National Pension Fund Annual Return Hits 20%... All-Time High

78% Return Achieved Solely from Domestic Equities

The National Pension Service's investment return for this year is expected to reach a record high of 20%. This is attributed to solid performance in both domestic and overseas equities.

On December 30, the Ministry of Health and Welfare announced that the National Pension Fund's investment return for this year is projected to be around 20% based on preliminary figures for December. This is the highest figure since the system was introduced in 1988, surpassing last year's return of 15%.

This strong performance was mostly driven by domestic and overseas equities. According to the preliminary breakdown by asset class, returns were approximately 78% from domestic equities, 25% from overseas equities, 8% from alternative investments, 7% from overseas bonds, and 1% from domestic bonds. The final investment return, which will reflect the fair value assessment of alternative investments, is scheduled to be announced in February next year.

The record-high investment performance also led to an increase in the fund's size. As of the preliminary December figures, the National Pension Fund stood at 1,473 trillion won, up by about 260 trillion won (+21.4%) compared to the end of last year. This amount is approximately 5.9 times the pension benefit expenditure of 44 trillion won from last year.

The Ministry of Health and Welfare expects that if insurance premium income increases as a result of future adjustments to the premium rate, the fund's size will expand further, enabling more active asset management. A ministry official stated, "The government plans to further increase returns by improving the asset allocation system, such as the reference portfolio, and by expanding infrastructure, including professional management personnel, to achieve the return target (current long-term projection: 4.5% → target: 5.5%)."