The National Pension Fund Management Committee decided to increase the performance bonuses given to operators to enhance the revenue of the fund.
On the 20th, the fund committee held its first meeting of 2025 at the Government Seoul Building in Gwanghwamun, Seoul, and voted on a revision of the performance evaluation compensation guidelines for the National Pension Fund. The fund committee is the highest decision-making body regarding the management of the National Pension Fund.
The fund committee plans to adjust the amount that serves as the performance bonus payment criterion upward to ensure appropriate compensation for operators at the National Pension Fund Management Headquarters. The goal is to provide sufficient compensation to outstanding operating personnel to enhance the long-term performance of the National Pension Fund.
At the meeting, the fund committee also received a report on the status of National Pension Fund management as of the end of December 2024. The fund management revenue from the previous year reached 15.00% (15.32% in the institutional sector), marking the highest level since 2000. The revenue from fund management amounts to 159 trillion won, which is 3.6 times the 44 trillion won in benefit payments planned for 2024. The net worth of the National Pension Fund stands at 1,212 trillion won.
Commissioners of the fund committee requested diversification of investments to improve revenue, as the benchmark portfolio will be implemented and applied from this year. The benchmark portfolio is a hypothetical portfolio created from a combination of risky assets like stocks and safe assets like bonds.
Whereas the existing Strategic Asset Allocation (SAA) presents target values for each asset and measures performance individually against benchmarks, the benchmark portfolio allows for a more comprehensive perspective, adjusting the proportion of investment assets flexibly according to market conditions without regard to divisions between assets.
For instance, the National Pension Fund has invested with a composition of 40% private equity, 30% real estate, and 30% infrastructure in the alternative investment sector. However, with the introduction of the benchmark portfolio, there is no longer a need to rigidly adhere to these ratios. This implies a more flexible investment decision-making process. According to an analysis by the National Assembly Budget Office, boosting the National Pension Fund's management revenue by just 1 percentage point (P) could delay the fund's depletion by about six years.