The Era of 1,000 Trillion Won in the National Pension Fund

The National Pension Service, which manages the national retirement funds, has entered the era of a 1,000 trillion won fund. This is the result of achieving a record-high return rate of over 13% and fund earnings exceeding 120 trillion won last year.

On the 28th, Cho Dong-chul, President of the Korea Development Institute (acting chairman), announced at the 1st National Pension Fund Management Committee held at the Government Seoul Office that the total size of the National Pension Fund, combining financial and welfare assets as of the end of 2023, has surpassed 1,000 trillion won.

Last year, the National Pension Service achieved a record-high return rate of 13.59% since the establishment of the Fund Management Headquarters within the corporation. The investment returns from stocks and bonds improved sharply last year, resulting in an all-time high annual profit of 126 trillion won in 35 years.

As of the end of the year before last, the National Pension Fund size was only 890.466 trillion won. In the second half of last year, the fund fluctuated around the 1,000 trillion won mark, briefly exceeding 1,000 trillion won in September, then dropping to 968 trillion won by the end of October due to the global stock market decline. However, from November to the end of the year, the global stock market rebounded amid growing expectations of interest rate cuts, pushing the fund size back over 1,000 trillion won by year-end.

Accordingly, although the National Pension Service recorded a -8.2% return rate and an evaluation loss of about 80 trillion won the year before last, it fully recovered this loss and earned an additional profit exceeding 40 trillion won. This year’s investment earnings of over 100 trillion won are more than 30 trillion won higher than the record high of 91.2 trillion won in 2021.

The highest return rate of the National Pension Service until now was 11.31% in 2019. Since the establishment of the Fund Management Headquarters, double-digit returns were achieved in 2009 (10.39%), 2010 (10.37%), 2019 (11.31%), 2021 (10.77%), and this year, marking the fifth time. This is the first time annual fund earnings have exceeded 100 trillion won.

Established in 1988, the National Pension Service is considered one of the world’s top three pension funds. The only funds larger than the National Pension Fund as of the end of June last year are Japan’s Government Pension Investment Fund (GPIF, 1,997 trillion won) and Norway’s Government Pension Fund Global (NBIM, 1,885 trillion won).

Meanwhile, the government plans to award medals and other honors to about 20 executives and employees of the Fund Management Headquarters next month.