National Pension Service Strengthens Voting Rights Guidelines on Treasury Shares: Must Align with Shareholder Value

The National Pension Service (NPS) is strengthening its guidelines for exercising voting rights regarding companies' holding and disposal of treasury shares.

The National Pension Fund Management Committee announced that it held its 7th meeting at the Government Complex-Seoul on the 20th and deliberated and voted on the "Amendment to the Guidelines on the National Pension's Stewardship Responsibilities," which incorporates regulatory changes following the amendment of the Commercial Act into the detailed guidelines for exercising voting rights on domestic and overseas stocks.

When companies request approval for treasury share holding and disposal plans at shareholders' meetings, the NPS decided to vote in favor only if the plans contribute to enhancing long-term shareholder value, taking into account consistency with the purpose disclosed at the time of the treasury share acquisition, as well as the concreteness and rationality of the plans.

In cases where a company tables an agenda item to amend its articles of incorporation to stipulate exceptions allowing the holding and disposal of treasury shares for management purposes, the NPS also decided to vote in favor only if it aligns with long-term shareholder value, considering the rationality of the reasons and the possibility of reflecting the opinions of general shareholders upon plan approval.

In her opening remarks, Minister of Health and Welfare Jeong Eun-kyung, who chairs the fund management committee, said, "I am well aware of the public's deep concerns regarding the long-term financial stability of the National Pension Service due to recent volatility in domestic stocks." She added, "To properly evaluate performance, it is necessary to assess the returns of all assets from a long-term and comprehensive perspective."

Minister Jeong explained, "To ensure a stable retirement for the public, the NPS operates the fund from a long-term perspective in accordance with fund management principles such as profitability and stability," and noted, "We are long-term investors diversifying investments across various assets, including domestic and foreign equities, domestic and foreign bonds, and alternative investments."

She further stated, "We will closely monitor financial market conditions and strive to enhance long-term investment performance so that the public can entrust their retirement with peace of mind."

Meanwhile, the committee deliberated and voted on an amendment to the "2026 National Pension Fund Management Plan" to increase the budget for the emergency retirement fund loan program, known as the "Silver Loan" project, by 8.5 billion won during the meeting.

As a result, this year's budget for the Silver Loan program increased from 54 billion won to 62.5 billion won.

The Silver Loan program provides emergency living funds to National Pension beneficiaries aged 60 or older for purposes such as jeonse or monthly rent deposits, medical expenses, funeral expenses for a spouse, and disaster recovery costs.

The fund management committee stated that the budget increase will allow the Silver Loan program to continue without interruption through the end of the year.

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.