© Archyde.com. The National Pension Service, which has become a ‘workplace for resumes’… Half of the management is overcharged
In July 2020, the National Pension Service announced the ‘Comprehensive Overseas Investment Plan’. It was in the name of preparing for the era of 1,000 trillion won in fund management. At the time, Minister of Health and Welfare Park Neung-hoo said, “We will drastically increase the number of excellent human resources in the Fund Management Headquarters to enhance the implementation of the plan.” However, even following that, the departure from the management of the national pension continued. The assets managed by one manager increased from 1.9 trillion won at the time to 2 trillion won last year. The Canadian Pension Investment Board (CPPIB) and the Dutch Public Pension Plan (ABP) have 260 billion won and 650 billion won in assets under management per capita, respectively. According to the Ministry of Health and Welfare on the 5th, 27 managers quit every year, and 164 managers left the national pension for six years from 2017, when the fund management headquarters moved to Jeonju, Jeonbuk, to last year. An average of 27.3 people packed each year. This is more than half of the current 319 operators. As a result, the National Pension Service is unable to fill the quota of fund management positions (380) every year.
Among them, it is a painful loss that chiefs who have accumulated experience and know-how cannot stay long. A large number of people at the level of the head of the National Pension Service resigned during the relocation of the fund headquarters to Jeonju and the merger between Samsung C&T and Cheil Industries. Even following that, key operators such as Seongje Choi, head of the trusteeship office in 2020, Hyunsoo Kim, head of the real estate investment office, and Jiyeon Kim, head of the infrastructure investment office in 2021 continue to drop out. Last year, Hak-Jin Bae, Head of Private Equity Investment Team in America, and Head of Infrastructure Investment Team Sang-Wook Son, moved to SK Square and IMM Credit Solution, respectively.
The National Pension Service recorded the lowest rate of return last year. This is because the stock and bond markets collapsed together, and alternative investments did not contribute to defending the yield. Last year, the national pension fund management rate of return was -8.22% (79.6 trillion won in management losses). Traditional asset classes such as domestic stocks (-22.8%), foreign stocks (-12.3%), domestic bonds (-5.6%) and foreign bonds (-4.9%) all suffered losses. The alternative investment rate of return was the only positive one, but it was known to be below the standard rate of return. The actual rate of return did not keep up with the standard rate of return raised by inflation. “National Pension service is for resume” Experts unanimously say that if the National Pension Service wants to secure excellent manpower and increase returns, at least the fund management headquarters should be relocated to Seoul as soon as possible. This is because as long as they remain in Jeonju, they cannot retain human resources in the financial investment industry that value global networks for long.
A former manager of the National Pension Service said, “The low salary compared to the private sector is also a problem, but few of the managers want to stay long-term with a sense of duty because of the inconvenience of children’s education and living conditions.” He said, “The purpose of most newly hired personnel is to receive a high ransom and leave for the private sector by adding the national pension service experience to their resumes.”
Relocating to Seoul is also essential to increase the return on alternative investments. This is because international networks are important for alternative investments such as real estate, infrastructure, and private equity. An official from the alternative investment industry said, “The private market generates excess returns through information superiority in products and assets.” said.
According to data submitted by the National Pension Service by Democratic Party lawmaker Won-i Kim, 20 out of 66 resigners worked in alternative investment-related departments from July 2020 to October last year. Infrastructure Investment Office (10 people), Private Venture Investment Office (6 people), Real Estate Investment Office (3 people), and Alternative Risk Management Office (1 person).
The Ministry of Health and Welfare plans to alleviate the ‘distance burden’ by establishing a smart work center dedicated to fund management workers in July, but experts say that it is not feasible to stay in Seoul only for some managers.
Jeon Kwang-woo, former chairman of the National Pension Service, and chairman of the World Economic Research Institute, said, “When I was president, I tried to keep the fund management headquarters in Seoul, but it was regrettable that it was moved to a province due to political considerations.” said.
In order to relocate the fund management headquarters to Seoul, Article 27 of the National Pension Act, which stipulates that ‘the fund management headquarters is located in Jeonju’, must be amended. However, as the local lawmakers who pushed ahead with the Jeonju relocation to gain votes in the district still remain in the Health and Welfare Committee and insist on ‘remaining in Jeonju’, considerable political controversy is expected to follow the move to Seoul.
Reporter Ryu Byung-hwa [email protected]
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