[Exclusive] "Can't Go as Far as Jeonju"... Popularity of National Pension Fund Management Staff Handling 1140 Trillion Won Plummets

2024 Competition Rate 3.47 to 1... Lowest Ever
Red Light on Workforce Supply and Demand
3040 Prioritizing Education and Childcare, 'National Pension Passing'
Seoul Relocation Debate Continues but Blocked by 'Political Barriers'

The National Pension Service (NPS), the largest institutional investor in South Korea managing 1,140 trillion won, is facing a "red light" in securing fund management personnel. This is due to the continuous departure of existing staff and the record-low competition rate for recruitment. Although the demand for personnel is increasing as the fund size surpasses 1,000 trillion won, the competition rate is declining.

According to the Public Institution Management Information System (ALIO) on the 26th, the average competition rate for the NPS's fund management recruitment from the 1st to 4th rounds this year was 3.47 to 1. An NPS official stated, "This year is the lowest since the fund was established in 1988." The competition rates for NPS recruitment were 7.22 to 1 in 2020, 4.38 to 1 in 2021, 3.83 to 1 in 2022, and 4.06 to 1 in 2023.

Competition Rate in Seoul Era 31 to 1 → Under-enrollment... Popularity 'Plummets'

The NPS conducted fund management recruitment four times this year and is currently accepting applications for the 5th round in 2024. Looking closer, the situation is even more serious. In the 2nd round, which planned to hire 28 people, only 61 applied, resulting in an average competition rate of 2.18 to 1?about two applicants competing for one position. For the financial settlement role, there were no applicants at all. There were also four roles (securities risk management, tax support, alternative asset management, next-generation fund system) where applicants existed but no one was selected. This was because there were no qualified candidates suitable for the NPS level. Ultimately, only 16 people, about half of the planned 28, were finally selected.

In the past, the NPS was quite popular in the investment industry. This was due to pride in working for a global "big player," the ease of job mobility by using a pension career as a stepping stone, and the stability of being able to continue working if there were no major issues despite being a contract position. Thanks to these merits, the competition rate once reached 31 to 1 in 2009. However, the atmosphere changed drastically after the decision to relocate from Seoul to Jeonju in 2016. The average competition rate before the move in 2015 was 15 to 1, but after the move, it has never exceeded 10 to 1. Recently, some current NPS fund managers have been moving to Korea Investment Corporation (KIC), which has an office in Myeongdong, Seoul.

Experts cite various reasons for the "NPS bypass," but many point to the inconvenience of working in Jeonju. Hong Chun-wook, CEO of Prism Investment Advisory and a former NPS fund manager, said, "Since people do not join just for the money, the lower treatment compared to the private sector alone cannot explain it. Being physically separated from Yeouido, the financial hub, limits networking opportunities with financial personnel, and realistically, those in their 30s and 40s who prioritize childcare and education find it difficult to accept working in Jeonju." The phrase "employment southern limit line" has even emerged, reflecting the widespread "regional aversion" in our society, and the NPS is no exception.

Existing Staff Departures... The Disappearing 'Investment Magicians'

The burden on existing staff is increasing. About 30 veterans leave every year. As of the end of September, the NPS fund management staff numbered 370, which is 56 fewer than the authorized 426 positions. The unusual five rounds of recruitment this year are due to chronic vacancies. The NPS's assets under management (AUM) total 1,140 trillion won, with an average of 3.1 trillion won managed per person. According to the Ministry of Health and Welfare's "Fund Management Infrastructure Improvement Plan" released last year, the per-person management scale is 300 billion won for Canada Pension Plan Investment Board (CPPI), 2.7 trillion won for Government Pension Fund Global (GPFG) of Norway, and 700 billion won for the Dutch pension fund (ABP). Compared to global peers, Korea's figure is the highest.

The NPS has consistently proposed solutions such as overseas training, MBA courses, overseas institution secondments, and abolishing minimum performance bonus requirements, but ultimately has not overcome the limitations of working in Jeonju. There have been ongoing discussions in the market about separating the fund management headquarters or splitting it to create a Seoul office. However, since this requires legal amendments and faces opposition from the Jeonbuk region, a politically sensitive issue, no concrete progress has been made. An industry insider said, "Many overseas pension funds have independent fund management headquarters. If the personnel issue is left as it is, it could impact pension reform efforts aimed at increasing the fund's long-term returns by 1 percentage point to slow pension depletion."