President Lee Jae-myung said Wednesday that the National Pension Service (NPS) has "benefited significantly from this year's stock price gains," urging officials to "give more thought to how the pension fund is managed." Analysts interpret this as an indirect instruction to increase NPS's domestic equity allocation.
A higher domestic allocation by NPS would strengthen downside support for the KOSPI index and help curb the won's depreciation against the dollar.
Lee made the remarks during a Ministry of Health and Welfare briefing at the Sejong Government Convention Center, where he received a report from the NPS, an agency under the ministry.
Health Minister Chung Eun-kyung explained that while the target allocation for domestic equities is 14.9%, the actual ratio has risen to 15-16% due to valuation gains. NPS Chairman Kim Sung-joo responded that "the Fund Management Committee will convene to discuss responding swiftly to domestic market conditions."
The briefing also addressed NPS's fiscal outlook. Minister Chung reported that "if we achieve a 5.5% return, fund depletion is projected for 2071," adding that "higher returns would delay the depletion further."
On stewardship code practices, President Lee said they "should be conducted properly," asking "isn't this being done with the public's shares?" The stewardship code is a set of guidelines requiring institutional investors like NPS to fulfill fiduciary duties by participating in corporate decision-making while managing assets on behalf of investors.
Lee also instructed the ministry to adjust medical fees, saying "we should secure funding by adjusting health insurance coverage for minor ailments like colds and use it to raise fees for essential medical services."
Considerable time was devoted to discussing the so-called "emergency room runaround" problem, where patients are turned away from multiple hospitals. "We've established a system, but it's not working," Lee said, directing officials to "prepare countermeasures and report separately to the Cabinet meeting."
