A 59.71% Return Rate: The Winning Stock That Filled the National Pension Service's Coffers

[Financial News] The National Pension Service (NPS) has posted a sharp rise in returns this year, buoyed by the boom in domestic and overseas stock markets. On top of that, a new analysis suggests that the depletion date of the NPS fund, which had drawn concern, could be delayed by as much as seven years from earlier projections, thanks to last year's record-high investment gains.
The National Pension Service Fund Management Headquarters said in a disclosure on the 29th that the fund's overall return rate stood at a preliminary 14.18% as of the end of April. As a result, total fund assets surpassed 1,670 trillion won. Compared with the 4.42% return recorded at the end of March, the figure jumped by nearly 10 percentage points in just one month.
The dramatic rebound was driven by the domestic stock market. As of the end of April, returns from domestic equities reached an impressive 59.71%. NPS said the local market extended its double-digit gains as geopolitical risks in the Middle East eased and earnings in the artificial intelligence industry, led by semiconductors, remained solid, lifting overall performance.
Other asset classes also performed well overall. Overseas equities followed domestic stocks with a 8.19% return, while alternative investments returned 3.95%, overseas bonds 2.95%, and short-term funds 0.80%. By contrast, domestic bonds posted a -1.74% return as rising oil prices fueled inflation concerns and higher interest rates weighed on bond valuations. In the case of overseas bonds, upward pressure on rates was offset by the weaker won, allowing them to remain in positive territory.

Before this year's rally, last year's record-breaking performance by NPS is also creating a positive ripple effect on long-term finances. According to data submitted by the Ministry of Health and Welfare (MOHW) to Rep. Kim Sun-min's office at the Health and Welfare Committee of the National Assembly, a revised projection based on the fund size of 1,458 trillion won at the end of last year showed that the depletion date would be extended by five years, from 2064 to 2069.
NPS recorded an all-time high investment return of 18.82% last year, driven by a strong domestic stock market and other factors, generating 231.6 trillion won in gains in a single year. That is an astronomical sum, equivalent to about 4.7 times the total amount of pensions NPS pays out in a year. Even if the long-term average return is assumed to be 4.5% annually, the fund's stronger financial base from last year's massive gains would push back the depletion date by five years.
If the government achieves its long-term average return target of 5.5%, the depletion date could be extended to 2078, seven years later than the previous forecast. As the fund has grown beyond 1,500 trillion won and into the 1,600 trillion won range, a 1 percentage point difference in returns now has a much greater impact on long-term financial stability.
The government has already delayed the depletion date once by carrying out a pension reform that will raise the contribution rate by 0.5 percentage points each year from 2026 until it reaches 13%, while also increasing the income replacement rate to 43%. With more than 100 trillion won in additional gains reportedly earned in the first half of this year alone thanks to the strong domestic stock market, there is also speculation that the official financial projection could be revised more optimistically in the future.
However, the Ministry of Health and Welfare said the latest result is only a simple recalculation based on last year's fund size. It added that the official financial projection, which will comprehensively take into account future population estimates, macroeconomic variables, and institutional reforms, is scheduled to be released in the sixth National Pension Service financial review in 2028.
moon@fnnews.com Moon Young-jin Reporter