National Pension Fund's Record High 11.34% Return Last Year... "Maintaining Management Participation Purpose in Hanjin Kal Holdings"

[Asia Economy Reporter Ji-hwan Park] The National Pension Service's fund return rate last year reached an all-time high of 11.34%. Regarding the purpose of holding shares in Hanjin Kal, it was decided to maintain the existing management participation.

The National Pension Fund Management Committee held its 7th meeting on the 3rd at the Four Seasons Hotel in Gwanghwamun, Seoul, where it reviewed and approved the evaluation of last year's National Pension fund management performance and the performance bonus payment rate for the Fund Management Headquarters.

The National Pension Service achieved a fund management return rate of 11.34% last year. This marked a rebound just one year after a negative (-) 0.89% return rate in 2018, achieving the highest return rate in the past decade. Since the establishment of the Fund Management Headquarters in 1999, it earned the largest profit of 73.4 trillion KRW.

Looking at the return rates by asset class, domestic stocks yielded 12.46%, foreign stocks 31.64%, domestic bonds 3.55%, foreign bonds 12.05%, and alternative investments 9.82%. The Fund Committee explained, "The resolution of domestic and international financial market uncertainties, interest rate cuts by major advanced countries, and improved corporate earnings at home and abroad led to an increase in stock returns, which raised the overall portfolio return."

In particular, foreign stocks recorded a return rate exceeding 30%, influenced by the global stock market uptrend and exchange rates. Domestic stocks also contributed to the double-digit return rate of the National Pension Service, as the stock market rose nearly 10% on expectations of recovery in export companies such as the semiconductor industry.

Reflecting these achievements, the performance bonus payment rate for the National Pension Fund Management Headquarters last year was finalized at 73.7% (compared to base salary). This is the highest performance bonus payment rate since the establishment of the Fund Management Headquarters. The payment rates were 23.7% in 2015, 23.3% in 2016, 58.3% in 2017, and 45.4% in 2018.

On this day, Park Neung-hoo, chairman of the Fund Committee, said, "Although the National Pension's return rate is gradually stabilizing from the financial market shock caused by the novel coronavirus disease (COVID-19), it remains low," adding, "Given the recent increase in financial market uncertainties, thorough monitoring and proactive responses to market changes are necessary."

Chairman Park also expressed his intention to actively engage in market monitoring. He emphasized, "The National Pension will strengthen risk management such as market monitoring and respond flexibly to market changes according to pre-established rules," and added, "To increase long-term returns, we will steadily implement plans to expand overseas investments."

On this day, based on the 2019 evaluation results, the Fund Committee also finalized five policy recommendations necessary to enhance the National Pension's performance. The focus was on establishing a response system to new environmental changes, including expanding preemptive risk management foundations and reviewing the impact on fund investment strategies in the post-COVID-19 era.

Discussions were also held on the revision of the domestic stock fiduciary responsibility activity guidelines. Chairman Park explained, "This revision of the guidelines was prepared to clearly define the standards and procedures for the National Pension Fund's fiduciary responsibility activities, reflecting amendments to higher-level norms following the introduction of principles on fiduciary responsibility, the establishment of active shareholder activity guidelines for the National Pension Fund, and revisions to principles and guidelines related to fiduciary responsibility activities."

Regarding the National Pension Fiduciary Responsibility Expert Committee's review of changing the purpose of holding shares in Hanjin from the existing 'management participation' to 'simple investment' or 'general investment,' Chairman Park stated, "As a result of discussions at the Fiduciary Committee, there was a consensus that there is no special reason to change the purpose of holding shares in Hanjin Kal," adding, "Unless special circumstances arise in the future, this decision is expected to be continuously maintained."

This content was produced with the assistance of AI translation services.