[2022 National Audit] Ko Young-in: "National Pension Fund Must Develop Investment Plans for Public Medical Infrastructure Expansion Including Public Hospitals"

National Pension Fund Paid Approximately 10 Trillion Won in External Outsourcing Fees Over the Past 10 Years

Go Young-in, Member of the Democratic Party of Korea

(Source: Office of Go Young-in, Democratic Party of Korea)

[Asia Economy Reporter Koo Chae-eun] It has been revealed that the National Pension Fund has paid approximately 10 trillion KRW in external management fees to outsourced external management companies over the past decade. Since the outsourcing fees exceeded 1 trillion KRW in 2017, they have increased every year, surpassing 1.4 trillion KRW as of 2021.

According to data submitted by the National Pension Service to Go Young-in, a member of the National Assembly’s Health and Welfare Committee from the Democratic Party of Korea, as of the end of July 2022, the National Pension Fund totaled 915.9 trillion KRW, with financial investments accounting for 915 trillion KRW (99.9%). Of this, about 48%, approximately 430 trillion KRW, is managed by external outsourced management companies.

Furthermore, from 2012 to 2020, the external management fees paid by the National Pension Fund to outsourced management companies amounted to about 8.4 trillion KRW, and when including the estimated 1.4 trillion KRW for 2021, the total is estimated to exceed 10 trillion KRW.

However, despite paying astronomical external management fees exceeding 10 trillion KRW, the National Pension Fund has been reluctant to invest in the public sector, as stipulated in Article 102 (Management and Operation of the Fund) of the National Pension Act.

In response to a written inquiry from Assemblyman Go Young-in asking the National Pension Service whether it has ever internally reviewed investments in public medical infrastructure such as public hospitals, the National Pension Service replied that it has “never reviewed such investments.”

Regarding this, Assemblyman Go Young-in pointed out at the National Pension Service’s audit held on the 11th, “Although Article 102 of the National Pension Act clearly states investment in the public sector for public projects, the fact that it has never been reviewed is a serious issue that disregards the fundamental purpose of the National Pension Fund.” He added, “This is not to say that external outsourcing should be stopped, but it is time to reduce the scale and fees of external outsourced investments, which are incurring astronomical fees, and to seek ways to expand investments in public welfare improvements such as the expansion of public hospitals that provide tangible benefits to the lives of the people.”

In response to these criticisms, Kim Tae-hyun, the President of the National Pension Service, replied, “We will consult with the Ministry of Health and Welfare to find concrete measures.”

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