(Cheonji Ilbo) Pension Future Forum: “The Grounds and Risk Assessment Behind the National Pension’s Decision to Defer Rebalancing Must Be Disclosed” — National Pension Service: “Reserves Fell by 181.4 Trillion Won in a Month” (October 29, 2026)

(A Cheonji Ilbo article reporting in detail on

the content of the Pension Future Forum’s statement

of September 29, 2026.)

Raises concerns over the decision to expand the domestic stock allocation

and defer selling
“Changing the investment principles for the public’s retirement savings

requires thorough scrutiny”
Losses could widen if stock prices fall…

causal link not established
Warns of volatility in fund reserves

and stresses the importance of risk management
Urges submission of the minutes to the National Assembly and

clear accountability for decision-making

[Cheonji Ilbo=Reporter Lee Mun-seong]

Concerns have been raised over the investment stability of the National Pension Fund, the core social safety net that sustains the public’s life in old age.

The argument is that it must be verified whether the National Pension’s decision to expand its domestic stock allocation and defer rebalancing is consistent with the fund’s long-term management principles, and whether the risk of losses from falling stock prices was sufficiently examined.

On the 29th, the Pension Future Forum, a group of pension experts, issued a statement titled “Disclose the Conclusion and Seal Away the Grounds? — The National Pension Fund Management Committee Must Disclose the Grounds for Its Decision to Defer Rebalancing.”

In the statement, it urged the National Pension Fund Management Committee to disclose the grounds for, and the results of the risk assessment behind, the domestic stock rebalancing deferral it has already decided on.

The point is that, if the decision to defer rebalancing has left the National Pension holding a higher share of domestic stocks than originally planned, losses could widen when stock prices fall, so it must be confirmed how this risk was assessed in advance.

The position of the Pension Future Forum (the Forum) is that the public and the National Assembly must be able to verify whether there were sufficient grounds to change the existing asset allocation principles, what risks and alternatives were examined, and whether the decision-making process was rational.

◆ A pension fund that sustains the public in old age… the stability of its investment matters

The National Pension is a social insurance scheme under which the insured pay contributions during their working years, and pension benefits are paid when old age, disability, death, or the like makes earning an income difficult.

Especially in Korea, where population aging is advancing rapidly, the National Pension is a core social safety net that eases the fall in income after retirement and old-age poverty and maintains the public’s basic quality of life.

The National Pension Fund is the source of financing that underpins these pension benefit payments. In managing the fund, it is therefore important to secure long-term solvency and stability as well as to raise investment returns.

Ordinary investors can take risks based on their own judgment and accept the results. The National Pension, however, is different in nature, in that it is a public fund built from the contributions paid by the public.

The fund’s investment performance affects pension finances over the long term, and its results can affect not only current contributors but also the burden on future generations.

The Forum’s demand that the grounds for the decision to defer rebalancing be disclosed is also related to this public character of the National Pension.

On the 29th, the Pension Future Forum stressed that, given the nature of a public fund that sustains the public’s life in old age, both profitability and stability must be taken into account, and that the risk assessment and the grounds for the decision to defer rebalancing must be disclosed. The photo shows the Pension Future Forum’s 13th seminar on February 25. (Source: Pension Future Forum)

The Forum’s position is that, for a fund meant to secure the public’s life in old age, the expected risks and the measures to address them should have been thoroughly examined in the process of changing its investment principles.

◆ What is rebalancing? A mechanism for maintaining investment weights despite market fluctuations

Rebalancing refers to readjusting assets to the target weights originally set when the weights of investment assets such as stocks and bonds have shifted because of changes in market prices.

The National Pension spreads its fund across various assets, including domestic stocks, overseas stocks, bonds, and alternative investments. This is a diversification strategy to reduce the impact of price swings in any particular asset on the fund as a whole.

For example, assuming the target weight for domestic stocks is 20% and the permitted upper limit is 25%, if a rise in stock prices pushes the actual weight up to 27%, some stocks are sold to adjust the weight.

Conversely, if falling stock prices push the domestic stock weight below the permitted range, additional stocks may be bought to the extent necessary.

Such adjustments are not an attempt to profit by predicting short-term rises and falls in stock prices but a risk management tool for maintaining the asset allocation principles set in advance.

