National pension voting rights, transfer to private asset management companies plan... Improve investment efficiency

The Ministry of Health and Welfare has decided to promote a plan to transfer voting rights in domestic stock investments of the National Pension to private asset management companies. This is a strategic move to expand the responsibilities of the pension trustees and improve efficiency.

On March 5th, the Ministry of Health and Welfare held a Fund Operations Committee meeting at the government’s Seoul office to discuss the “Activation Plan for Trustee Responsibilities in Domestic Stock Delegated Operations.” Under this plan, a pilot program will be launched to accept a new approach, where private operating companies entrusted with managing the National Pension funds will play a larger role in exercising voting rights. Previously, voting rights were mainly exercised by the Fund Operations Department, but moving forward, entrusted operating companies will directly exercise voting rights for the shares they hold.

Currently, among the 599 companies where the National Pension exercises voting rights in domestic stocks, about half are managed by the Fund Operations Department, and the remaining half are exercised by entrusted operating companies. Under the revised plan, the entrusted operation method will shift from “full investment delegation” to a “separate fund” structure, aiming to enable operating companies holding shares to directly exercise voting rights.

This plan will initially be implemented in departments focused on ESG (Environmental, Social Responsibility, and Corporate Governance) responsible investment. Since ESG factors can maximize long-term corporate value, this initiative is also expected to contribute to the quality development of the asset management industry.

The Ministry of Health and Welfare also plans to strengthen the management system for trustee responsibility activities of operating companies. The goal is to clarify evaluation standards and actively reflect inspection results in fund allocation or recovery, thereby enhancing execution capability.

This new plan is expected not only to improve the investment returns of the National Pension but also to promote the quality development of the capital market. It will be interesting to observe how this change impacts the asset management industry and the National Pension in the future.