NPS may participate in retirement pension fund market

[Courtesy of National Pension Service]

Amid challenges faced by retirement pension subscribers due to information scarcity and low yields, there is growing interest in having the National Pension Service (NPS) manage retirement pension operations. This approach involves companies or employees pooling their retirement pensions into a fund managed by NPS.

According to government sources on Monday, a task force led by the Ministry of Economy and Finance, the Ministry of Employment and Labor, and the Financial Services Commission is currently discussing step-by-step improvement measures for the enrollment, operation, and disbursement of retirement pensions. Among these discussions is the consideration of NPS participating as an operating entity to enhance the returns on retirement pensions.

If NPS becomes the operator, it is expected to resolve the issue of individual subscribers struggling to find suitable investment options due to a lack of information. Retirement pensions are primarily divided into Defined Benefit (DB) plans and Defined Contribution (DC) plans. In the case of DC plans, where employees must directly choose and manage investment products, the performance has generally been subpar.