In actual fund management, a certain permitted range is set around the target weight, so trading does not take place immediately merely because the investment weight has shifted slightly.

A “rebalancing deferral” is a measure that postpones trading for a certain period even when the asset weights need to be adjusted.

If rebalancing is deferred while the domestic stock weight is elevated, the National Pension does not have to sell stocks right away. In that case, it can reduce the volume of large-scale sell orders coming onto the market, and if stock prices keep rising, this can also work in favor of the fund’s rate of return.

If, on the other hand, stock prices turn downward, the risk of incurring losses grows, since more domestic stocks are being held than originally planned.

In the end, a rebalancing deferral is not simply a matter of delaying the timing of stock sales; it can be a decision that changes the level of investment risk the National Pension takes on.

An image depicting the rebalancing process, in which the National Pension adjusts its investment weights by asset class, such as stocks and bonds, to spread risk and maintain the stability of fund management. ⓒCheonji Ilbo October 29, 2026.

◆ “What risk assessment did the rebalancing deferral go through?”

The Pension Future Forum focused on the National Pension Fund Management Committee’s decisions in 2026 to raise the target weight for domestic stocks and to defer rebalancing.

The Forum argued that the principles of strategic asset allocation and rebalancing must not be changed easily in response to market conditions.

Strategic asset allocation sets the investment weight of each asset class with long-term returns and risks in mind, and rebalancing is the means by which this strategy is maintained amid market fluctuations.

Therefore, if changing the target weights or deferring rebalancing merely because market conditions have changed becomes a recurring practice, the effectiveness of the asset allocation principles set in advance may be weakened.

What the Forum is asking for is material that makes it possible to judge the rationality of the deferral decision already made.

Specifically, the intent is to confirm how likely a fall in stock prices was judged to be when the target weight for domestic stocks was raised or rebalancing was deferred, and how the resulting risk of losses to the fund was assessed.

Also subject to verification are whether the option of carrying out rebalancing as scheduled was compared with the option of deferring it, and how the expected return and risk level of each were analyzed.

The Forum did not deny that the asset allocation strategy can be adjusted if the market environment or long-term investment outlook has changed.

Its position, however, is that the more a decision changes existing principles, the more it must be preceded by a thorough risk assessment and a review of alternatives.

◆ Citing the fall in fund reserves… reserves dropped by 181.4 trillion won in a month

In its statement, the Pension Future Forum presented the scale of the change in the National Pension Fund’s reserves to stress the importance of risk management.

According to the National Pension Service, the fund fell from 1,865.6 trillion won at the end of June 2026 to 1,684.2 trillion won at the end of July.

Going by the figures the National Pension Service announced, the reserves shrank by 181.4 trillion won in a single month, equivalent to about 9.7% of the end-of-June level.

As for these valuation losses, the Forum did not conclude that the decline occurred because of the rebalancing deferral.

Changes in fund reserves are affected by many factors, including not only changes in the valuation of holdings such as stocks and bonds but also exchange rates, contribution revenue, and benefit payments. The entire decline in reserves therefore cannot be interpreted as the result of investment losses or the rebalancing deferral.

The Forum’s point in highlighting the figure is that, since the asset value of a fund as large as the National Pension can change greatly with market fluctuations, risk management principles must be applied all the more strictly.

In particular, this leads to the point that investment performance needs to be compared between the case in which rebalancing was carried out normally and the case in which it was deferred.

For example, if stock prices fell while the share of domestic stock holdings was elevated as a result of the deferral decision, losses may have been larger than if the stocks had been sold as originally planned.

Conversely, if stock prices rose, the deferral decision may have raised the rate of return.

Whether the deferral actually affected the fund’s gains and losses, and how, can therefore be judged only by comprehensively analyzing the asset allocation weights at the time, subsequent market movements, the returns on the assets that would have been held instead, and other factors.

On the 29th, citing the case of the National Pension’s reserves falling by 181.4 trillion won in a month, the Pension Future Forum stressed the importance of risk management in fund management and urged an objective verification of the appropriateness of the decision to defer rebalancing and of its impact on gains and losses. The image was created with generative AI based on the content of the article. ⓒCheonji Ilbo October 29, 2026.

The issue the Forum raises is less an assertion that losses have occurred than a demand to disclose whether, in making a decision that could increase the risk of losses, that risk was sufficiently examined.

