New Chairman Moon Hyung-pyo of the National Pension Service.

Chairman Moon delivers his inaugural speech at a ceremony held at NPS on Dec. 31, 2015.(Photos:NPS)

Moon Hyung-pyo, a former health and welfare minister, was inaugurated as the chairman of the National Pension Service (NPS) on Dec. 31.

In his inaugural speech, he said the NPS should be made so that the people can depend on its services better and thus loved. It is Moon’s biggest objective, he said, as he takes over the helm of the pension service.

The NPS has the two major tasks ahead, one to strengthen its function to guarantee a healthy and productive life after retirement; and the healthy management of pension funds.

One of the most important areas of focus for the NPS should be taking measures to cover areas still uncovered under the pension service system. “We have to work hard so that more people can get benefits from the pension service,” the new chairman said.

Moon said we have to widen communication and channels of dialogues, taking time to educate people on the importance of the pension service, as well as public relations to boost the public’s understanding of the service.

“In particular, we have to expand our support to people preparing for their retirement through consultation and education service in such key areas as the financial management not limited to the pension service by implementing the Retired Life Support Law legislated not long ago with a hitch,” the top official of NPS said.

“We also have to see that nothing is left out in our support to the various aid activities for all kinds of welfare services including the support to the handicapped and the basic pension system so that the public will trust and love us,” the new NPS head said.

“We will also work on the matters related to securing social agreement with a detailed long-term fund management plan for the purpose and principles of the financial management of the NPS fund based on the 4th Treasury Accounting, which is scheduled to come up soon,” he added. 

Moon said he will run the NPS based on on-site principles, where people who need help from experts can get it right away. 

He will also increase the number of hourly workers who are able to subscribe to the NPS; more frequent use of the credit system; expand the Durunuri project; restore women who quit their jobs to continue to pay for their NPS subscriptions until everyone in the country is able to pay for his or her subscription for the NPS. Everyone should be become entitled to get the NPS to support their retired lives.

He swore that the NPS funds will be managed like his own money.

The NPS, in the meantime, decided to stop currency hedging on its overseas bond investments by cutting the hedging target rate from the current 100 percent to zero by the end of 2018 in an attempt to cut costs.

The National Pension Fund Investment Office said on Thursday that it decided to reduce the hedging target rate on overseas bond investments from the current 100 percent to 50 percent by the end of 2017 and eventually to zero by the end of 2018. For other investments like overseas stocks and overseas alternatives, the pension fund already cut its currency hedging target rate from 50 percent in 2009 to zero last year.

The NPS, which manages 22 trillion won ($18.81 billion) worth of overseas bond investments, expects that the latest decision will prevent a rise in currency hedging costs from currency-swap trades. It also believes that currency hedging could take away the chance of possible foreign exchange gains from a stronger dollar in the future, following the United States’ interest rate hike.