As major brokerages prepare to launch the first integrated investment management account (IMA) products, the market is watching whether they can be included as retirement pension investment options. Analysts say that if IMAs are added to retirement pension portfolios, subscribers could boost their pension returns, while the capital market could benefit from expanded supply of venture capital.
An IMA is a product in which a major securities firm invests client funds entrusted to it in corporate finance assets such as corporate bonds and acquisition financing loans to generate returns. At maturity, the securities firm guarantees the principal, and investors receive the contracted principal and returns. The expected annual return is around 3% to 7%, and any return above that is shared between the securities firm and the client at a fixed ratio.
According to the investment industry on the 16th, Korea Investment & Securities and Mirae Asset Securities have entered the final checks ahead of launching their first IMA products. Policymakers are said to be coordinating tax standards on IMA returns while reviewing terms and overall product structures to protect investors.
The industry is focusing on whether IMAs can be included among retirement pension investment options. As a principal-guaranteed, performance-linked product, an IMA guarantees principal at maturity while offering higher returns than traditional deposits. In particular, if the mid- to long-term investment structure of retirement pensions, which presuppose long-term management, aligns with IMAs, analysts say it could help improve pension returns.
An investment industry official said, "If mid-yield products that can pay principal at maturity, like IMAs, are included in retirement pensions, it would broaden investor choices while offering higher returns than existing principal-and-interest-guaranteed products," and added, "Returns could increase further if the compounding effect accumulates."
According to the Ministry of Employment and Labor (MOEL), as of the end of last year, performance-linked products in retirement pension accounts posted an annual return of 9.96%, far outpacing principal-and-interest-guaranteed products (3.67%). However, 82.6% of assets are allocated to principal-and-interest-guaranteed products and only 17.4% to performance-linked products, leaving the overall annual return of retirement pension assets at 4.77%. A conservative bias toward preserving principal is causing investors to miss out on practical opportunities to grow assets.
In addition, bringing IMAs into retirement pensions is seen as consistent with the system's aim of supplying venture capital. This is because comprehensive investment firms are required to supply to domestic venture capital an amount equivalent to 25% of the funds raised through IMAs.
A financial institution official said, "About 80% of retirement pension assets currently sit in principal-and-interest-guaranteed products such as deposits, but bank deposits are mainly used for collateral-based lending, limiting their effect on supplying funds to the capital market," and added, "If IMAs are allowed, securities firms could invest them in corporate finance and venture capital, creating a channel for pension funds to flow into the capital market."
However, to include IMAs among retirement pension investment options, the Retirement Pension Supervision Regulations must first be revised. To that end, coordination between the Financial Services Commission (FSC), which oversees the regulations, and the Ministry of Employment and Labor (MOEL) is essential.
An official at the Financial Services Commission (FSC) said, "We understand there is demand to include IMAs among retirement pension investment options," and added, "We are reviewing whether products such as IMAs can be used as retirement pension assets."