National Pension Service "Expecting Increased Korean Bond Yields with WGBI Inclusion"

WGBI, Performance Improvement Expected Due to Global Capital Inflow
Additional 460 Billion KRW Budget for 2024 Salary Payments
"Emphasizing Return Enhancement for 국민연금 Sustainability"

The National Pension Fund Management Committee held its 7th meeting of 2024 on the 22nd at the Government Seoul Office and reviewed and approved the "2024 National Pension Fund Management Plan Amendment." Additionally, a report was presented on the "Impact of Korea's Inclusion in the WGBI (World Government Bond Index) on the Domestic Bond Portfolio."

Minister of Health and Welfare Kyo-hong Cho (second from the right) is speaking at the National Pension Fund Management Committee. Provided by the Ministry of Health and Welfare.

The Fund Management Headquarters stated that approximately 75 trillion won (56 billion USD) of capital inflow is expected following Korea's inclusion in the WGBI, and an improvement in portfolio performance is anticipated due to rising domestic bond yields. The WGBI is a global bond index calculated by FTSE Russell, a subsidiary of the London Stock Exchange Group (LSEG). Inflows of global funds tracking this index are expected. Regarding this, the Fund Management Headquarters reported, "While maintaining the current management policy, we plan to strengthen our ability to respond to market shocks."

At the meeting, a plan to revise the 2024 National Pension benefit payment budget from 43.37 trillion won to 43.83 trillion won was approved. This reflects an additional budget of approximately 460 billion won to ensure smooth benefit payments.

Cho Kyu-hong, Minister of Health and Welfare, stated, "Improving returns is paramount for the sustainability of the National Pension. Although a high fund management performance of about 9% was achieved as of the end of September, thorough measures are necessary to prepare for increased uncertainties in the global financial market, such as geopolitical risks in the Middle East."