Samsung Securities launches event for retirement pension account holders buying individual investor bonds

Samsung Securities said Wednesday that it will hold a "retirement pension individual investor bond event" for customers holding retirement pension accounts such as individual retirement pension (IRP) and defined contribution (DC) plans, offering a 10,000 won point coupon. The event will run through Dec. 31.

Government bonds for individual investors are products issued by the government, with principal and interest guaranteed by the state. If held to maturity, they earn compound annual interest at a rate combining the coupon rate and an additional spread, with principal and interest paid together on the maturity date. Investing through a retirement pension account defers taxation on investment gains until withdrawal, and pension income tax applies when the funds are received as a pension.

Retirement pension accounts are limited to investing up to 70 percent of total holdings in riskier assets, with the remainder required to go into stable assets such as deposits. Samsung Securities expects that adding individual investor bonds to the list of eligible retirement pension investments will widen the range of stable-asset options available to subscribers seeking long-term management.

Under the event, customers holding retirement pension IRP or DC accounts can subscribe to individual investor bonds through those accounts during the event period. Those who receive an allotment will be entered into a drawing for 500 winners, each receiving a 10,000 won point coupon. Details on the event are available through Samsung Securities' mobile app "mPOP" or Samsung Financial Group's integrated app "monimo."

The subscription periods for individual investor bonds are Sept. 9-15, Oct. 8-15, Nov. 11-17 and Dec. 9-15, each lasting five business days.

Sales began Wednesday of government bonds that individuals can purchase through retirement pension accounts, sparking fierce competition among banks and brokerages to attract customers. The financial firms through which individuals can buy government bonds via retirement pension accounts are three banks — Shinhan, Hana and NH Nonghyup — and five securities firms. The securities firms are Mirae Asset, Samsung, Korea Investment & Securities, KB and NH Investment & Securities. The products on offer are identical, as they are government bonds issued by the state. The 10-year and 20-year bonds carry coupon rates of 4.415 percent and 4.570 percent annually, respectively, with an additional spread applied to each.

A Samsung Securities official said, "We expect individual investor bonds to expand customers' options for managing retirement pension funds and contribute to their post-retirement asset management."