The National Pension Service (NPS)`s investment loss in domestic stocks is expected to approach 10 trillion won this year.
According to Rep. Yoo Jae-joong of the Liberty Korea Party, the NPS stock yields posted minus 6.01% by the end of July this year, a fall of 0.71% point from the end of June.
It is reported that there is a problem with its investment strategy as its return rate is 0.69 points lower than its market return.
As a result, the estimated value of shares held by the national pension fund plunged from 131.5 trillion won at the end of last year to 123 trillion won at the end of July, and if new investment for this year is included, the fund`s investment loss reached 9.9 trillion won.
A more serious problem lies in the way in which the national pension fund operates. According to the fund management plan submitted to the National Assembly in October last year, it planned to allocate 940 billion won of extra funds for local stocks this year, but increased the figure to 1.5 trillion won, suffering more investment loss.
On the other hand, its new investment in foreign stocks, which generated 7.45 percent of profits, came to 7.9 trillion won, only 45 percent of its earlier plan of 17.5 trillion won, losing a chance to enhance the fund's overall investment profit ratio.
Rep. Yoo said, "Under the situation that the timing of national pension depletion has been pushed forward, I cannot hide disappointment at the news that losses are growing amid high public anxiety. The NPS should appoint a fund management head as soon as possible to make every effort to make innovative changes in fund management and increase the return rate."
