NPS creates three sr. manager positions to curtail CIO duties

The National Pension Service (NPS) has created three senior manager positions for strategy, risk management and back office just under chief investment officer, in a move aimed at decentralizing investment decision-making.

In an amendment to the NPS’ bylaws announced on Dec. 18, CIO Hyo-Joon Ahn will focus only on investment for the $610 billion pension fund, handing over control of investment strategy, risk management and back office to the new heads.

“This organization shake-up is aimed at reducing the CIO’s workload and creating an environment where he can focus on investment,” an NPS source said.

The strategy head will take charge of setting up investment strategies and exercising voting rights for both domestic and global stocks. Selecting outside managers will also be his/her responsibility.

The risk management head will take care of legal affairs of the investment management department, with the back-office manager responsible for human resources management, and internal and external communications.

LONGER DECISION-MAKING PROCESS

The organization shake-up comes after the government decided in October to create three vice minister-level positions from outside to work for the NPS’ highest decision-making body of the investment management committee.

With the new senior positions being created, a pension fund source worried that CIO Ahn may not be able to push forward investment decisions.

“Contrary to the intention of reducing the CIO’s heavy workload, it will make the decision-making process longer and add to inefficiency,” he added.

But the NPS source argued that the move was intended to improve management efficiency by dividing responsibilities as the fund size continues to grow.

“Given that both strategy and risk management heads are chosen by CIO, it does not mean a sharp curtailment of his influence,” he noted.

By Jung-hwan Hwang

jung@hankyung.com