Gov¡¯t to up policy funds¡¯ stock investments to 25 tril. Won

The government announced Thursday that it would increase the portion of operational assets that the nation¡¯s four major pension and policy funds invest in the stock market from the present 11 percent to 20 percent over the next two to three years. The government plans to propose the measure, aimed at expanding the demand basis for the stock market, in a meeting with market representatives to be held Thursday at Cheong Wa Dae.

The four major pensions and funds are the National Pension Fund, the Government Employees Pension Fund, the Korea Teachers Pension Fund and the Post Office Insurance Fund. They currently have a combined 8 trillion won invested in the stock market, an amount that would climb to 25 trillion won by 2003, officials said.

By comparison, stock investments in Britain make up 66 percent of its pension and other funds. The figures in Canada and Japan are 29 percent and 19 percent, respectively. In the United States, state and local governments invest 64 percent of their pension funds in the stock market. Personal and corporate pensions also are reported to have 48 percent of their operational funds in stocks.

The Korean government also plans to establish an investment pool consisting of smaller pensions and funds that will serve as an institutional investor in the stock market. Officials acknowledged that major funds have difficulty investing in the market as they are mostly designed for certain public projects and thus have only small amounts of funds to spare.

Specific measures on the investment pool will be set by next month.

Yonhap