Please Do Not Kill Our National Pension

Editor-in-Chief Ryu Dae-hoon

wherearetacos@naver.com

 The National Pension Service is managing over 834 trillion KRW as of December, 2020. Their domestic stocks holding ratio have reached over 21%, which is equivalent to 176 trillion KRW. But originally, however, the maximum rate was 18.8%. To satisfy the regulation, the National Pension Service was mechanically selling off their stocks. Investors complained for months as this selling trend was creating a huge obstacle in this bullish market. Reflecting their opinions, the Korean National Pension Service Investment Management decided in April to allow themselves a higher rate of investing in domestic stocks.

 It is an extremely short-sighted decision. The National Pension Service has been making big profits with their strict rule, buying during the recession and selling during economic boom times. Their annual profit rates even exceeded private funds sometimes. However, the decision made the stock holding range fluctuate 1% wider in both up and down sides. It has forced them to sell less in booming periods and buy less in times of recession.

  Maintaining a large profit through the stock market is not the main problem. The National Pension Service has been reducing their stock rate since 2016. It has been doing so to secure capital to prepare for the enormous amount of pension disbursements in the future. According to the National Pension Service’s cycle analysis, the real problem of an aging society will start in 2030. In 2030, the number of people eligible to receive a pension will outnumber taxpayers. Deposits will start to decrease sharply from 2042 to 2057. In 2057, no pension deposits will be left.

 The pension service is well aware what they will face in the coming decades. They were on track to execute an exit strategy. However, this time, the policy-making authority became too sensitive to public opinion. The complaints and petitions forced them to reset it all and made it worse.

  We regarded the national pension to be granted for a long time. But as you can read now, it is no longer safe. National pension schemes should be managed for the nation. They should not be used as political leverage or just to comfort public opinion. Please do not dump the responsibility on to the next government and the next generation.