National Pension Service Halts 'Gender Bias' Board... Voting Rights Against Next Director Appointment

Guidelines Revised for National Pension Fund Trustee Responsibility Activities
Reflecting Capital Market Act Amendment on Board Gender Diversity
To Be Applied from March 2025 Shareholders' Meeting

The National Pension Fund Management Committee (Fund Committee) has decided to exercise voting rights against the appointment of the next director who is the chairperson of the board of directors in companies whose boards consist of only one specific gender.

On the 28th, the Fund Committee held the 2nd meeting of 2024 and deliberated and resolved the "Amendment to the Guidelines on the Fiduciary Responsibility Activities of the National Pension Fund" and the "Improvement Plan for the National Pension Loan Business (Emergency Retirement Funds, etc.)." In the former case, it reflects the amendment to the Capital Markets Act (2022), which requires publicly listed companies with total assets of 2 trillion won or more to avoid having boards composed entirely of one gender, into the criteria for exercising voting rights.

According to the amendment, the National Pension can oppose the appointment of the next director who is the chairperson of the committee within the board of directors that has the authority to recommend director candidates, for companies that violate the Capital Markets Act provisions related to gender diversity on the board. The amendment will apply from shareholder meetings held after March 2025. This means that if the board consists only of men or women, the appointment of the board chairperson will be opposed.

The "Improvement Plan for the National Pension Loan Business" changes the interest rate criteria applied to the emergency retirement fund loan business and the credit recovery support loan business. It will apply the lower interest rate between the 5-year maturity government bond yield and the deposit interest rate of commercial banks. This reduces the interest burden on loan users and expands the emergency retirement fund loan target to include basic livelihood security recipients among National Pension beneficiaries. Benefits can be received starting from July this year.

On the same day, the Fund Committee also received an interim report on the introduction plan of the "benchmark portfolio," which is an improvement task for fund management included in the 5th National Pension Comprehensive Operation Plan. The benchmark portfolio setting plan is expected to be finalized through the Fund Committee’s resolution in April. Follow-up tasks, such as establishing the strategic asset allocation plan for 2025?2029 linked to the benchmark portfolio, will continue to be discussed.