The National Pension Service (NPS) will resume rebalancing its domestic stock portfolio starting next month. Amid growing concerns about a large sell-off in the market, Chairman Kim Seong-joo stated, "We will minimize the impact on the market."
During an online press conference on June 23, Kim addressed the upcoming end of the temporary suspension of rebalancing and the future direction of domestic stock management. The NPS Fund Management Committee had previously decided in May to resume rebalancing in July after temporarily suspending it in January.
In response to allegations of the rebalancing being a means to boost the stock market or due to government pressure, Kim emphasized, "There have been significant profits from domestic stocks last year and this year, and we could not forgo this opportunity due to mechanical asset allocation criteria." He reiterated that the temporary suspension was a realistic decision aimed at maximizing returns.
Addressing market fears of a potential sell-off amounting to 50 to 60 trillion won, Kim maintained a cautious stance. He stated, "The NPS primarily invests in large-cap stocks, which significantly impact the market, so we will not act like private institutions that indiscriminately sell stocks for profit. We will act very cautiously in accordance with our principle of minimizing market impact."
He further explained that specific details regarding the timing and scale of sales will remain undisclosed, stating, "No pension fund in the world discloses this information, and it is appropriate to keep it confidential to prevent market disruption."
Looking ahead, Kim indicated that plans to reduce the proportion of domestic stocks will be flexible, depending on the market situation at year-end. He noted, "We have decided to gradually decrease the domestic stock allocation by 0.5 percentage points each year starting next year, but this will also be reassessed at year-end based on structural changes in the market rather than temporary factors."
Regarding pension reform, Kim dismissed the proposal to separate the old and new pension systems, suggested by the Korea Development Institute (KDI), as "theoretically conceivable but impractical in reality." He emphasized the importance of realistic measures, such as enhancing fund management returns and expanding state support for low-income insurance premiums, to prolong the fund's sustainability.
Additionally, during the press conference, the NPS outlined its key initiatives for the second half of the year, including preparations for the "First Pension Premium Support Program" for those born in 2009, set to launch in January 2027, the establishment of the "Dementia Assurance Asset Management Service" (public trust for dementia) that began pilot operations in April, and innovations in public services through collaboration with Kakao using artificial intelligence (AI).
During an online press conference on June 23, Kim addressed the upcoming end of the temporary suspension of rebalancing and the future direction of domestic stock management. The NPS Fund Management Committee had previously decided in May to resume rebalancing in July after temporarily suspending it in January.
In response to allegations of the rebalancing being a means to boost the stock market or due to government pressure, Kim emphasized, "There have been significant profits from domestic stocks last year and this year, and we could not forgo this opportunity due to mechanical asset allocation criteria." He reiterated that the temporary suspension was a realistic decision aimed at maximizing returns.
Addressing market fears of a potential sell-off amounting to 50 to 60 trillion won, Kim maintained a cautious stance. He stated, "The NPS primarily invests in large-cap stocks, which significantly impact the market, so we will not act like private institutions that indiscriminately sell stocks for profit. We will act very cautiously in accordance with our principle of minimizing market impact."
He further explained that specific details regarding the timing and scale of sales will remain undisclosed, stating, "No pension fund in the world discloses this information, and it is appropriate to keep it confidential to prevent market disruption."
Looking ahead, Kim indicated that plans to reduce the proportion of domestic stocks will be flexible, depending on the market situation at year-end. He noted, "We have decided to gradually decrease the domestic stock allocation by 0.5 percentage points each year starting next year, but this will also be reassessed at year-end based on structural changes in the market rather than temporary factors."
Regarding pension reform, Kim dismissed the proposal to separate the old and new pension systems, suggested by the Korea Development Institute (KDI), as "theoretically conceivable but impractical in reality." He emphasized the importance of realistic measures, such as enhancing fund management returns and expanding state support for low-income insurance premiums, to prolong the fund's sustainability.
Additionally, during the press conference, the NPS outlined its key initiatives for the second half of the year, including preparations for the "First Pension Premium Support Program" for those born in 2009, set to launch in January 2027, the establishment of the "Dementia Assurance Asset Management Service" (public trust for dementia) that began pilot operations in April, and innovations in public services through collaboration with Kakao using artificial intelligence (AI).
* This article has been translated by AI.
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