] Korea’s National Pension Service, which manages the world’s third-largest pension fund by assets, should spin off its fund management unit into a separate public company, its chief executive said Monday.
“In my personal opinion, it is necessary that the unit should be separated,” Moon Hyung-pyo, CEO and Chairman of the NPS, said at a parliamentary audit.
The Ministry of Health and Welfare floated the initial spin-off idea in July last year to boost profits of the 541 trillion won fund. The Ministry of Strategy and Finance had also echoed the Welfare Ministry’s spin-off plan. However, the proposal faced strong protest by opposition parties and civic groups, who demanded status quo for a stable management of the fund.
National Pension Service Chairman Moon Hyung-pyo
The annual return of the fund has declined in recent years from 5.2 percent in 2014 to 4.6 percent in 2015. As of July this year, the annual return was down further to 3.8 percent.
Asked by Rep. Jeon Hye-sook of The Minjoo Party of Korea whether the fund management unit should be placed under the Finance Ministry, Moon said he was vehemently opposed to it.
“Even if the fund management unit leaves the NPS, it should remain under the Health and Welfare Ministry because the fund, which is Korean people‘s assets for their post-retirement life, should be managed at a stable level,” Moon said.
The NPS’ fund management office, currently located in Seoul, plans to join the head office of NPS in Jeonju, North Jeolla Province, in February next year.
By Kim Yoon-mi/ The Korea Herald (email@example.com