[Reporter’s Notebook] Will the National Pension Service Play the Role of a Problem Solver?

"You might be able to pick your teeth with a nail, but should you?" This was the remark made by an economist to a reporter regarding the National Pension Service (NPS). The comment came in light of the NPS being mobilized not only for stock market boosts and corporate oversight, but even for defending the currency. Under the Lee Jae-myung administration, the NPS has essentially taken on the role of an 'economic relief pitcher.' The government is pushing for increased domestic investment to achieve the KOSPI 5000 target, strengthening oversight of major conglomerates’ decision-making through the Stewardship Code, and is now facing pressure to significantly expand domestic investment—including in KOSDAQ—to help defend against the recent high exchange rate.
The government believes that this problem-solving role of the NPS will ultimately lead to higher returns. The logic is that greater transparency in corporate decision-making and a bullish stock market will increase domestic investment yields. Additionally, stabilizing the exchange rate is seen as essential for the NPS to achieve stable returns. This reasoning is not without merit, as investment profits are generated within the context of national economic growth.
The issue, however, is that it is difficult to say the NPS is voluntarily assuming the role of a relief pitcher. Even if the Stewardship Code aims to enhance the effectiveness of existing systems, the push for greater domestic investment is clearly driven by government pressure to boost the stock market and defend the currency. On June 16, President Lee Jae-myung directly stated during a Ministry of Health and Welfare briefing, "The NPS has greatly benefited from rising stock prices. I believe we need to give this serious thought," making his expectations clear.
The ruling Democratic Party of Korea (DPK) has gone further, even suggesting that investment guidelines for the NPS should be relaxed. Their intention is to dramatically increase the proportion of domestic investment, not only in KOSPI but also in the more volatile KOSDAQ. A key DPK official commented, "Given the frequent fluctuations in both domestic and international markets, do we really need strict investment allocation guidelines to respond quickly?" Kim Sung-joo, former DPK lawmaker and current president of the NPS, also stated during a briefing, "We plan to revise the investment guidelines. This could be finalized at next year’s National Pension Fund Operation Committee meeting."
For now, with the domestic stock market on the rise, things may unfold as the government and ruling party desire. However, what is truly needed for the long-term stability of the NPS is ultra-long-term investment that will last for decades. In such forward-looking investments, what matters most is not short-term gains but independent and professional judgment. There are growing concerns that political interference, which often sways with the winds of the moment, could ultimately be detrimental. Just because a nail is sharp like a toothpick, does that mean it should be used to pick your teeth?
uknow@fnnews.com Reporter