Chairman Kim Sung-joo of National Pension Service (NPS) said he will strive to help retirees receive larger pensions by increasing the pension premium.
Kim said he will strengthen the social function of the NPS as well by increasing the public sector investment to benefit society more, although he has no intention to divert its traditional function to seek profits for its 600 trillion won fund.
Former lawmaker Kim is known for having a deep understanding of the pension fund as he worked as a member of a parliamentary committee for health and welfare during his term. A native of Jeonju, Kim contributed to relocating the head office of the pension fund to his home town, according to local reports.
The former legislator filled the vacancy created with the arrest of former NPS Chairman Moon Hyung-pyo, who was found guilty of pressuring the pension fund to back a controversial merger between Samsung C&T and Cheil Industries in 2014. Moon was the welfare minister and the head of an internal committee at the pension fund at that time.
Subscribers for the annual pension are required pay 9 percent of their annual salaries to the NPS as a premium for their retirement pensions. The NPS has been paying out 360,000 won monthly on average, while 880,000 won is handed out monthly to those who paid the pension premiums for over 20 years consecutively.
Pensions paid to retirees don’t amount to much because the premiums are too low. Chairman Kim wants to change that, boosting premiums to hike monthly payments for pensioners, but it is hard to convince the right people to go along with the plan as it politically unpopular.
The new chairman said the past chairmen knew the pension system very well, but very little about the politics involved in raising premiums fund, which must get parliamentary approval, and legislators were reluctant to vote for the increase.
But Kim is willing to fight for the increase as a former legislator himself, believing he has a fighting chance to convince his former colleagues to pass the bill to boost pension premiums. He is convinced that the NPS should boost its public sector investments to do its social services more fully, in particular such areas as education, rental housing and convalescence.
Kim thinks that the NPS has been too focused on running the fund to make a profit up until now, which doesn’t ensure the growth of the pension payments.
A study showed in 2013 that the pension funds would dry up in 2060, but a new study shows that the low birth rate and faster aging could speed up its demise.
Kim thinks that the NPS can help the national economy more by hiking its investments in public sector projects.
The new chairman is also in favor of the “stewardship code,” which the NPS plans to introduce at the end of this year. He believes the code is designed to hike corporate profits and NPS profits by strengthening shareholder rights in listed firms The NPS holds stakes in nearly one-third of the listed firms, or around 750 of them. He doesn’t think the NPS wants to dominate the business firms through its stakes in those firms with the new code, but help the firms make the right decisions by correcting the wrongs of the past and preventing them from making wrong decisions so they would be on the right track in operations going forward.
The National Pension Service observed its 30th anniversary with an international seminar entitled, “Boosting the Sustainability of the Public Pension,” at the Conrad Hilton Hotel on Oct. 17.
The seminar discussed the results of the reform of pension systems in foreign countries to find out about the sustainability of pension system and the direction for the future development.
The participants included senior researcher Nuno Merira Simoes Cunha of the ILO, Professor Karl Hinrichs of the Bremen University in Germany, and Director Kenichiro Kashiwase and other pension experts from advanced countries.
Divided into three sessions, on each session, the experts on pension from Korea and overseas presented their views on the sustainability of the pension system.
_국민연금 김성주.jpg)
