National Pension Service Must Protect Investment Independence and Contributors’ Long-Term Interests

Whenever the stock market wavers, attention turns to the role of the National Pension Service. As a major player in the domestic stock market, there are growing expectations that it should buy stocks to stabilize the market. But what the National Pension Service, which manages the public’s retirement funds, must prioritize is the long-term interests of its subscribers. Supporting stock prices in the moment must not become the purpose of fund management.

The National Pension Service is financed through insurance premiums that citizens are required to pay. Subscribers entrust the National Pension Service with managing their money and deciding where to invest it. That makes the responsibility of the managing institution all the heavier. Funds must be managed with attention to profitability and stability. The government’s policy goals cannot take precedence over that purpose.

What is needed is diversification and rebalancing. Investing across multiple assets can reduce the impact that a decline in the price of any one asset has on the fund as a whole. Rebalancing—reducing some exposure to assets whose share has grown because of stock price increases and supplementing other assets—prevents risk from becoming concentrated on one side.

Adjusting asset allocations and managing risk provide the foundation for sustaining long-term investment even amid market volatility. By steadily accumulating investment performance without being shaken by short-term fluctuations, it becomes possible to pursue higher returns over the long term through the effects of compounding.

Trust in the National Pension Service also comes from consistency in its management standards. If those standards change frequently depending on market sentiment, subscribers will find it difficult to know by what principles their retirement funds are being managed. It is important to establish investment standards by analyzing the value and risk of assets and to manage them consistently.

The controversy over the National Pension Service’s delay of domestic stock rebalancing and increase in its target allocation is also a matter of principle. Investment strategy can be adjusted depending on market conditions. However, it is necessary to distinguish whether such decisions are based on an analysis of returns and risk, or influenced by the government’s stock market support stance and political demands.

In particular, we should be wary of market expectations turning into political demands and hardening into pressure on fund management. If, in a rising market, there are demands not to sell stocks, and in a falling market, demands to buy more, it becomes difficult to maintain planned allocations. If such demands are repeated, external reactions will be considered before investment value. The resulting risk is ultimately borne by subscribers.

Trust in the National Pension Service also comes from consistency in its management standards. If those standards change frequently depending on market sentiment, subscribers will find it difficult to know by what principles their retirement funds are being managed. It is important to establish investment standards by analyzing the value and risk of assets, to avoid being swayed by short-term market sentiment, and to manage them consistently.

A system and accountability framework that guarantees professional judgment is also necessary. The appointment and evaluation of investment personnel should be centered on expertise and long-term performance. The government should supervise whether principles and procedures have been followed, while individual investment decisions should be made under the authority and responsibility of experts. If asset allocation standards are changed or rebalancing is delayed, the basis for those decisions and the details of the risk review should also be explained sufficiently.

Preparing for the public’s retirement requires a far longer time horizon than that. Stock prices rise and fall. Rather than expanding the role of the National Pension Service according to short-term market conditions and political needs, it should remain faithful to its original purpose. The more the market wavers, the more the independence of fund management must be respected, and the National Pension Service must protect the long-term interests of its subscribers.

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Original title: 국민연금, 운용 독립성과 가입자의 장기 이익 지켜야

Author: Ho-gyeong Lee

Date: 2026-10-20

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=press&pn=1&idx=29645