Good Returns
As of the end of last year, South Korea’s cumulative national pension fund amounted to 469.82 trillion won (US$404.85 billion), according to the latest annual report.
The fund returned 5.25% for the year on the basis of the amount weighted rate of return, while its profits reached 23.03 trillion won (US$19.85 billion).
This was largely due to high rates of return from the active investment in the global financial market and earnings from the investment in bonds and stocks, despite the depressed domestic stock market.
The Ministry of Health and Welfare held the 2015 3rd National Pension Fund Operation Committee at the Westin Chosun in Sogong-dong, Seoul, on July 29, and deliberated and decided on the 2014 National Pension Fund Operation Performance Evaluation, which included such data.
Although the figure is short of the annualized 6.21% gain since the pension fund’s launch in 1988, industry watchers say that it is a fairly good achievement, considering the basis of low growth and low interest and the depressed domestic stock market. Up to date, the total cumulative profits amounted to 212.44 trillion won (US$183.06 billion).
Last year, the pension fund’s operation returns in the financial sector recorded 5.25 percent on the basis of time weighted rate of return. By asset group, alternative investment showed the highest earnings rate with 12.47 percent, following overseas bonds with 9.23 percent, overseas stocks with 8.94 percent, domestic bonds with 6.79 percent, and domestic stocks with 5.43 percent.