NPS Raises Domestic Equities Target Allocation from 14.9% to 20.8%

SAA Allowable Range Temporarily Expanded

The National Pension Service has increased its domestic equity holding target ratio by 5.9 percentage points for this year. While the allowable range for Strategic Asset Allocation (SAA) has been temporarily expanded, the specific figures will not be disclosed.

The National Pension Fund Management Committee held its 5th meeting for 2026 at 4:30 p.m. on May 28 at the Government Complex Seoul, where these decisions were made. At the meeting, the committee adjusted this year’s target ratios by asset class to reflect current realities and reviewed and approved the medium-term asset allocation plan for 2027–2031. The medium-term asset allocation plan is designed to enhance the profitability and stability of the National Pension Fund by determining the target ratios and management direction for each asset class—such as equities, bonds, and alternative investments—over the next five years.

Jung Eunkyung, Minister of Health and Welfare, is speaking at the 5th National Pension Fund Management Committee of 2026. Ministry of Health and Welfare

First, the committee adjusted this year’s domestic equity target ratio from 14.9% to 20.8%. This adjustment aims to improve the fund’s long-term profitability and stability and to mitigate the market impact from rebalancing, taking into account potential structural changes in the domestic equity market due to amendments to the Commercial Act and the actual increase in the domestic equity ratio. This target ratio will be applied starting at the end of June this year when the rebalancing grace period ends. Other asset class target ratios will also be adjusted accordingly as the domestic equity ratio is updated. For example, the target ratios are set at domestic equities 20.8%, overseas equities 34.7%, domestic bonds 23.1%, overseas bonds 7.4%, and alternative investments 14%.

In addition, to flexibly respond to the high volatility in the domestic equity market, the committee temporarily expanded the allowable SAA range for domestic equities. The committee also improved related regulations, such as reducing the maximum daily rebalancing amount, to strengthen stable fund returns while minimizing market impact. It was decided that the allowable range will be reviewed again at the end of this year, depending on market conditions. The allowable range will not be disclosed, as it could affect financial market stability.

Finally, the committee reviewed and approved the target ratios for each asset class for the period from 2027 to 2031. While maintaining the current trend of expanding overseas and alternative investments, the committee determined the five-year target ratios based on the characteristics of each asset class, market conditions, and feasibility. As of the end of 2031, the target ratios by asset class are approximately 55% in equities, 30% in bonds, and 15% in alternative investments. The detailed target ratios are not disclosed in accordance with the National Pension Act.

According to the medium-term asset allocation plan, next year’s domestic equity target ratio will remain at 20.8%, the same as this year. The target ratios for other asset classes have been set at 35.6% for overseas equities, 21.8% for domestic bonds, 7.4% for overseas bonds, and 14.3% for alternative investments.

Jeung Eun-kyeong, Minister of Health and Welfare, stated, "This medium-term asset allocation plan is a decision that enhances the long-term profitability and stability of the National Pension Fund while taking into account recent changes in market conditions and their impact on financial markets." She emphasized, "As the stable management of the National Pension Fund is a key task in safeguarding the valuable retirement savings of the people and supporting the fund's long-term fiscal stability, we will continue to closely monitor market conditions and ensure that fund management harmonizes principles with flexibility."

This content was produced with the assistance of AI translation services.