By Bae Ji-sook
Staff Reporter
The government and the ruling Grand National Party (GNP) have reached a consensus to entrust the management of the National Pension Fund to private experts to maximize investment return.
Opposition parties and civic groups criticized the move, claiming it will heighten risks for the fund.
The government plans to convert the National Pension's fund management team into an independent corporation. It will also form a top decision-making committee comprised of professionals, replacing the existing fund management committee of the National Pension.
The governing camp plans to revise the pension law to put the plan into practice. The revision bill will be submitted to the National Assembly next month. The National Pension has 250 trillion won (about $240 billion) in assets.
The Ministry of Health, Welfare and Family Affairs said it will take all follow-up steps to reduce risks associated with the privatization plan. It said the fund investment council will be in full charge of managing the fund.
A GNP official said that the revision is to generate more investment gains from the fund, which is often blamed for inefficient management and passive investment. The national pension is expected to be depleted by 2060 due to declining premium income against growing payout to subscribers.
President Lee Myung-bak is backing the plan. He expects the fund to more than double its return to 10 percent through professional management.
However, opponents claim the pension is for elderly people to make a living after retirement and shouldn't be thrown at risky businesses.
``The Lee administration is trying to give up the role of the state at this time of global financial crisis,'' the largest opposition Democratic Party said.
The nation's two largest umbrella unions Korean Confederation of Trade Unions said, ``The National Pension already recorded a 5 trillion won investment loss in the first half of the year. The money is for all ordinary citizens and should be invested in safe way.''