The investment arm of South Korea’s National Pension Service (NPS), the world’s third-largest pension fund, has seen a sharp rise in the number of staff resigning since it announced plans to move to a city 200 km from Seoul by the end of this month.
Some 27 fund managers including the heads of overseas alternative asset investment and overseas stock investment have left or tendered their resignations so far this year, a source with direct knowledge of the matter told Reuters on Monday.
The source declined to be identified due to the sensitivity of the matter.
Last year, 30 fund managers quit the organisation, the highest yearly attrition ever, according to the Investment Management office.
“Many of the talent that have left are heads of offices, team leaders, who will be hard to replace,” said Shin Jhin-young, a Yonsei University professor and member of NPS’ investment management committee. “Plus, many of them were experienced in overseas investment and alternative assets, where NPS is trying to expand.”
NPS, which had 545 trillion won ($473.2 billion) in assets under management as of October 2016, employed 223 people in its Investment Management office in early January, the office said, down from about 300 people including about 220 fund managers in November.
The decision to move to Jeonju – with a population of 660,000 and three hours by rail and bus from Seoul – was announced in 2013 as part of an effort to decentralise government functions and boost regional development.
An NPS spokeswoman said the Investment Management office would do its best to ensure there were no issues in managing the fund and declined to comment on headcount.
Yonsei University’s Shin said the lower salaries of NPS fund managers compared with the private sector, and fund management officials recently under investigation over the pension fund’s decision to back the merger of two Samsung Group affiliates in 2015, may have affected staff decisions.
“To fundamentally solve these issues, the fund’s governance structure must change – the investment management side must be spun off into an independent organisation,” said Nam Chae-woo, research fellow at Korea Capital Market Institute.
Such a spinoff would require parliamentary approval and a change in the law, Shin said. The Investment Management office is now part of the larger National Pension Service, which is in turn overseen by the health ministry.
NPS’ former chairman Moon Hyung-pyo was arrested in the corruption scandal that led to President Park Geun-hye’s impeachment by parliament, on charges of abuse of power and perjury.
Moon was arrested after acknowledging to prosecutors that he had pressured the NPS to approve the merger of the two Samsung group units while he headed the health ministry, the special prosecutor’s office said in December.
However, Moon testified at Constitutional Court on Feb. 9 that he did not receive any orders or requests from the Blue House concerning the Samsung merger.