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KMID : 1124020180340010167
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Korean Social Security Studies
2018 Volume.34 No. 1 p.167 ~ p.191
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A Reform Plan of National Pension Fund’s Governance toward Independence and Accountability
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Won Seung-Yeon
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Abstract
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This paper evaluates the current governance of Korea National Pension Fund(NPF) and then suggests the reform plan on NPF’s governance structure. The approach starts from the basic principle that the public pension funds including NPF should be managed for only the participants who are both the residual claimants and beneficiaries of funds. It implies that the governance of NPF should hold the independence and accountability in managing the funds for beneficiaries. However, the current governance structure is lack of both independence and accountability because the government authority, the ministry of health and welfare, is executing the function as a trustee as well as a truster of NPS. This paper suggests the reform plan as follows: First, the government should establish independent asset management agency whose governance is established by the process independent off the bureaucracy. Second, the agency’s public accountability should be effective controlled by the law, not the composition of agency. Instead, the governance should be established by the members having expertises. Third, the agency should be responsible for all the investment process, whereas the Ministry of Health and Welfare function as agency of truster, not involving the management of NPF. Fourth, the principle of fiduciary duty should be adopted as a rule which can regulate all the related persons.
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KEYWORD
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Fiduciary Duty, Governance, Independence, National Pension Fund, Trustee
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