A war of words seemingly triggered by government plans to turn the investment office of Korea’s National Pension Service into a state-run corporation has spilled into the public domain, exposing divisions in the halls of power.
At the heart of the dispute lies NPS chairman Choi Kwang and health and welfare minister Chung Chin-youb. The media has reported increasingly acrimonious differences of opinion between the two.
The situation has emerged just days before the $418 billion pension is due to host a gathering of overseas VIPs at the International Conference for NPS Fund Management in Seoul on October 29.
According to reports, the origins of the spat lie in Choi’s move to reject the contract extension of NPS’s chief investment officer Hong Wan Sun for a further year.
It is understood that Choi (pictured) notified Hong of his decision on October 12. Hong’s two-year tenure is due to expire on November 3, when his term will terminate if no extension is forthcoming.
But Chung has accused Choi of overstepping his remit as chairman by not referring this decision to the health and welfare ministry, which oversees and regulates the fund.
At a health and welfare committee meeting of the National Assembly on October 22, Chung has been quoted as saying: “Chairman Choi should have had discussions with the ministry over Hong’s reappointment prior to his decision. He should take full responsibility for not asking for our agreement regarding the matter.”
The minister added: “Reappointment is a matter that requires objectivity and transparency, but chairman Choi made his own unilateral decision to reject the extension of CIO Hong’s tenure without seeking my agreement.”
Chung has said he will press the chairman to resign, but in an interview on October 21 Choi is quoted as saying: “I have never exceeded my authority or challenged the order of the ministry. I will not resign voluntarily.”
It has been reported that Choi had told Chung on October 20 that he would step down after hosting the International Conference for NPS Fund Management, set for later this week.
Choi subsequently told media on October 23: “I offered a proposal to the ministry. I will decide whether I stay or leave after receiving the ministry’s reply. I also made another proposal to the ministry to wait until my schedule for the international conference is finished.”
As such, it appears the ministry is anticipating that Choi will step down of his own accord. However, the chairman's apparent determination not to go quietly threatens to prolong this dispute, since his term of office is not due to expire until May next year.
What could be at the heart of this bad blood is Choi’s opposition to government plans to turn NPS’s investment office into a state-run enterprise. Government officials have criticised Choi over his position, again seeing this as overstepping his mandate.
Choi told a news agency on October 21: “If I accept the ministry’s request for resignation, this could cause an acceleration of corporatisation of the fund investment office. This is a concern for me.”
Chung officially announced that “the government’s plan is to turn the [NPS’s] fund investment office into a state-run corporation” at a press conference on October 20.
The following day, the deputy prime minister and minister of strategy and finance, Choi Kyung-hwan, told media: “We will make sure that independence and professionalism will be guaranteed for managing the National Pension Fund of Korea by accelerating the corporatisation.”
As a last resort the ministry could recommend Choi’s dismissal to the country's president, Park Geun-hye. But one ministry official told media: “We are still putting more weight on his [Choi’s] voluntary resignation.”