NPS, unable to sell at 9,000 on the KOSPI, hit by a market crash as “182 trillion won evaporates”; questions over management of retirement funds

[Financial News] On the 19th, the People Power Party claimed that the Lee Jae-myung administration had mobilized the National Pension Service (NPS) to engage in “stock price manipulation” for the June 3 local elections, and called for Health and Welfare Minister Jung Eun-kyung to resign and President Lee Jae-myung to apologize to the public. The recent plunge in the KOSPI cut the NPS’s valuation of its domestic stock holdings by 182 trillion won. Seizing on this, the party is escalating its offensive by raising the prospect of impeaching Minister Jung and launching a parliamentary investigation and a special counsel probe.
People Power Party lawmakers serving on the National Assembly Special Committee on Pension Reform and the Finance and Economy Planning Committee held a press conference at the National Assembly’s Communication Center that day and said, “Those responsible for the dangerous gamble the Lee Jae-myung administration undertook with people’s retirement security as collateral—the ‘pension fund casino’—must be held accountable.”
The People Power Party views the NPS’s deferral of rebalancing and its increase in the target allocation to domestic stocks, among other measures, as an effort to boost share prices for the local elections. It said the NPS’s valuation of its domestic stock holdings soared as the KOSPI climbed as high as “9,000 points,” but has since plunged 38% from its peak, inflicting major losses on people’s retirement savings. The party also said, in effect, that the truth was being concealed by withholding even the Fund Management Committee’s meeting minutes. In essence, it claimed that the government had intervened politically and caused substantial losses to the NPS.
They say it must be established what instructions were exchanged among the presidential office, the Ministry of Health and Welfare, and the National Pension Service. They said the complete set of Fund Management Committee meeting minutes and decision-making materials must first be submitted to the National Assembly, and signaled that if this did not happen, they would use even a parliamentary investigation and a special counsel probe to uncover the truth. Rep. Ahn Sang-hoon, the opposition’s secretary on the Pension Special Committee, said, “I have repeatedly warned that there would be problems if the NPS were recklessly deployed in the domestic stock market,” and argued, “Whether through a parliamentary investigation or a special counsel probe, someone must at least be held accountable.”
The possibility of impeaching Minister Jung and calling for an apology to the public from President Lee was also raised. At the press conference, they urged, “Minister Jung, as chair of the NPS Fund Management Committee, must resign immediately and take responsibility for abandoning her role as the last line of defense tasked with protecting people’s retirement security and taking the lead in boosting the stock market for the local elections.” They added, “President Lee cannot evade responsibility either. Stop hiding behind your underlings and trying to shift the blame, and sincerely apologize to the public.” Rep. Kim Yong-tae stressed that Minister Jung had violated the National Pension Act, which requires the fund to be managed without undermining fiscal soundness, saying, “Personally, I think that is grounds for impeaching the minister.”
The controversy over the alleged political mobilization of the NPS is expected to continue. On the 18th, People Power Party Policy Committee Chair Lim Yi-ja said, “Alongside the single-stock leveraged ETF incident, this NPS management debacle is clearly a harm caused by state-directed finance and a policy failure at the level of the administration.” She added, “The National Assembly must conduct a thorough investigation, and if necessary, even through a special counsel probe, clearly establish who is responsible.” A People Power Party official also told Financial News, “Discussions on a special counsel probe should begin as soon as the parliamentary audit period ends.”
[email protected] Lee Hae-ram Reporter