Offering Number and Choice of Investment Options in Defined Contribution Plans

Kyonghee, Lee; Song, Inwook

doi:10.17342/kij.2019.119.3

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“…이를 방지하기 위해서는 퇴직연금펀드의 선정 및 유지, 폐쇄의 권한을 가진 퇴직연금사업자의 역할이 매우 중요하다. 퇴직연금사업자의 상품제공 및 추천이 가입자의 선택에 영향을 미치며(Bae et al, 2019;Lee and Song, 2019;Benartzi and Thaler, 2001), 사업자의 상품제공 능력이 결과적으로 가입자의 성과로 연결된다(Kim et al, 2020). 현재 퇴직연금사업자들은 가입자의 선택의 폭 확대라는 측면에서 500～600개에 이르는 퇴직연금펀드를 라인업(line-up) 하고 있으나, 다양한 상품은 오히려 선택에 대한 부담이 커지며, 혼란을 초래하여 정보부족하에서 선택하는 결과를 가져오게 된다(Huberman and Jiang, 2006;Iyengar and Lepper, 2000).이에 정책적으로도 디폴트 옵션을 비롯해 선택을 제한하는 다양한 형태가 고려될 필요가 있다.…”

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Comparing the Performance and Management Style of Retirement Pension Funds before and after the Private Pension Activation Plan

Song¹,

Choi²

2021

Korean J Financ Stud

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We analyzed and compared the performance and management style of retirement pension funds before and after the private pension activation plan (PPAP). First, we found that retirement-pension funds showed better performance than public funds before the PPAP. However, after the PPAP, the retirement-pension market size increased and the difference in performance disappeared. Second, we found that the difference between top and bottom performance group in the retirement pension fund becomes more significant after the PPAP. Third, we found that various investment strategies such as small-medium size stock investment and sector investment are offered in the retirement-pension fund only to result in the inferior performance. Finally, when we compared the management style, the retirement-pension funds showed a smaller value factor compared to public funds for the period after the PPAP. Therefore, we argue that the fund selection has become a more significant factor in determining the retirement fund performance after the PPAP. However, considering that the average retirement-pension holders’ financial knowledge is rather low, the expansion of fund choices may adversely affect the pension holder’s performance. Therefore, a retirement-pension provider’s role as fund selection authority has become more critical, and it is necessary to establish an institutional device that can manage, supervise, and monitor their activities.

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