National Pension Service Achieves 9.7% Return Last Year... Net Assets Increase by 97 Trillion Won in One Year

[Asia Economy Reporter Park Jihwan] The National Pension Service recorded a fund management return of 9.7% last year. As of the end of last year, the net assets of the National Pension Fund stood at approximately 833.7 trillion KRW.

The National Pension Fund Management Committee (hereinafter referred to as the Fund Committee), the highest decision-making body of the National Pension Service, held its 2nd meeting on the 24th at the Four Seasons Hotel in Jongno-gu, Seoul, where it reviewed and approved the 2020 National Pension Fund settlement plan.

According to the National Pension Fund settlement results, the net assets of the National Pension Fund at the end of last year were 833.7 trillion KRW, an increase of 97.1 trillion KRW compared to 2019.

The fund management income was recorded at 72.1 trillion KRW. This amount is approximately 1.4 times the insurance premium income of 51.2 trillion KRW collected from National Pension subscribers during the year. It is also 2.8 times the pension benefit payments of 25.6 trillion KRW.

Last year’s fund management return was tentatively calculated at 9.7%. Following the 11.3% return in 2019, this is the second highest performance in the past decade. The Fund Committee evaluated that "both domestic and international stocks and bonds achieved excess returns compared to the benchmark returns."

The Fund Committee analyzed that, due to market recovery after the outbreak of COVID-19 in the first half of last year, stock returns were relatively high, but the low interest rate environment and the depreciation of the KRW against the USD limited the rise in bond and overseas asset returns.

On this day, the Fund Committee also discussed agenda items related to responsible investment in the Environmental, Social, and Governance (ESG) sector.

The National Pension Service plans to discuss adding priority management issues in the environmental and social sectors in the first half of this year to strengthen the role of pension funds in responding to climate change, such as the spread of COVID-19 and increased natural disasters, and in preventing industrial accidents like safety incidents. Along with this, it will also review the introduction of investment restrictions and exclusion strategies.

At the meeting, the Fund Committee received a report on the review by the Trustee Responsibility Expert Committee of shareholder proposals recommending outside directors for some companies. The Fund Committee stated, "The National Pension Fund will monitor the activities of the Fund Management Headquarters and the Trustee Responsibility Expert Committee to enhance the long-term value and shareholder value of the companies it invests in, and will discuss this further at future Fund Committee meetings."

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