NPS to Raise Stock Holdings on KOSPI Rally

The National Pension Service (NPS) Fund Management Committee has revised its investment plan for 2027-2031 as its domestic stock holdings have exceeded the pre-set target and allowable range due to a significant rise in the KOSPI stock market. As of the end of February, the NPS's domestic stock proportion stood at 24.5%, surpassing both its target of 14.9% and the upper tolerance limit of 19.9%.

The committee adjusted its mid-term asset allocation plan to enhance the fund's long-term profitability and stability, considering market conditions and potential structural changes in the domestic stock market, as well as to mitigate market impact from sales. The committee decided to postpone measures to rebalance asset proportions until the end of June, while increasing the planned proportion for domestic stock investments from the existing 14.9% to 20.8%. The deferral of rebalancing, originally set to end in June, has been extended and the allowable range has been temporarily expanded.

The new asset allocation plan will take effect from the end of June when the rebalancing deferral measure concludes. Target asset proportions by year-end are: domestic stocks 20.8%, international stocks 34.7%, domestic bonds 23.1%, international bonds 7.4%, and alternative investments 14.0%. The committee has temporarily widened the strategic asset allocation (SAA) range for domestic stocks but has not disclosed the specific adjustment width.

The Pension Research Association criticized the consideration of increasing domestic stock holdings based on a short-term KOSPI surge as a 'self-negation' that frequently alters self-established asset allocation principles in response to market conditions, thereby undermining the principles for managing citizens' retirement assets. The association emphasized that adhering to self-imposed principles of diversification and financial stability, even when inconvenient, is the way to maintain public trust in the pension system.