⚡ Key Summary
Record Performance and Delayed Depletion:
The National Pension Service (NPS) achieved a record-high return of 18.82% in 2025, with assets under management surpassing 1.526 quadrillion won (as of March 2026). This is estimated to delay the depletion of the fund by 5 to 7 years compared to previous forecasts.
Selling at the Peak and Rebalancing Pressure:
As the KOSPI surpassed the 9,100 mark, the NPS sold 1.2696 trillion won worth of stocks over four days to adjust its asset allocation. Concerns are rising over a potential sell-off of up to 60 trillion won once the grace period ends.
Limitations of the Demographic Cliff:
The record-high returns only buy time. Experts point out that with the working-age population expected to be halved by 2052, investment returns alone cannot provide a fundamental solution to the demographic crisis.
※ This article is based on a video report released on June 25, 2026.
1. From Hellbound to Heaven: The Secret Behind the 18.82% Record Return
"Looking at the recent performance of the National Pension Service, one cannot help but say they are doing an incredibly good job."
Just three years ago in 2022, the NPS faced the worst performance in its history, posting a negative 8.3% return (a loss of 79.6 trillion won) due to global interest rate hikes and the Russia-Ukraine war. However, after deep reflection, the fund completely overhauled its strategy. It reduced its underperforming domestic stock holdings and increased its foreign stock allocation to 34%, successfully riding the global semiconductor rally in 2025.
The result was phenomenal. The NPS recorded a fund management return of 18.82% in 2025, the highest since the fund was established in 1988. The profit earned in a single year reached 231.6 trillion won. This is a standout performance among major global pension funds, and the profit alone is an astronomical amount sufficient to pay pensions to subscribers for five years.
As of the end of March 2026, the total assets of the NPS exceeded 1.526 quadrillion won, marking a structural turning point where cumulative investment gains have surpassed the principal amount of premiums paid by subscribers. Some experts are even offering optimistic projections that the fund depletion date will be delayed by 5 to 7 years compared to previous forecasts.
2. Managing 1.5 Quadrillion Won from Jeonju: The Pressure of 2 Trillion Won per Manager
The NPS Fund Management Headquarters, which moves this massive amount of capital, is located in Jeonju, North Jeolla Province, not in Seoul's financial district. It was relocated as part of the Innovation City policy. Due to recent staff departures, each fund manager is now responsible for managing an astronomical sum of approximately 2 trillion won. Compared to global asset management benchmarks, an overwhelmingly small number of people are shouldering the risk.
Nevertheless, amid the historic market rally where the KOSPI soared to the 9,100 mark, the Fund Management Headquarters showed remarkable composure. They proved their cold-blooded investment sense by selling 1.2696 trillion won worth of domestic stocks over four days, effectively realizing profits at the peak.
3. KOSPI Surpasses 9,100 and the Warning of a 60 Trillion Won Sell-off
The recent massive sell-off by the NPS of stocks such as Samsung Electro-Mechanics (net sell of 777 billion won), SK Square, and Mirae Asset Securities, alongside purchases of Naver (459.8 billion won) and SK Hynix (431.8 billion won), is not merely short-term trading. It is the result of a rigorous rebalancing strategy.
The NPS's domestic stock holdings surged from 264 trillion won last year to 395 trillion won at the end of February this year, an increase of over 130 trillion won in just a few months. Even though the target allocation for domestic stocks was raised from 14.9% to 20.8%, the KOSPI rose so sharply that the domestic stock portion exceeded the permitted limit of 30%.
According to an analysis by Daishin Securities, as of June 19, the NPS's domestic stock allocation had expanded to 31.4%, increasing the pressure to sell. As the rebalancing grace period ends at the end of June, there are concerns about a potential sell-off of up to 60 trillion won in stocks.
4. The Paradox of the Whale in a Fishbowl and the Real Test of the Demographic Cliff
Behind the flashy report card lies a fundamental paradox warned of by legal and economic experts. The NPS has become a whale that has grown too large for the fishbowl of the Korean capital market.
The current hundreds of trillions of won in profits are merely valuation gains on paper. When the time comes for pension payouts to increase significantly due to aging, the NPS will have to sell off large amounts of stocks to secure cash. The shock to the domestic stock market and the burden of a potential price collapse when the whale struggles to get out of the fishbowl will be left entirely to future generations.
An even more powerful enemy lurking in the background is the demographic structure. Statistical projections suggest that by 2052, South Korea's working-age population will decrease by approximately 8.7 million from current levels, dropping to half of the total population. Faced with this structural cliff, where the number of people paying premiums plummets while the number of pension recipients increases, no genius asset manager or record-high return of over 18% can be effective. Ultimately, earning an incredible amount is not a fundamental solution to prevent depletion. The real test for the 1.5 quadrillion won giant will begin when the market shakes and the population shrinks.
Deep Dive Q&A
Q1. There are concerns that the NPS is disrupting the stock market by selling off large amounts of shares at the KOSPI 9,100 peak. Can't they stop the rebalancing?
A1. The NPS's asset rebalancing is a legal and institutional obligation to protect the safety of the public's retirement funds. If the KOSPI surges and the value of domestic stock assets becomes excessively large, the impact on the entire NPS fund when the domestic market eventually crashes would be uncontrollable. For the sake of portfolio diversification, the fund is mechanically forced to sell when a specific asset exceeds a set limit (currently about 30%). This is why precise speed control is necessary between the fundamental principle of risk diversification for pension funds and the reality of minimizing shocks to the domestic stock market.
Q2. What is the entry into the 501 trillion won retirement pension market, and can this solve the NPS depletion problem?
A2. The 5-year average return on retirement pensions currently managed by commercial financial institutions is only in the 3% range, and 2 trillion won in fees is deducted every year. In response, the NPS has proposed a plan to manage these retirement pensions directly, based on its overwhelming fund management capabilities, to increase returns by more than three times. However, this is merely a plan to increase the retirement pension accounts that individuals will receive in their old age; it is unrelated to the financial system that directly addresses the structural depletion (exhaustion of principal) of the National Pension itself caused by low birth rates and an aging population.
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