National Pension Service to Increase Domestic Equity Investment Ratio from 14.4% to 14.9%

Portfolio Reviewed and Improved at Committee Meeting
Target Allocation for Overseas Equities Adjusted from 38.9% to 37.2%
Temporary Suspension of Asset Allocation Rebalancing

The National Pension Service has decided to increase its domestic equity investment ratio from 14.4% to 14.9% this year.

On January 26, the National Pension Fund Management Committee held its first meeting of 2026 at the Government Seoul Office and deliberated and approved the "National Pension Fund Portfolio Improvement Plan," which includes these changes.

Increasing Target Allocation for Domestic Equities, Reducing Overseas Equities

Jung Eunkyung, Minister of Health and Welfare, is attending and speaking at the 1st National Pension Fund Management Committee meeting of 2026 held at the Government Seoul Office in Jongno-gu, Seoul on the 26th.

The committee decided to revise this year's target portfolio, taking into account the increased burden of foreign currency procurement due to the expansion of the fund size and the current foreign exchange market environment.

Accordingly, the National Pension Service's target allocation for domestic equities will be increased by 0.5 percentage points, from the originally planned 14.4% to 14.9%.

Previously, the National Pension Service had planned to reduce the domestic equity ratio by 0.5 percentage points each year, aiming to lower it to 13% by the end of 2029. However, contrary to the previous plan, the ratio will remain at 14.9% in 2026, the same as the previous year (2025).

This year, the target allocation for overseas equities will be adjusted from the initially planned 38.9% to 37.2%.

The committee explained, "We decided to revise the target portfolio in the 2026 fund management plan, considering the increased foreign currency procurement burden due to the fund's expansion and the recent demand-driven foreign exchange market environment. This decision comprehensively considered the impact on the fund's returns and the existing fund management direction."

Temporary Suspension of 'Rebalancing' When Asset Class Targets Deviate

Jung Eunkyung, Minister of Health and Welfare, is attending and speaking at the 1st National Pension Fund Management Committee meeting of 2026 held at the Government Seoul Office in Jongno-gu, Seoul on the 26th.

In addition, the committee will temporarily suspend 'rebalancing,' which involves adjusting asset allocations to stay within the permissible range when they deviate from their targets.

The National Pension Service invests the fund in a variety of assets, including domestic and overseas equities, bonds, and real estate. The overall portfolio sets target allocations for each asset, and permissible deviation ranges are also established to account for market fluctuations.

This decision was made out of concern that, given the recent increase in the domestic equity ratio above its target and heightened market volatility, continued rebalancing could have an excessive impact on the market.

The committee explained, "Due to the fund's rapid expansion driven by strong performance in recent years, the impact of rebalancing on the market has grown. In addition, the domestic stock and foreign exchange markets have experienced significant short-term changes, making it difficult to clearly assess market conditions and determine appropriate strategic asset allocation ranges."

The committee will continue to regularly review the permissible deviation ranges and make adjustments as needed.

Minister of Health and Welfare Jung Eunkyung stated, "The National Pension Service has achieved record-breaking results for three consecutive years since 2023, leading to a significant increase in the fund size and a greater impact on the market, making this a critical time for review. While operating the National Pension Service to faithfully fulfill its purpose of securing retirement income for the public, we will also manage its market impact."

Meanwhile, the Fund Management Committee is the highest decision-making body that deliberates and approves major matters related to the management of the National Pension Fund. The committee is chaired by the Minister of Health and Welfare and includes officials from relevant ministries, as well as representatives of employers, employees, and regional subscribers.

Typically, the first meeting is held in February or March each year to review the previous year's settlement, but this year, the meeting was unusually convened in January before the settlement was completed. This is the first time in five years since 2021 that such an early meeting has been held.