Go to Contents Go to Navigation

S. Korea pension fund lacks independence: think tank

Finance 11:12 March 19, 2019

SEOUL, March 19 (Yonhap) -- South Korea's pension service needs to remain insulated from government intervention and secure more experts for asset management, a local think tank said Tuesday.

In contrast to overseas state pension funds, the National Pension Service (NPS) is under the Ministry of Health and Welfare and the welfare minister heads the NPS asset management committee, the Korea Economic Research Institute (KERI) said in a statement.

Overseas state pensions used for comparison include Japan's Government Pension Investment Fund (GPIF), the Canada Pension Plan Investment Board (CPPIB), the California Public Employees' Retirement System (CalPERS) and the ABP in the Netherlands.

Financial experts and asset managers, not government officials, head the asset management committees in these pension services, which means little government intervention, KERI statement said.

But the Seoul government appears to have a say in key decisions at the NPS as five out of 20 members of the NPS asset management committee are incumbent ministers or vice ministers and NPS chairman and CEO Kim Sung-ju, it said.

As for voting rights, the NPS as an investor is expected to actively wield its rights at shareholders meetings starting in March this year after it adopted a stewardship code last year. A stewardship code allows an investor to engage in management decisions of the companies it has invested in.

In contrast, overseas pension funds have outside asset management firms and experts groups exercise their voting rights at shareholder meetings.

The NPS is the world's third-biggest pension fund, with 639 trillion won (US$565.2 billion) under its management.

S. Korea pension fund lacks independence: think tank - 1


Send Feedback
How can we improve?
Thanks for your feedback!