Pension Action: "Yoon Government Downgrades Fiduciary Responsibility Activities to Bureaucratic Control"

The Public Pension Strengthening National Action held a protest on the 7th at the National Pension Fund Management Committee event held at the President Hotel in Jung-gu, Seoul, stating, "The government has appointed a former prosecutor as a full-time member of the National Pension Fund Management Committee and is delaying the appointment of labor-recommended personnel."

The Public Pension Strengthening National Action, which includes 306 civic groups such as People’s Solidarity for Participatory Democracy, the Korean Confederation of Trade Unions, and the Federation of Korean Trade Unions, stated, "The Yoon Seok-yeol administration is attempting to worsen the National Pension Fund."

The Pension Action said, "They have downgraded fiduciary responsibility activities to government control and appointed a former prosecutor specializing in corporate crime as a full-time expert member of the fund," and claimed, "They are pushing to worsen fund governance to align with capital market interests."

They continued, "The Stewardship Code and fiduciary responsibility activities were introduced to improve the long-term profitability of the National Pension and enhance the transparency and fairness of shareholder rights exercise," adding, "The recent actions of the Yoon Seok-yeol administration ahead of corporate general meetings such as KT’s cannot be free from criticism that they are a downgrade to government control, contrary to these intentions."

The Pension Action mentioned, "To prevent a recurrence of the Samsung C&T merger state manipulation incident that occurred during the Park Geun-hye administration, the National Pension Act was amended to introduce the Fiduciary Responsibility Expert Committee," but "the Yoon Seok-yeol administration appointed a former prosecutor who advocates nullifying the impeachment of former President Park Geun-hye as the full-time expert member who acts as the chairperson of that committee."

They also argued, "It is problematic that the so-called prosecutor regime occupies all key positions, but it is an even bigger issue to place a person with completely opposing values to the fiduciary responsibility committee?who published a thesis expressing disbelief in the guilty verdicts of former Minister of Health and Welfare Moon Hyung-pyo and former Fund Headquarters Director Hong Wan-seon in the state manipulation case, and who claims that the National Pension Service must follow the Welfare Ministry’s instructions, contradicting the fund’s independence."

They added, "While the Yoon Seok-yeol administration swiftly appoints former prosecutors as full-time expert members, it continuously delays the appointment of labor-recommended members," and "The appointments of labor-recommended members to the Real Performance Committee and the Fiduciary Responsibility Committee are also being refused or delayed."

In particular, they emphasized, "Although it is the general meeting season, the Fiduciary Responsibility Expert Committee has not convened," and "Instead, the Yoon Seok-yeol administration plans to change the committee’s composition to be more biased and discuss sensitive general meeting issues within the committee."

The Pension Action stated, "At this Fund Committee meeting, they plan to worsen the personnel composition of the Fiduciary Responsibility Expert Committee by receiving recommendations from groups biased toward capital and management, such as the Korea Capital Market Institute, and the administration will select and appoint members," adding, "This is effectively an attempt to dominate the committee with a small number of employers, conglomerates, and regime affiliates."

The Fund Management Committee is the highest decision-making body of the National Pension. There are three expert committees: the Investment Policy Expert Committee, the Fiduciary Responsibility Expert Committee, and the Risk Management and Performance Compensation Expert Committee. Three full-time expert members recommended by subscriber groups (employers, workers, and regional subscribers) serve commonly on each committee.

Among the full-time expert members, the reappointment of the regional subscriber-recommended member has been decided. On the 24th of last month, Han Seok-hoon, a former prosecutor and senior lawyer at Law Firm Woori, was appointed as the employer representative, but the worker group’s recommended member has not yet been appointed.