◆ “Why disclose the decision but hide the grounds for it?”

The Forum took issue with the fact that the National Pension Fund Management Committee disclosed its decisions to change the target weight for domestic stocks and to defer rebalancing, yet has not disclosed the minutes containing the grounds for them.

The government’s position is that the minutes must remain undisclosed for a certain period because disclosing them could expose investment strategy or affect financial markets.

The Forum, however, pointed out that, with the fact of the rebalancing deferral and the change in the target weight for domestic stocks already disclosed, it is not appropriate to withhold even the grounds that would allow the rationality of the decision to be verified.

In particular, it argues that, even while information that could directly affect the market, such as the specific timing of trades or the individual stocks invested in, is protected, the results of the risk assessment and of the review of alternatives, as well as the main decision-making process, can be disclosed.

The Forum stressed that the system that delays public disclosure of the minutes for a certain period must not become a means of evading responsibility for decisions.

It also pointed out that, under the National Pension Act, the competent standing committee of the National Assembly can have the relevant minutes submitted to it on a confidential basis if it so requests.

The Forum argued that “four years of nondisclosure is not four years of immunity,” and that the protection of investment information must be distinguished from public scrutiny of fund management decisions.

◆ Decisions on investing the public’s retirement savings need clearly identified accountability

The Forum also stressed that it must be made clear who is accountable for the decision to defer rebalancing.

The National Pension Fund Management Committee, chaired by the Minister of Health and Welfare, is the principal body that deliberates on and decides fund management policy, while the National Pension Service carries out the actual work of managing the fund in accordance with the investment policies decided.

The Forum argued that, in the process of changing important investment principles, a record must be kept of who made what judgment, what risks were examined, and which alternatives were chosen.

Such records become the basis for judging, when investment results are evaluated in the future, whether the decision at the time was rational.

A decision cannot be deemed unlawful or unjust merely because investment results were poor. But if existing principles were changed without a sufficient risk assessment, or if improper influence was at work in the decision-making process, a separate question of accountability may arise.

The Forum’s position is that the structure in which returns are emphasized when fund performance is good, but those accountable become unclear when losses occur, must be improved.

This goes beyond holding people to account after the fact for a particular decision and leads to the argument that an institutional foundation must be laid so that the major investment decisions of the National Pension Fund can be objectively verified and evaluated.

◆ Calls for National Assembly scrutiny, disclosure of the risk assessment, and institutionalized accountability

The Forum made three demands to secure the investment stability and accountability of the National Pension Fund.

First, it urged the National Assembly Health and Welfare Committee to exercise its authority under the National Pension Act to obtain and scrutinize the Fund Management Committee’s minutes concerning the rebalancing deferral and the change in the target weight for domestic stocks.

Next, it demanded that the Ministry of Health and Welfare and the National Pension Fund Management Committee, while protecting specific trading information that could affect the market, disclose the grounds for the deferral decision, the risk assessment, the alternatives examined, and the main points of discussion.

It further argued that a requirement should be institutionalized that, whenever the principles of strategic asset allocation and rebalancing are changed or deferred in the future, the reasons and the results of the review of alternatives be recorded and disclosed after the fact.

In particular, it stressed the need to make clear who holds the authority and the responsibility for important fund management decisions.

The National Pension is a social security scheme that guarantees stability in old age and a basic quality of life on the basis of the contributions the public pays during its working years.

Accordingly, not only the fund’s investment performance but also the rationality and transparency of the process of changing investment principles matter.

The core of what the Forum raised in this statement is not an assertion about whether the rebalancing deferral actually caused losses.

The focus is that, if an institution managing the public’s retirement savings has changed its existing investment principles, the public and the National Assembly must be able to confirm whether that decision serves the public’s long-term interests and whether the expected risks were sufficiently examined.

Professor Kim Sang-cheol of the Department of Social Welfare at Hansei University. (Source: Pension Future Forum)

Professor Kim Sang-cheol of Hansei University, who is active in the Forum, said in a phone call with this newspaper on the 29th,

“Since various opinions and interpretations can arise regarding the National Pension’s decision to defer rebalancing, the decision-making process and the grounds for the decision need to be disclosed and objectively verified,”

and stressed, “The public must be able to confirm what opinions were presented and what judgment was made on the basis of them.”

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