Korean retail investors liquidated pension savings and mutual funds at sharply accelerated rates during the January-May period, according to data lawmaker Song Eon-seok obtained from the Financial Supervisory Service and Korea Securities Depository, as the KOSPI index fell 8.95% in a single trading day to close at 6,806.93. Pension savings insurance cancellations increased 62.7% to 72,477 cases compared to the same period last year, while fund redemptions surged 146.1% in value to approximately 2,786 trillion won. Song attributed the withdrawals to investors redirecting retirement assets into stocks amid rising market expectations, followed by increased volatility that now threatens individual investors' retirement security.
Pension Insurance Cancellations Rose 62.7% in January-May Period
According to data Song Eon-seok of the People Power Party received from the Financial Supervisory Service and Korea Securities Depository, pension savings insurance cancellations during the January-May period totaled 72,477 cases, a 62.7% increase from 44,554 cases during the same period last year. Cancellation amounts reached 1.7421 trillion won, up 54.8% from 1.1252 trillion won last year.
Fund redemptions also increased substantially. Total redemption cases during the January-May period reached 1,809,183, up 47.3% from 1,228,186 cases last year. Redemption amounts totaled approximately 2,786 trillion won, a 146.1% increase from approximately 1,132 trillion won last year.
KOSPI Closed at 6,806.93 with Samsung Electronics and SK Hynix Leading Decline
According to Korea Exchange, the KOSPI closed at 6,806.93 on the previous trading day, down 669.01 points (8.95%) from the prior session. The index fell 27.4% (2,578.66 points) from its intraday high of 9,385.59 on April 19. The KOSPI dropped below 7,000 for the first time since achieving '7000pi' on May 6 — 46 trading days (68 calendar days) after breaking 7,000 and 17 trading days (25 calendar days) after breaking 9,000.
Samsung Electronics and SK Hynix led the index decline. Samsung Electronics closed at 254,500 won, down 10.70%, while SK Hynix closed at 1,845,000 won, down 15.37%. SK Hynix's decline represented its largest single-day drop on record.
On the following trading day, the KOSPI opened at 6,769.06, down 0.56% from the previous session, then rose to 6,979.92 before falling back to the 6,700 range and trading around 6,800.
Lawmaker Song Calls for Stable Investment Environment Policy
Song stated that many citizens canceled pension savings insurance and redeemed funds to enter the stock market, but increased market volatility now threatens individual investors' retirement security. Song said the government should not focus on short-term stock market stimulus but instead create a stable investment environment through consistent policies the market can trust.
FAQ
How much did pension savings insurance cancellations increase during the January-May period?
Pension savings insurance cancellations increased 62.7% to 72,477 cases during the January-May period compared to 44,554 cases during the same period last year, according to data lawmaker Song Eon-seok obtained from the Financial Supervisory Service.
What percentage did the KOSPI fall in a single trading day?
The KOSPI fell 8.95% (669.01 points) to close at 6,806.93 in a single trading day, according to Korea Exchange data. Samsung Electronics declined 10.70% to 254,500 won and SK Hynix fell 15.37% to 1,845,000 won, with SK Hynix recording its largest single-day drop on record.
