South Korea Pension Fund Launches CIO Search

South Korea’s 615 trillion won ($570 billion) National Pension Service (NPS), which claims to be the third-largest pension fund in the world, has reportedly launched its search for a new CIO to replace Myoun-wook Kang, who resigned seven months ago. The fund’s current acting CIO is In-Sik Cho.

The pension fund has established a search committee that will accept applications from interested candidates until March 20, according to Asia Asset Management. NPS CEO Sung-joo Kim said the person who is chosen should have “high moral standards” and “global investment capabilities.”

The search committee will create a short list of applicants, and then recommend a candidate to Kim, who will then need the approval from South Korea’s minister of health and welfare. Kang resigned in July for personal reasons, seven months before his two-year term was set to expire.

Since the pension fund moved its headquarters last year from Seoul to Jeonju-si, which is more than 100 miles away, it had lost a significant number of employees who grew weary of the long commute. It reportedly took three hours to travel to Seoul from the new office for meetings with clients and external managers.

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The National Pension Fund has recorded a 5.86% annual average rate of return since its foundation in 1999 to the end of 2016.

Meanwhile, South Korean news agency Yonhap reported that a growing number of people are applying to re-subscribe to the state pension plan after being disqualified due to failure to meet mandatory policy terms or other reasons.

As of Feb. 9, nearly 15,000 people have applied to return the lump-sum insurance payouts they received because they failed to pay premiums for a mandatory period, according to NPS data. The return system allows applicants to pay back the insurance money plus interest to the state pension to regain eligibility.

Tags: CIO Search, Myoun-wook Kang, National Pension Service (NPS), Pension, South Korea

In a letter to the UK Universities Minister Sam Gyimah, Liberal Democrat party leader Vince Cable demanded the government get involved in the negotiations of the pensions of striking professors.

“As you are aware, university lecturers have started 14 days of strikes due to drastic changes to their pensions,” the letter began, noting the £6 billion-£7 billion deficit the Universities Superannuation Scheme (USS) currently faces and that it is indeed a priority. “However, this does not necessitate the drastic action being taken—particularly given there are question marks over how the deficit has been calculated—notably a shift of the risk burden on to employees.”

The reason professors part of the University and College Union (UCU) are on a 14-day strike as of Thursday is because of changes the USS made to its defined benefit plans in January, which the union says would reduce benefits for a regular professor by £10,000 per year, with even worse repercussions for younger lecturers.

Changes to the scheme include switching its members from a defined benefits plan to a defined contribution, with significant employer and member contributions to gradually make up the difference in the scheme’s liabilities.

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The union also does not agree with the USS’s proposed deficit, calling the scheme’s evaluation method “recklessly prudent.”

In the letter, Cable, who identified himself as a USS member and former academic, called for the government to get involved in the underwriting of the USS to de-risk the plan, alleviate concerns, and guarantee the safety and protection of the affected members.

“To alleviate the concerns and de-risk the scheme, the Government must move to underwrite the Universities Superannuation Scheme, providing academic staff with guarantees that their pension will be safe at the expected level,” Cable wrote. “Not only would this provide the fund with the certainty the more fiscally conservative institutions are worried about, it would also put the scheme in line with universities set up after 1992.”

“One part of the university sector should not be treated differently to another,” Cable added.

Universities UK, the advocacy group for UK colleges, is set to meet with the union to discuss the future of the USS Tuesday, with preconditions that the union feels will not allow them to discuss “the very reason for the strike.”

Last week, the group published an open letter to the union detailing that they had been in talks over the past year regarding the pension changes with no agreements made.

Gyimah had previously cited concerns regarding the strikes, calling on both sides to negotiate without any preconditions.

“I am speaking to both Universities UK (UUK) and the University and College Union (UCU). I call on them to get back to the negotiating table, without preconditions, to find a solution that avoids further disruption to students,” he tweeted in a Thursday statement. “Where any strike action takes place, we expect universities to keep a close eye on the impact on students, and to put in place measures to maintain the quality of education that they should receive.”

Tags: Pension, Sam Gyimah, strikes, UK Universities, Universities Superannuation Scheme, University College Union, Vince Cable