7th Meeting of the National Pension Fund Management Committee in 2025

The National Pension Fund Management Committee (Chair: Jeong Eun Kyeong, Minister of Health and Welfare) held its seventh meeting of 2025 on Monday, December 15, at 4 p.m. at the Government Complex Seoul.

At the meeting, the Committee deliberated on and approved proposals to extend the temporary strategic FX hedging program for the National Pension Fund and to set the target excess return.

First, the Committee approved a proposal to further extend the adjustment period for the temporary strategic FX hedging ratio through 2026. In December last year, the Committee had decided to extend temporary strategic hedging through 2025 to prepare for potential FX losses stemming from exchange rate volatility and subsequent market adjustments.

Given that exchange rates have remained elevated this year, the Committee determined that an additional extension through next year was warranted. Accordingly, the National Pension Service plans to extend its FX swap agreements with the Bank of Korea through the end of 2026. The Committee also decided to establish flexible implementation measures to allow strategic hedging to be carried out adaptively in response to market conditions.

The Committee also deliberated on and approved the proposal to set the target excess return. The target excess return is the performance target set for the Fund Management Headquarters to achieve returns above the benchmark, and it is used as the evaluation criterion for relative performance under the performance-based compensation system. Taking balanced account of the need to generate excess returns and the continued uncertainty in global financial markets, the Committee approved the cumulative five-year target excess return for the 2022–2026 period at 0.248 percentage points.

In addition, the Committee discussed the background to the four-party consultative body’s discussions―involving the Ministry of Health and Welfare, the Ministry of Economy and Finance, the National Pension Service, and the Bank of Korea―as well as the direction of their joint research. The Committee decided that it will receive progress updates and that major policy initiatives will be pursued following the Committee’s deliberation and approval.

MOHW Minister Jeong Eun Kyeong stated, “I would like to express my appreciation to the members of the National Pension Fund Management Committee and the staff of the Fund Management Headquarters for their efforts to enhance fund returns amid challenging domestic and global financial conditions in 2025. I ask that you continue to deliver strong performance in 2026 by closely monitoring market conditions and responding in a timely manner.”

She further noted, “With the National Pension Fund now reaching approximately KRW 1,400 trillion, accounting for more than 50 percent of GDP, and expected to grow further following pension reform, there is a need to reassess the existing fund management framework.” She emphasized that, through research and discussions within the Committee, the government will work to develop approaches that safeguard the profitability of the National Pension Fund, a vital source of retirement security for the public, while managing its market impact in a balanced manner over the long term. 

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