Minister Cho Kyu-hong: "Last Year's National Pension Fund Return Rate Minus 8%"

"Rationalizing the Compensation Level of Operational Personnel to Align with Market Conditions"

Minister of Health and Welfare Cho Kyu-hong is attending the '1st National Pension Fund Management Committee' held at the President Hotel in Jung-gu, Seoul on the 7th. Photo by Kang Jin-hyung aymsdream@

On the 7th, Cho Kyu-hong, Minister of Health and Welfare, announced at the 2023 1st National Pension Fund Management Committee held at the President Hotel in Jung-gu, Seoul, that "last year, the National Pension Fund recorded a poor return rate of minus (-) 8%."

Minister Cho stated, "Last year, the global financial market faced a difficult investment environment with sharp inflation and tightening by major central banks, causing both stock and bond returns to decline," and added, "Major global pension funds also generally recorded poor returns."

Minister Cho said, "Although the return rate showed some recovery in February this year, multifaceted efforts are needed for future generations," and added, "The government will seek various measures to improve fund returns, such as rationalizing the compensation level of fund management personnel according to market conditions to secure excellent talent, and establishing smooth information exchange and networks with financial markets and asset management companies."

On this day, the Fund Management Committee discussed the 2022 National Pension Fund settlement, amendments to the guidelines on fiduciary responsibility activities, and amendments to the operating regulations of the fiduciary responsibility expert committee.

First, the 2022 National Pension Fund settlement, which is an agenda item for resolution, is a report that prepares the fund's income, expenditure, and financial statements, and is finalized after audit by the Board of Audit and Inspection and review by the National Assembly.

As a result of the 2022 settlement, the net assets of the National Pension Fund amounted to approximately KRW 890.4 trillion, a decrease of about KRW 58 trillion compared to the end of the previous year. This was due to a sharp decline in investment asset valuation gains last year.

The amendment to the guidelines on fiduciary responsibility activities was decided to be further discussed by forming a subcommittee at the 1st Fund Committee meeting in February 2022 for matters requiring additional discussion.

The results of the subcommittee were reported on this day, and the corresponding amendment to the guidelines is scheduled to be reviewed and resolved.

The amendment to the operating regulations of the fiduciary responsibility expert committee involves changes to the composition of the committee members.

Additionally, the committee is scheduled to receive a report on the results of the allocation of target active risk by asset class by the Fund Management Headquarters for the 2023 target excess return, which was approved by the Fund Management Committee last December.

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