The National Pension Service needs to be split to enhance the efficiency of the South Korean state pension fund’s operations and reduce its heavy reliance on local markets for investment returns, a parliamentary research report showed.
In a recent state affairs analysis report, the National Assembly Research Service proposed the country discuss the need to split the NPS into a few separate organizations to ensure higher returns from the assets it manages.
“The NPS, as a single entity, creates a problem in operating its fund, given that its assets are too large for the size of the local financial markets,” the parliamentary research arm said in the report.
The NPS is the world’s third-largest pension fund with 749 trillion won ($627 billion) in assets under management as of the end of May, following Japan’s Government Pension Investment Fund (GPIF) and the Norwegian state fund, the Government Pension Fund Global (GPFG).
The NPS, whose assets are expected to grow to some 1,000 trillion won by 2024, operates most of its funds through investment in local financial products