Will the National Pension Increase Its Domestic Equity Exposure? A Debate Between "Market Catalyst" and "Fund Depletion" (January 21, 2026)
- #연금특위
Meanwhile, National Pension experts have expressed concern over expanding the domestic investment allocation. Their view is that the National Pension — intended to secure the retirement income of the citizenry — must not be deployed for policy purposes aimed at propping up the stock market.
Kim Hak-ju, Professor in the Department of Social Welfare at Dongguk University, stated that "increasing investment under pressure from the government amounts to enlisting pension assets in pursuit of a policy objective," and explained that "since economic conditions, employment, and income are already strongly correlated with the domestic business cycle, tying pension assets further to domestic assets would mean that even the pension — the last line of defense — could diminish when the economy enters a downturn."
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Professor Kim further noted that "in a situation where the fund already holds more than 15% of the equity market, it would need to sell, yet there would likely be no foreign or retail investors capable of absorbing a stake exceeding 10%," and pointed out that "the very signal that investment direction is being swayed by policy can distort price formation and risk perception in the market."
Yoon Seok-myung, Honorary Research Fellow at the Korea Institute for Health and Social Affairs (KIHASA), also expressed concern, stating that "the current yield on 10-year government bonds (bonds the government issues with a promise to repay principal in 10 years) has exceeded 3.5%, which is an extremely serious development," and that "rising government bond yields mean there are insufficient buyers for Korean government securities." He further criticized that "Norway's fund is of a comparable scale to ours, yet it invests entirely overseas."
Hyun Jeong-hwan, Professor in the Department of International Trade at Dongguk University, also analyzed the situation, observing that "what is happening now is the use of self-dealing transactions to enhance equity returns," and that "the government is creating channels through which it can influence corporate governance — an action that increases volatility."
