South Korea’s National Pension Service (NPS) has partially changed operational rules for its overseas offices in a move seemingly intended to strengthen their capability by attracting talented staff.
The nation’s largest public pension fund has made changes to its overseas office operational rules last month, sources familiar with the matter said on April 8. It revised the Article 8 of the rules, which consists of two paragraphs specifying matters in respect to the work period of overseas staff and their retirement in the middle of the work period.
According to paragraph 1 of the article, employees assigned to one of the pension fund’s overseas offices should work there for three years in principle, but their work period can be extended for up to additional two years by the head of the office if deemed necessary for management.
Paragraph 2 of the article requires overseas employees who voluntarily retire in the middle of the work period to pay back to the pension scheme the entire costs relating to their overseas assignments, such as expenses of flight tickets, moving expenses and visa application fees.
With the revision this time, the pension scheme removed the second paragraph of the article as a whole, meaning that it would no longer punish its overseas employees for quitting in the middle of their work period.
The move came after the pension fund had changed its operational rules in August last year to add a new rule that allowed chair of the pension fund to determine compensation for its fund managers working at overseas offices. This change is seen as part of efforts made by the pension scheme to attract and retain talented local staff.
Such moves are consistent with the NPS’ long-term strategy to increase overseas investments in search of higher returns. The pension fund aims to increase its allocation to overseas markets to 50 percent of its total assets under management, from about 34 percent as of October 2019.
The NPS operates overseas offices in New York, London and Singapore. It plans to expand their role gradually from supporting investment activities in their respective region to performing investment activities on their own.
(By reporter Han Hee-yeon)