauled the "retirement pension comparison disclosure" function on the Integrated Pension Portal to allow users to compare principal-and-interest-guaranteed products.
Since 2015, the Financial Supervisory Service has built the Integrated Pension Portal to provide information that retirement pension subscribers can refer to during the product design process. As of the end of Jun., the number of users of the Integrated Pension Portal reached 850,000.
The FSS recently revamped the retirement pension comparison disclosure menu within the Integrated Pension Portal to make it easy to compare principal-and-interest-guaranteed products. The aim is to compare rates of return and fee rates to help with retirement planning, providing a reference for selecting a retirement pension provider.
The existing retirement pension comparison disclosure system calculated retirement pension providers' rates of return by adding deposits interest rates and bond yields. As a result, when interest rate volatility was high, changes in bond prices made it difficult to compare rates of return. The FSS, through this overhaul, required principal-and-interest-guaranteed products to be disclosed by dividing them into "deposit-like" and "market-based."
The fee items, which have a significant impact on the final pension payout, were also improved. Retirement pension providers charge fees in proportion to the accumulated balance as compensation for management and asset management. Because retirement pensions, by their nature, have very long management periods, even small differences in fees have a major impact on rates of return.
Through this overhaul, the FSS made it possible to compare fees by enrollment type for each retirement pension provider. It is now possible to compare differences in fees between face-to-face and non-face-to-face enrollment, as well as to separate and compare management fees and asset management fees.
"The more conservative the subscriber's profile, the more sensitive they are to the impact of fees on rates of return," the FSS explained, adding, "It is important to compare the fee rates of the retirement pension provider you are enrolled with and those of other providers."