The National Pension Fund Management Center in Jeonju, North Jeolla Province (photo courtesy of the National Pension Service).
SEOUL, Nov. 6 (Korea Bizwire) — South Korea’s National Pension Service (NPS) will overhaul its 1,200 trillion won (US$905 billion) investment governance structure to enhance the professionalism and agility of how the world’s third-largest pension fund manages its growing assets.
Under the new system, the NPS will split its single Investment Committee into two separate bodies — one dedicated to public assets such as stocks and bonds, and another overseeing private assets including real estate, infrastructure, and private equity.
The reform, the fund said Thursday, is aimed at increasing efficiency and expertise by tailoring decision-making to the very different nature of its investments.
As of June 2025, the NPS manages 1,269 trillion won in assets, a figure that has ballooned to a scale where the current one-committee structure is widely seen as outdated. Public assets require fast, tactical responses to volatile market shifts, while private investments demand long-term strategies based on complex value assessments.
The “Public Asset Investment Committee” will focus on market-sensitive securities, while the “Private Asset Investment Committee” will specialize in alternative investments that rely on in-depth analysis and patience. The NPS described the restructuring as separating “the sprinter from the marathoner” — each requiring a different form of management discipline.
The National Pension Service (Image courtesy of Yonhap)
The reform aligns with global best practices already adopted by major pension funds in Canada, the Netherlands, and Australia.
The NPS also plans a full-scale review of its investment framework through a professional consulting project set to begin later this year. The review will assess long-term portfolio composition and suggest ways to strengthen performance and risk management.
The fund has been implementing new strategies such as its benchmark portfolio model — allocating 65 percent to risk assets and 35 percent to safe assets — and adopting “smart beta” approaches to diversify returns.
Despite global financial uncertainty and U.S. trade tensions, the NPS achieved a 4.08 percent return, or 49.8 trillion won in gains, in the first half of this year. Since its inception in 1988, the fund has generated an average annual return of 6.54 percent, accumulating 787.5 trillion won in investment profits — equivalent to 62 percent of its total assets.
Officials say the overhaul marks a turning point in modernizing the management of Korea’s pension reserves, ensuring the long-term stability of retirement savings for millions of citizens.
M. H. Lee (mhlee@koreabizwire.com)
