The National Pension Service (NPS) will review the stewardship responsibilities of its outsourced fund managers and prepare reports starting in the second half of this year. The move follows an implementation review framework devised by the Financial Services Commission (FSC), and outsourced managers' responsibilities are expected to be strengthened.
The NPS Fund Management Committee held its sixth meeting of 2026 at the Government Complex Seoul on Thursday, reviewing and approving measures including the "Plan to Introduce an Implementation Review Framework for NPS Stewardship Activities," the "2025 NPS Fund Management Performance Evaluation (draft)," and the "2025 NPS Fund Management Headquarters Bonus Payment Rate (draft)."
The committee approved a plan to introduce an implementation review framework for the NPS's stewardship activities. Accordingly, from the second half of this year, the National Pension Service will prepare implementation reports on 12 review items across seven principles of stewardship activities. The reports will be disclosed after review by the Stewardship Responsibility Committee under the Fund Management Committee.
In particular, for domestic equity fund managers, the NPS will evaluate the qualitative level of efforts to enhance shareholder value, including compliance with the NPS stewardship principles and the appropriateness of handling conflicts of interest. Going forward, when additional funds are allocated to or withdrawn from managers based on their performance, the NPS plans to link the results of stewardship evaluations to ensure effectiveness.
The committee also approved the "2025 NPS Fund Management Performance Evaluation (draft)" and the "2025 NPS Fund Management Headquarters Bonus Payment Rate (draft)." Starting with this performance evaluation, the performance evaluation and compensation system, revised following the introduction of the reference portfolio, will be applied. Through a Fund Management Committee decision in December 2024, the performance evaluation period was changed from the previous one year to a cumulative five years so that the fund can improve long-term performance. Whereas only relative performance had been evaluated in the past, an evaluation of absolute performance was newly established to enhance the fund's sustainability.
The cumulative five-year return of the NPS fund's financial sector was 9.75 percent, exceeding the benchmark return (9.59 percent) by 0.16 percentage point. Returns by asset class were 11.24 percent for domestic equities, 17.82 percent for overseas equities, 1.39 percent for domestic bonds, 6.24 percent for overseas bonds, and 12.75 percent for alternative investments. The resulting bonus payment rate was 78.6 percent.
Minister of Health and Welfare Jeong Eun-kyeong said, "The NPS has faithfully carried out its stewardship activities to improve the fund's long-term and stable returns. As the importance of stewardship activities for innovation in the domestic capital market grows even greater, we expect that the introduction of this implementation review framework will lead to a stable increase in the NPS's profitability and positive changes in the domestic capital market."
Jeong added, "Last year's performance was the result of the Fund Management Headquarters responding nimbly to changes in domestic and overseas financial markets, and through this, we were able to strengthen the sustainability of the NPS's finances, including delaying the fund's depletion period by a considerable period. We will continue to responsibly manage citizens' retirement funds and strive to achieve stable performance over the long term."
