Korea’s National Pension Service (NPS) will increase the limit on allocations to domestic stocks from the current 14.9% to 20.8% of total assets by next year to bolster long-term returns.
The decision was made during the pension giant’s fund management committeemeeting on May 28 that was broadcast live.
Jeong Eun-kyeong, South Korea’s health and welfare minister, whose ministry supervises the NPS, explained that the move is to alleviate pressure on the pension fund to divest Korean stocks amid the stock market surge this year.
The benchmark KOSPI Index has jumped almost 100% thus far this year driven by artificial intelligence and semiconductor companies.
During the meeting, the NPS committee also disclosed that the pension fund’s three-year asset allocation framework that starts in 2027 has a strategic plan that allows for greater flexibility in Korean stock holdings within a range of plus or minus three percentage points.
“This adjustment is intended to enhance the long‑term profits and stability of the fund, while mitigating market impact from rebalancing,” Jeong said.
She added that the committee will continue to monitor market conditions and re-examine the strategic asset allocation range by the end of this year.
The NPS is the world’s third largest pension fund, with around 1,610 trillion won (US$1.08 trillion) of assets.
