Will the National Pension Increase Its Domestic Equity Exposure? — Concerns Over "Mobilizing Citizens' Retirement Savings" (2026-01-26)

(Ministry of Health and Welfare convenes National Pension Fund Management Committee on the 26th Discussions expected on adjusting domestic equity allocation and currency hedging ratio Concerns also raised over potential market shock when the National Pension moves into deficit)

A structural problem also exists: the larger the National Pension's allocation to domestic equities, the greater the market shock that will occur when those equities must be sold to fund benefit payments in the future.

When the projected fiscal deficit materializes — currently scheduled for 2048 — the National Pension will need to liquidate invested assets into cash for benefit disbursements. This is why analysts project that a large-scale withdrawal of the pension fund from domestic equity markets would cause a significant market shock.

Yun Seok-myeong, Honorary Research Fellow at the Korea Institute for Health and Social Affairs (KIHASA), told this publication that "it appears increasingly likely that the Fund Management Committee will adopt a decision to increase the domestic equity allocation," adding that

"one more government representative has been added to the Fund Management Committee. It is a dangerous proposition for the Fund Management Committee to mobilize citizens' retirement savings in pursuit of the government's policy objectives."

He further stated, "The fundamental nature of the pension must not be sacrificed for the short-term remedy of propping up the stock market."

https://m.kukinews.com/article/view/kuk202601250057#_enliple