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Wanted: an investment leader

July 06,2018
The National Pension Service (NPS), the third largest pension fund in the world, has been without a chief investment officer (CIO) since July. Its hiring that began through a public placement in February flopped as the organization could not make a choice from three shortlisted finalists.

One of the finalists claims to have bid for the position at the recommendation of Jang Ha-sung, President Moon Jae-in’s policy chief. He was dropped despite having received the highest scores in the final interview. The NPS declined to comment why it concluded that Jang was not qualified.

Some suspect meddling from the Blue House or internal struggle. The position, responsible for overseeing nearly $600 billion in assets, has been vacant since former CIO Kang Myoun-wook resigned in July. Cho In-sik, the head of the NPS’s offshore securities division, who had been the acting CIO, recently offered to resign. If he walks out, three of the state fund’s eight senior positions will be empty. The three vacant positions are in offshore securities, alternative investment and stock operation.

The CIO is responsible for the country’s quickly-expanding senior population, with 635 trillion won ($567 billion) under the fund management as of the end of April. The commander must design investment strategy against a fast-changing and fluid international financial environment to ensure high returns for the country’s future in an aged society. Although he is under the NPS chief, CIO is the “commander-in-chief” in investment. He chairs all internal committees reviewing and deciding where to put money.

If the position is left vacant much longer, fund operators will not be able to make timely — and decisive — investment moves. Pensioners and their senior age security are at risk. The NPS has been shaken by the criminal investigation and trial over its involvement in the merger of Samsung units in connection with bribery charges for former President Park Geun-hye. The headquarters were moved out of the capital and the morale of employees has hit rock bottom. The lengthy absence of the CIO cannot put the overall management of the pension fund and system at risk.

JoongAng Ilbo, July 5, Page 30