[Editorial] Expanding the National Pension's Domestic Equity Allocation and Other Misuses Such as Market Stimulation Are Inadvisable (May 19, 2026)

As of the end of April, the total fund size of the National Pension is estimated to have reached approximately 1,700 trillion won, an increase of roughly 250 trillion won from the end of last year.

In a mere four months, this figure has already surpassed the entire annual investment return recorded last year (231 trillion won), representing nearly four times the projected pension contribution revenue for this year (64 trillion won). This remarkable performance has been driven in large part by the semiconductor stock rally.

However, such strong performance also presents a burden for the National Pension in certain respects. The rise in the KOSPI index has pushed the domestic equity allocation close to its prescribed ceiling, making artificial rebalancing unavoidable.

Should the fund proceed with rebalancing (asset reallocation) in accordance with its asset allocation principles, potential sell-offs of up to 130–150 trillion won would inevitably deliver a shock to the market. The Fund Management Committee's decision in January of this year to defer rebalancing was itself a measure taken in recognition of this reality.

The National Pension is the ultimate safety net sustaining the retirement security of the Korean people. It must pursue both profitability and stability in tandem.

Equity markets cannot be expected to rise indefinitely, and elevated returns are unlikely to persist. It would be imprudent to advocate for expanded domestic equity allocations simply on the basis that the domestic stock market is currently performing strongly.

A deepening home-country bias could undermine the risk-diversification function of the asset portfolio.

Furthermore, given that all four draft proposals put forward by the Ministry of Health and Welfare on the 15th were premised on an increase in the domestic equity allocation, concerns are emerging that the scope for misuse—including the deployment of the National Pension as a tool for stimulating the stock market—may be significantly broadened.

This underscores the need for the Fund Management Committee to put forward a balanced medium-term asset allocation plan that adequately mitigates risk. At the same time, discussions on the follow-on structural reform of the National Pension—which have effectively stalled during a period of improved fund returns—must also be accelerated.

https://n.news.naver.com/article/011/0004622136?sid=110