"Expected 3600 Trillion Won in Reserves from Pension Reform... Fund Management Becomes More Important"

Resetting Target Rate of Return and Asset Allocation for the Next Five Years

Cho Kyu-hong, Minister of Health and Welfare, emphasized on the 17th, "We will actively support infrastructure expansion and other measures to diversify investments and improve returns of the National Pension Fund."

Health and Welfare Minister Cho Kyu-hong is attending and speaking at the 2025 National Pension Fund Management Committee held at the Government Seoul Office in Jongno-gu, Seoul on the 17th. 2024.4.17 Photo by Jo Yong-jun

At the '2nd National Pension Fund Management Committee (Fund Committee) meeting for 2025' held at the Government Seoul Office on the same day, Minister Cho said, "With the pension reform expected to increase the size of the fund, the role of fund management has become even more important." He mentioned, "If the pension reform raises the contribution rate to 13% and increases the fund's rate of return by 1 percentage point, the depletion point of the fund will be extended by 15 years from the current 2056 to a maximum of 2071, and the maximum accumulated size is expected to increase from 1,882 trillion won to over 3,600 trillion won."

Accordingly, the Fund Committee plans to reset the target rate of return and target proportions by asset class for the next five years. The 65% allocation to risk assets in the 'benchmark portfolio' introduced this year will also be taken into account. The status of the '2026-2030 Medium-term Asset Allocation Plan' was reported, and it will be approved at the next meeting. Specific figures will be determined by reflecting the International Monetary Fund (IMF) economic growth forecasts and other factors.

Minister Cho urged, "Given the increasing uncertainties in domestic and international financial markets, I ask the Fund Management Headquarters to closely respond to market changes and strive to manage fund returns stably."

Meanwhile, the Fund Committee received a report on the amendments to the National Pension Act promulgated on the 2nd and exchanged opinions on future discussion tasks. Minister Cho emphasized, "We will focus our capabilities on follow-up measures such as ▲revision of subordinate statutes and ▲strengthening communication with the public to ensure the amended National Pension Act is implemented smoothly."