NPS drifting without chief fund manager
National Pension Service Investment Management headquarters in Jeonju / Korea Times file
By Yoon Ja-young
The National Pension Service (NPS), which has the key mission of managing the retirement fund for the country's 21.2 million subscribers, is drifting as its chief fund managers are resigning.
According to the NPS, Cho In-sik, acting executive fund director and Chief investment officer (CIO) of the NPS Investment Management, recently offered to resign. Also, he did not participate in the National Pension Fund Management Committee meeting held in downtown Seoul Wednesday.
Cho, who was serving as head of the global public market, had been working as acting CIO following the sudden resignation of former CIO Kang Myoun-wook in July last year.
Cho didn't officially say why he is resigning. However, he allegedly received a warning from the HR committee for having criticized NPS staff members who helped the prosecution in its investigation over NPS support for the controversial merger between Samsung C&T and Cheil Industries back in 2015.
The NPS which manages the 635 trillion won fund has been showing signs of internal crisis as a number of key posts have been vacant for months.
The resignation of Cho will also leave the global public market without leadership. The team is in charge of investment into overseas equities, bonds, and foreign exchanges. The NPS is scheduled to increase the ratio of overseas equities to 30 percent of its investment portfolio by 2023.
Kim Jong-hee, head of domestic fixed income, is also currently serving as chief of domestic equity, as its former head Chae Jun-kyu, was dismissed following an internal audit. He allegedly led the NPS report based on which it supported the merger between Samsung C&T and Cheil Industries. The domestic equity team is in charge of domestic stock investment, research and portfolio management.
The global alternative team which invests in overseas infrastructure and real estate is also led by an acting head.
Not only key executives but also other managers are quitting. NPS had 30 fund managers quit in 2016, following the plan to move its office to Jeonju, North Jeolla Province, which compares with 2014 when only nine people quit. It also had 27 fund managers leave last year. It targeted hiring 38 in the first half of this year, but it ended up hiring only 20.
A series of resignations is leading to concern that the fund may not be managed properly.
“Without a CIO, it would be difficult for the NPS to make key decisions, such as making new investments. It is likely to only manage its previous investments,” an industry analyst said.
The investment return this year of the National Pension fund stood at mere 0.89 percent as of the end of April amid a sluggish stock market, which compares with 7.28 percent of 2017.