Korea National Pension Service: Year-end review of domestic stock allocation cap, plans to directly participate in corporate pension business

(1) The Chairman of the National Pension Service of Korea stated that the fund will reassess whether to further increase the target allocation ratio for domestic stocks by the end of 2026. The recent adjustment of this ratio is based on the judgment that the current stock market rise is structurally positive, rather than a short-term fluctuation.(2) When rebalancing its domestic stock holdings, the fund will minimize market impact as much as possible. Currently, the fund's holdings account for about 6% of the total market capitalization of the Korean stock market and are concentrated in many large-cap stocks.(3) If the fund directly participates in fund-type corporate pension businesses, it is expected to achieve better asset diversification, risk management, and asset allocation. In addition, the management fees charged are expected to be only about one-third of the current service providers’ fees, which will help increase the actual returns for policyholders.(4) Before this measure comes into effect, it will still be necessary to complete multi-party consultations among labor, management, and the government, as well as to promote the relevant legislative approval process.