National Pension Class Action Lawsuit... Business Community Says "The Fire Is Not Out"

Government Influence at Work 'Concerns After the Presidential Election'
Could Continue Repeating Without Reform

At the end of last month, participants are speaking at the "Hyundai Development Company-Kakao-Emart Regular General Meeting of Shareholders National Pension Service's Shareholder Rights Exercise Urging Press Conference" held in front of the National Pension Service Chungjeongno building.

[Asia Economy Reporter Choi Dae-yeol] Although the government’s proposed amendment to the National Pension Service (NPS) representative lawsuit has effectively entered the withdrawal process, the business community is not entirely relieved. There remains a possibility that it could be pushed again depending on the government’s will. The controversial guidelines were promoted amid insufficient communication between the relevant ministries and stakeholders around the time the amendment was introduced in December last year, raising concerns among business circles that similar situations could arise in the future.

On the 9th, Yoo Jeong-ju, head of the Corporate System Team at the Federation of Korean Industries, said, "Even if the current government steps back, concerns about the NPS representative lawsuit will continue under the next administration," adding, "Unless the NPS organization and governance, which are inevitably influenced by government pressure, are reformed, this issue could keep recurring." Son Seok-ho, head of the Social Policy Team at the Korea Employers Federation, noted, "There is a consensus among ex officio government members that this matter should be approached with greater caution."

The business community has long argued that the amendment to the guidelines improperly delegates authority and that the revision process should be halted. Their reason is that it is unjustifiable for the Decision-Making Committee (수책위) to exclusively handle the authority over NPS representative lawsuits instead of the Fund Management Headquarters. Since virtually all decisions related to business activities could become targets of lawsuits, companies claim that transferring this authority to the Decision-Making Committee could cause significant disruptions to management.

Currently, the NPS holds more than 5% equity in a total of 261 domestic KOSPI and KOSDAQ listed companies. Among these, the NPS is the largest shareholder in 9 companies and the second-largest shareholder in 208 companies. There are also 48 companies in which the NPS holds more than 10% equity.

Companies also oppose the excessive filing of lawsuits because it could harm not only pension funds and businesses but also the general public who are pension subscribers. Last month, seven employer organizations, including the Korea Employers Federation, issued a statement calling for a suspension of the guideline amendments and for clear legal provisions regarding the procedures and entities involved in NPS representative lawsuits.

As of October last year, the NPS fund size was 917.8 trillion won, with domestic stock investments accounting for 17.9%, or 163.9 trillion won. The NPS’s share in the domestic stock market reaches 6.7%.

Yoo emphasized, "If authority is transferred to the Decision-Making Committee, it will be a loss for companies and ultimately a loss for the NPS, whose purpose is to secure the public’s retirement," adding, "Even if this is reconsidered, it should be approached cautiously after reforming and restructuring the NPS." An industry insider expressed concern, saying, "Since the amendment has many unreasonable aspects, the ongoing exhausting controversy itself is a burden," and "Although the transfer of representative lawsuit authority has been nullified, there is a possibility it will be pursued again, so we cannot be fully reassured."

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