National Pension Fund Gains Boost from Semiconductor Rally, Depletion Date Pushed Back by Up to 7 Years

Recent gains in the domestic stock market have led to high investment returns for the National Pension Service (NPS), with analysts suggesting that the projected depletion date of the fund has been pushed back by four to seven years.

However, experts point out that since limitations regarding the sustainability of the pension fund still exist, it is necessary to prepare for a potential decline in the fund, in addition to concerns over investment returns, such as the possibility of short-term shocks in the stock market.

According to an overview of the NPS's operational status and meeting materials from the Fund Management Committee for 2026, the total assets of the National Pension Fund stood at approximately 1,526 trillion won as of the end of March this year, an increase of about 68 trillion won from 1,458 trillion won at the end of last year.

Of this total, domestic stock holdings reached 320.9 trillion won, an increase of more than 57 trillion won from the end of last year (263.7 trillion won). The proportion of domestic stocks within the fund's total assets also rose by 3 percentage points, from 18.1% to 21.1%, in just three months.

This growth is attributed to the sustained upward trend of the KOSPI, driven primarily by semiconductor stocks.

The National Pension Service, which had been deeply concerned about the depletion of the fund, appears to have gained some breathing room as the size of its reserves has grown due to this favorable stock market environment.

In June of last year, the National Assembly Budget Office (NABO) published a report forecasting the fiscal and policy effects of parametric reforms to the National Pension. At that time, it projected that the fiscal balance would turn into a deficit in 2048 and the fund would be depleted by 2065.

However, in a report titled "Revised Fiscal Outlook for the National Pension Following Improved Fund Management Performance" released on the 18th, the NABO stated, "Reflecting the increase in reserves through 2025, the point at which the fiscal balance turns into a deficit is delayed by two years, and the fund depletion point is delayed by four years." It estimated the deficit transition point to be 2050 and the depletion point to be 2069.

The government also views the rise in domestic stock prices as a factor that has pushed back the expected depletion date of the fund.

Hyun Soo-yeop, First Vice Minister of Health and Welfare, attended a cabinet meeting last month and explained, "In the previous fiscal projection, the expected depletion date was 2071, but due to strong returns generated this year (in 2025), it has been tentatively pushed back by about seven years."

Nevertheless, some argue that even though the expected depletion date has been delayed, the sustainability of fund management remains limited, and unexpected market volatility could impact future performance, necessitating thorough preparation.
※ Please note: This article was translated by AI and may contain errors.