"Strong Returns Are Enough, Aren't They?" — The National Pension's Long Road to Independence and Expertise [Column by Lee Eun-a] (February 5, 2026)

In 2014, the author visited ABP, the Dutch civil-service pension fund, to report on best practices in pension fund management. ABP had established a subsidiary, APG (All Pension Group), to handle fund management with independence and professional expertise, and had transferred its fund management operations to APG.

ABP delegated fund management to APG through an outsourcing arrangement; the author recalls writing an article recommending that the National Pension take note of APG, which was wholly independent from ABP's oversight and administration and devoted entirely to asset management, proposing it as a model for consideration.

(excerpt)

At that time, the National Pension allocated more than 50% of its portfolio to domestic bonds, investing predominantly in safe assets. The call for expanding investment in equities, alternative assets, and overseas markets—that is, higher-risk assets—to improve investment returns appeared entirely reasonable.

Another point on which experts were in broad agreement was the need to improve the governance structure of the National Pension Fund in order to strengthen its independence and professional capacity.

(excerpt)

As seats were distributed across constituencies—three employer representatives, three employee representatives, six regional subscriber representatives, and two sectoral specialists—it is difficult to identify, among the 21 committee members in total, anyone who could genuinely be regarded as a specialist in asset management.

This is the case even though the Fund Management Committee is the body responsible for determining investment policy directions, strategic asset allocation, and the proportion of externally managed assets.

The Stewardship Responsibility Expert Committee, established under the Fund Management Committee to review and determine matters related to shareholder rights exercise and responsible investment for fund-held equities, similarly has a low proportion of specialists in corporate governance or investment, and the details of its decision-making process are not disclosed transparently.

One might argue that strong investment returns demonstrate that governance is not a problem, but short-term performance cannot obscure all structural deficiencies.

Because the National Pension Fund must be managed with an extremely long-term horizon, insulating it from political interference and reinforcing professional expertise are prerequisites for achieving long-term sustainability and public trust.

At the end of last month, the National Pension Fund Management Committee held its first meeting of the year and resolved to reduce the target allocation to overseas equities from the existing 38.9% to 37.2%, and to increase the target allocation to domestic equities from 14.4% to 14.9%. It also decided to raise the proportion of domestic bonds and to issue foreign-currency-denominated bonds. The Ministry of Planning and Budget also revised its fund management evaluation guidelines to encourage the pension fund—with assets approaching 1,400 trillion won—to invest in venture capital and KOSDAQ-listed companies.

The decision comes at a time when concern is growing that the National Pension may be mobilized to defend the won against depreciation and to prop up the domestic stock market—a context that makes the decision difficult to view as entirely routine.

It is also notable that this decision was accompanied by a separate resolution to keep the detailed deliberation process of the Fund Management Committee undisclosed for four years.

https://n.news.naver.com/article/009/0005632618?sid=110&type=journalists&cds=news_edit