[Anchor]
During yesterday's (October 14) parliamentary audit of the National Pension Service (NPS), a heated clash broke out over the NPS increasing its domestic stock proportion while the stock market was surging. While opposition lawmakers criticized that the move only benefited foreign investors, the NPS countered that it was a hindsight-based interpretation.
Reporter Han Sung-hee has the details.
[Reporter]
The fund management return recently released by the National Pension Service stands at 14.84% as of the end of July.
This is a drop of more than 12 percentage points in just a month compared to 27.22% at the end of June.
The main reason was that as the domestic stock market declined, the domestic stock return plummeted from 107.37% at the end of June to 60.11% by the end of July.
The Kospi closing price at the end of July was in the 6,500 range.
This was higher than yesterday's (October 14) closing price, which barely defended the 6,000-point mark.
Consequently, the current return rate may have fallen even further.
During the parliamentary audit of the National Pension Service, the opposition took issue with the fact that back in January, even when the proportion of domestic stocks already exceeded the target, the NPS did not sell them—meaning it did not conduct rebalancing—and instead actually increased its domestic stock proportion in May.
They argued that the NPS should have cashed out stocks to secure more of the public's retirement funds, but instead fueled an abnormal stock price surge, giving foreign investors an opportunity to sell at the peak.
[Lee Dal-hee / People Power Party Lawmaker: The damage fell squarely on retail investors who went all in, trusting the government's stock market boost policy, and overseas, there is even a nickname saying, "South Korea's National Pension is our ATM machine."] <br />
[Kim Sung-ju / Chairman and CEO of the National Pension Service: If we hadn't suspended rebalancing, we probably would have had to sell about 800 billion won worth a day, which would have dealt a severe shock to the market...] <br />
A debate also unfolded over whether the National Pension Service was mobilized to prop up the stock market for the administration ahead of the local elections in June.
[Kim Tae-ho / People Power Party Lawmaker: We demand a parliamentary investigation regarding suspicions of turning the public's retirement funds into a political tool, the suspension of NPS rebalancing, and the expansion of domestic stock weight.] <br />
[Kim Sung-ju / Chairman and CEO of the National Pension Service: I have never experienced a case where government requests passed through the Fund Management Committee as they were. If we return to the situation of the Korean stock market at that time, there was no disagreement on suspending rebalancing.] <br />
The People Power Party pressured the NPS to disclose the meeting minutes from when rebalancing was suspended and the domestic stock proportion was raised, but the Democratic Party and the NPS countered that, in accordance with the National Pension Act, the principle is to disclose them four years later.
(Video Shooting: Shin Dong-hwan, Video Editing: Oh Young-taek, Design: Kim Yeji)
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