An Sang-hun accuses president of 'verbal interference' in national pension fund management, calls for structural reform

People Power Party lawmaker An Sang-hun said Friday that the president had in effect engaged in "verbal interference" in the management of the national pension fund.

Speaking at a plenary session of the National Assembly's Special Committee on Pension Reform, An said the president had on multiple occasions publicly pressured the national pension fund to increase its allocation to domestic equities. The National Pension Fund Management Committee — chaired by the minister of Health and Welfare — subsequently made a series of decisions, including a "rebalancing deferral" and a "significant upward revision of the domestic equity target ratio."

"The national pension fund is not a policy fund for any administration, nor a tool for propping up share prices — it is the precious retirement savings of the Korean people," An said. "Structural reform of the entire national pension fund management system is needed to block political interference and establish a framework that operates on the basis of expertise and independence."

He added that the extreme volatility gripping the domestic stock market this year — which he likened to "a casino gambling floor" — was significantly influenced by both the introduction of single-leveraged exchange-traded funds and the national pension fund's rebalancing deferral and upward adjustment of its domestic equity weighting.

An also said the pension fund's rebalancing deferral had sent a powerful signal to the market, and that foreign investors had recorded net selling of more than 150 trillion won ($108 billion) in just the first half of the year before exiting. "As a result, it is young people and retirees who entered the stock market late that have suffered major losses — this is a clear policy failure," he said.

He went on to say that a decade-long trend of gradually reducing the domestic equity target ratio had been reversed by a single word from the president. An urged that the basis on which the fund management committee made its decisions, and the extent to which the president's remarks influenced those decisions, be made transparent to the public.

An said structural reform of the national pension fund management system would be taken up as a major agenda item by the special committee going forward. "To protect the precious retirement savings of the people, political interference must be blocked at the source and a fund management system built on expertise and independence must be established," he said.