NPS posts near 10% returns for second straight year

The National Pension Service (NPS) has reported a provisional return rate of 9.7 percent in 2020, marking the second time for the South Korean pension fund to post two consecutive years of logging near 10% returns.

The provisional figure was disclosed by Kwon Deok-cheol, the Minister of Health and Welfare, during an NPS fund management committee meeting on Feb. 24. 

As of the end of last year, the world's third-largest pension fund's gains reached around 72.1 trillion won ($65 billion). Its net assets stood at 833.7 trillion won, up by 97.7 trillion won from the year-earlier period.

"The domestic financial market has been bullish on anticipation over vaccine supply and the easing of macroeconomic policy. However, we've seen increasing volatility as of late," said Kwon, maintaining a careful stance despite high returns.

Kwon noted that the NPS should thoroughly monitor the macroeconomic indicators related to the global pandemic and trends in the financial market.

The NPS fund management committee will also share and review measures to boost responsible investments, alongside discussing the proposal to nominate a non-executive director on the board of companies that fail to comply with environmental, social and governance (ESG) criteria.

"We're seeing social responsibility spread globally, and pension funds' ESG investing is becoming more important," said Kwon. "After reviewing measures from 2019, we will share the pension fund's plans to boost responsible investing," Kwon said.

The NPS achieved its strongest investment return of 11.31% in 2019, led by hefty gains from equities and overseas fixed-income securities, while gains from alternatives slowed to a single-digit rate. 


Write to Jung-hwan Hwang at jung@hankyung.com
Danbee Lee edited this article.