A sharp rise in the KOSPI during the first half of the year drove a surge in workers switching retirement pensions from company-managed defined benefit plans to participant-managed defined contribution plans. The number of members making the switch in June and July reached 149,710, up 181.2% from 53,242 during the same period last year.
After the KOSPI peaked in June and declined, some members who moved to DC plans saw their returns fall by more than 10% within two months. The figures highlight the risk of shifting retirement assets toward market-linked plans after a strong rally without considering the possibility of a downturn.