South Korea’s National Pension Service was sharply criticized in parliament
after pausing domestic equity rebalancing on Jan. 26, a move lawmakers say
allowed foreign investors to sell into rising prices and left retail holders
exposed. The pause preceded a KOSPI rally — crossing a 5,000‑point political
benchmark and later topping 8,000 — during which the fund’s domestic equity
weight exceeded its prescribed limit. At end‑May the fund’s operations committee
raised the domestic equity target to 20.8% from 14.9% and widened the strategic
allocation band from ±3ppt to ±6ppt, allowing a domestic equity ceiling of 28.8%
— a change critics say effectively restricts rule‑based sell‑downs even if the
KOSPI remains in the mid‑to‑high 8,000s. Opposition lawmaker Lee Dae‑hee called
the NPS “a cash machine for foreign investors,” underscoring political scrutiny
of the fund’s trading and allocation decisions.
