National Pension Service to Re-discuss Changes in Domestic Stock Investment Limits Next Month

[Asia Economy Reporter Park So-yeon] The National Pension Service (NPS) discussed changing the rules to reduce selling pressure on domestic stocks but did not reach a conclusion. They decided to review the matter again next month.

On the 26th, the NPS's highest decision-making body, the Fund Management Committee (Fund Committee), held a meeting to discuss changing the rule for maintaining the target ratio of domestic stocks in the National Pension Fund (rebalancing). However, committee members expressed that "further discussion is necessary," and ultimately decided to revisit the issue next month.

Lee Hyung-hoon, Director of the Pension Policy Bureau at the Ministry of Health and Welfare, told reporters immediately after the meeting, "We decided to reconsider the rule for maintaining the target ratio," adding, "Due to market volatility since last year, adjustments were deemed necessary, but the committee members believe more thorough review is required."

Director Lee stated, "There was broad consensus on the need for review, but committee members had diverse opinions regarding the timing and extent of adjustments. Since this involves revising the scope of allowable investment asset classes under the fund management rules, the opinion was to conduct more comprehensive research and review."

The Fund Committee discussed adjusting the allowable deviation range from the target ratio applied to domestic stock assets held by the National Pension Fund.

This year, the target holding ratio for domestic stocks by the National Pension Fund is 16.8%, with an allowable deviation range of ±5 percentage points from this target.

Deviations within this range are possible through Strategic Asset Allocation (SAA) and Tactical Asset Allocation (TAA). The Ministry of Health and Welfare and the National Pension Service proposed increasing the allowable range for SAA from the current ±2 percentage points to either ±3 percentage points or ±3.5 percentage points.

Since the total allowable range is maintained at ±5 percentage points, the TAA range would automatically decrease from the current ±3 percentage points to either ±2 percentage points or ±1.5 percentage points.

Raising the upper limit of the SAA could reduce the amount of stocks that need to be sold immediately to achieve the target holding ratio. Because the overall range remains '16.8% ±5%' at the end of this year, this does not imply an expansion of the National Pension Service's investment in domestic stocks.

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