NPS sees 14 investment managers resign by end-June

57% of the resignees managed overseas and alternative assets; the turnover could hurt the stability of its long-term investment plans

National Pension Service (NPS) Investment Management in Jeonju, Korea

Tae-Ho Lee 1

2022-07-08 17:32:07 thlee@hankyung.com

Pension funds

National Pension Service (NPS) of South Korea sees as many as 14 professionals of its investment management arm resign by end-June of this year, according to a report the pension fund submitted Kang Sun-woo, a Korean politician of the main opposition Democratic Party.

The report on Friday said 14 employees at the NPS’ investment management arm have resigned from January 1 to June 23 of this year, four more resignees compared with the same period of 2021. Last year, a total of 25 employees left the investment management arm. Between 2017 and 2021, 28 employees on average resigned from the investment management arm every year.

Eight out of the 14 resignees until June 23 are known to have worked for overseas and alternative investments. Most of the former employees, including some team heads, are said to have moved to the private asset management industry.

A main reason for the turnover is that NPS’ investment management is located in Jeonju, 240 kilometers south of Seoul, which makes the employees’ external networking and development of investment ideas difficult. The world's third-largest pension fund moved the investment management arm to the city of North Jeolla Province in 2017, following so-called a well-balanced regional development strategy.

Meanwhile, NPS is struggling with its asset management as the number of pension recipients is growing fast due to the soaring aging population. The pension fund’s total assets reached 918.2 trillion won ($704.7 billion) as of end-February; the assets are expected to steadily increase to 1.07 quadrillion won until 2038 and will decline from 2039. This means NPS needs stability in investment management with long-term plans.

In May, the pension fund adjusted its five-year asset allocation plan to enhance investment return and minimize its impact on the overall Korean stock market. It plans to reduce its domestic public equity proportion to 14% and domestic public bond proportion to 22.9% by end-2027. On the other hand, it will increase the overseas public bond proportion to 40.3% by end-2027, NPS announced at the time.

Write to Tae-Ho Lee at thlee@hankyung.com
Jihyun Kim edited this article.