Fund management principles factored into target adjustment

Rebalancing suspended in January resumed from July 1

Meeting minutes kept private to limit market impact

Deputy Prime Minister and Minister of Economy and Finance Lee Hyung-il said Thursday that raising the national pension fund's target allocation for domestic equities was "not done for the purpose of short-term market support or share price defense."

Lee made the remarks at a comprehensive national audit session of the National Assembly's Finance and Economy Planning Committee, responding to People Power Party lawmaker Kim Sang-hoon's assertion that increasing the domestic stock target had raised the fund's investment risk. Lee said the decision was made "by looking at market conditions, fund management principles, and various other factors together."

Deputy Prime Minister and Minister of Economy and Finance Lee Hyung-il answers questions at the 2026 comprehensive national audit of the National Assembly's Finance and Economy Planning Committee on Thursday. [Yonhap]
Deputy Prime Minister and Minister of Economy and Finance Lee Hyung-il answers questions at the 2026 comprehensive national audit of the National Assembly's Finance and Economy Planning Committee on Thursday. [Yonhap]

Lee said the sharp rally in domestic stocks had made it difficult to maintain the existing asset allocation targets. "Domestic stocks rose very rapidly from the second half of 2025, so we suspended rebalancing in January this year," he said. "Around May, we decided to end the suspension and normalized it from July 1."

He said that had the domestic stock target not been adjusted upward, the resumption of rebalancing would have triggered large-scale selling. "If we had not raised the target, the target would have been too low while domestic stocks had already risen significantly, and we judged that continuing on that path would lead to a sharp wave of selling," Lee said.

Lee also addressed questions about his attendance at meetings of the Fund Management Committee. Kim said Lee had attended the committee session that discussed raising the domestic stock target while skipping other meetings during his tenure as first vice minister of the Ministry of Economy and Finance. Lee rebuffed the claim, saying the committee discusses target allocations every May and that the first vice minister has attended every year.

On the decision to keep the meeting minutes private for four years, Lee said the annual non-disclosure decisions were made "because the contents could affect the market."


y2k@heraldcorp.com