Stop selling the national pension? Re-discussed on the 9th’Expanding domestic stock

Input 2021.04.06 21:40

The National Pension Service will hold the Fund Management Committee (Fund Committee) on the 9th to discuss whether to adjust the allowable range of domestic stock investment. Earlier, the National Pension Service could not conclude last month and postponed its decision after the re-election.

According to the National Pension Service on the 6th, the National Pension Fund, the highest decision-making body of the National Pension Service, will discuss a review plan for the National Pension Fund’s maintenance rule (rebalancing) of the target weight of domestic stocks at a meeting at 2 pm on the 9th.

Only the rebalancing agenda will be discussed at this meeting. It is rare for the fund committee to discuss only a single agenda. This meeting is a’one-point meeting’ that deals with issues that the fund committee could not conclude on the 26th of last month.

The key to the rebalancing review plan is to expand the allowable range of the National Pension Plan’s strategic asset allocation (SAA) for this year’s domestic stock share target of 16.8%, from ±2% points to ±3~3.5% points. The total deviation allowance limit of ±5% points remains the same.

If the SAA range is expanded, the share of equity assets increases as the domestic index rises, increasing the range of discretion instead of mechanically repeating the sale as it is now. This can have the effect of reducing the number of stocks that must be sold immediately to achieve the holding goal. However, since the target weighting at the end of this year remains unchanged at ‘16.8%±5%’, there is no effect of expanding the investment of the national pension in domestic stocks.