By Lee Kyung-min
National Pension Service (NPS) Chairman Choi Kwang offered to resign Tuesday amid an intensifying power struggle with the health ministry over personnel issues.
The resignation comes about two weeks after the dispute between the two organizations over the reappointment of the NPS' chief investment officer (CIO) Hong Wan-seon.
According to the Ministry of Health and Welfare, Choi tendered his resignation to the ministry in the morning.
Choi and the ministry have argued over Hong, whose two-year term is set to end on Nov. 3.
Earlier this month, Choi told Hong that there would be no reappointment and he should leave after the term. But the ministry said the decision was void because Choi had not sought the ministry's approval in advance. It also urged Choi to take responsibility for the row and resign.
In response, Choi said he did not need approval because such approval is required only for the new appointment of a CIO, not a reappointment, which he claimed was at his discretion.
While Hong has competently managed the 500 trillion won ($441 billion) state fund for the last two years, Choi said he needs a specialist to increase profits.
Sources said that Choi and Hong had been at odds over the management of the fund since Hong took the CIO post in November 2013, as Choi demanded he submit every investment decision to him, contrary to the institution's custom that a CIO makes decisions without approval from the chairman, to help guarantee the objectivity of the investments.
The conflict deepened over the right to find different profit sources rather than the usual investment in bonds and stocks. Hong finally called for the setting up of an independent institution devoted only to managing the fund in order to block the chairman's influence-peddling.
Although the ministry has pressured Choi to resign, he said until Monday he would keep the post, and said that he would appoint a new CIO. But the ministry said Monday that it would inspect the NPS to prevent such conflicts between the chairman and the CIO and to improve its management system, and then Choi stepped down.
As Health Minister Chung Chin-youb earlier called for both Choi and Hong to take full responsibility, Hong is also expected to resign.
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| Choi Kwang |
The resignation comes about two weeks after the dispute between the two organizations over the reappointment of the NPS' chief investment officer (CIO) Hong Wan-seon.
According to the Ministry of Health and Welfare, Choi tendered his resignation to the ministry in the morning.
Choi and the ministry have argued over Hong, whose two-year term is set to end on Nov. 3.
Earlier this month, Choi told Hong that there would be no reappointment and he should leave after the term. But the ministry said the decision was void because Choi had not sought the ministry's approval in advance. It also urged Choi to take responsibility for the row and resign.
In response, Choi said he did not need approval because such approval is required only for the new appointment of a CIO, not a reappointment, which he claimed was at his discretion.
While Hong has competently managed the 500 trillion won ($441 billion) state fund for the last two years, Choi said he needs a specialist to increase profits.
Sources said that Choi and Hong had been at odds over the management of the fund since Hong took the CIO post in November 2013, as Choi demanded he submit every investment decision to him, contrary to the institution's custom that a CIO makes decisions without approval from the chairman, to help guarantee the objectivity of the investments.
The conflict deepened over the right to find different profit sources rather than the usual investment in bonds and stocks. Hong finally called for the setting up of an independent institution devoted only to managing the fund in order to block the chairman's influence-peddling.
Although the ministry has pressured Choi to resign, he said until Monday he would keep the post, and said that he would appoint a new CIO. But the ministry said Monday that it would inspect the NPS to prevent such conflicts between the chairman and the CIO and to improve its management system, and then Choi stepped down.
As Health Minister Chung Chin-youb earlier called for both Choi and Hong to take full responsibility, Hong is also expected to resign.
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