Retirement pension assets topped 500 trillion won for the first time last year, data showed.

According to the "2025 White Paper on Retirement Pension Investment in South Korea" released on Tuesday by the Ministry of Employment and Labor and the Financial Supervisory Service, retirement pension assets stood at 501.4 trillion won at the end of last year. That was up 69.7 trillion won, or 16.1 percent, from 431.7 trillion won at the end of the previous year.

Retirement pension assets surpassed 500 trillion won again after one year, following 382.4 trillion won in 2023 and 431.7 trillion won in 2024.

By plan type, the defined benefit plan totalled 228.9 trillion won, accounting for 45.7 percent of the total. The defined contribution plan stood at 141.6 trillion won, or 28.2 percent, followed by IRP at 130.9 trillion won, or 26.1 percent. IRP grew rapidly, posting a growth rate in the 30 percent range for a second consecutive year.

A shift in investment preferences was also evident. The share of performance-linked products in total assets was 24.6 percent, nearly doubling over three years. Investment in ETFs totalled 48.7 trillion won and recorded a growth rate in the 100 percent range for a third consecutive year, accounting for 39.6 percent of performance-linked retirement pension assets.

The annual return on retirement pensions was 6.47 percent, the highest since the system was introduced. The return on performance-linked products was 16.8 percent, about five times the 3.09 percent return on principal-protected products. By plan type, IRP had the highest return at 9.44 percent, followed by the defined contribution plan at 8.47 percent and the defined benefit plan at 3.53 percent.

The gap in returns among participants widened sharply. The top 10 percent of participants by return invested 84 percent of their assets in performance-linked products, while the bottom 10 percent managed 74 percent in principal-protected products, the survey found.

The labour ministry and the FSS said they plan to publish a "retirement pension guidebook" in the second half and push ahead with improvements to the default option system and the introduction of fund-type retirement pensions.