[Asia Economy Reporter Ji-hwan Park] The National Pension Service held its first Fund Management Committee meeting of the year and began work on forming specialized committees, including assigning full-time committee members.
Cho Heung-sik, President of the Korea Institute for Health and Social Affairs and Vice Chairman of the National Pension Fund Committee, stated at the National Pension Fund Management Committee meeting held on the morning of the 5th at The Plaza Hotel in Jung-gu, Seoul, "We plan to approve the amendment to the fund management guidelines, which is one of the follow-up measures to the fund management operation improvement plan reported to the committee last year." He added, "We intend to discuss how to operate the specialized fund management committees and specify the necessary details in the guidelines."
On this day, the Fund Committee pushed for the approval of amendments to the National Pension Fund management guidelines. This is based on the need to establish a more professional and independent National Pension Fund management system following the introduction of the Stewardship Code principles on July 2018.
The main content of this amendment is to codify the basis for specialized committees in the enforcement decree and appoint private experts recommended by subscriber organizations as full-time specialized committee members. The legislated specialized committees will be established as three groups: △Investment Policy Specialized Committee △Stewardship Responsibility Specialized Committee △Risk Management and Performance Assurance Specialized Committee. Each committee will have nine specialized members composed of three full-time specialized members, three private experts, and three members from the Fund Management Committee.
Full-time specialized members are appointed from private experts with more than five years of experience in finance, economics, asset management, law, or pension systems, recommended one each by subscriber organizations (workers, employers, regional subscribers) of the National Pension. Notably, each full-time member will serve as the chairperson of one of the three specialized committees.
However, the Stewardship Responsibility Specialized Committee may have up to six private experts to ensure that the National Pension’s shareholder activities are decided more transparently and independently.
Vice Chairman Cho said, "It is expected to create a new fund management system that makes professional and independent decisions regarding fund management."
At the meeting, the Fund Committee also received a report on the allocation of active risk by asset class by the Fund Management Headquarters according to the additional return targets set for this year, which were decided last year.
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