Korea JoongAng Daily - Daily News from Korea

Han Byung-do, floor leader of the Democratic Party (DP), said Wednesday that the ruling party would ensure the second half of the 22nd National Assembly would function according to the principle of a "working Assembly" and would not allow parliamentary procedures to become tools for obstructing state affairs. Regarding the chairmanship of the Legislation and Judiciary Committee, traditionally one of the most contested posts during negotiations over Assembly leadership, Han added that he had "no intention" of yielding the position to the opposition People Power Party.

His remarks followed controversial comments by DP leader Jung Chung-rae, who recently said he had even considered taking all standing committee chairmanships for the ruling party during negotiations over the Assembly's second-half structure. Han himself had previously made remarks to a similar effect. Meanwhile, Cho Jeong-sik, recently selected as the DP's candidate for National Assembly speaker, also stirred controversy after saying he would prioritize speed over bipartisan cooperation in passing legislation tied to the government's agenda.

The DP's heavy-handed operation of the Assembly is hardly a new phenomenon. Still, such comments emerging even before formal negotiations over committee assignments have begun are deeply concerning. They suggest the ruling party views the opposition not as a partner in dialogue aimed at finding broadly acceptable compromises, but as an obstacle blocking the government's agenda.

Attempting to exclude the opposition merely because it opposes government policies or legislation is a classic feature of majoritarian dominance. It also conflicts with the parliamentary democratic principle of checks and balances.

Under the National Assembly Act, a party holding a majority of seats can theoretically monopolize all 18 standing committee chairmanships. Yet previous Assemblies distributed those positions between ruling and opposition parties according to seat ratios and often assigned the Legislation and Judiciary Committee chairmanship to the opposition. The practice reflected a parliamentary belief that power subject to oversight ultimately benefits both the public and the state.

When political conventions are overturned through numerical strength alone, the harmful consequences of unchecked power inevitably follow. The DP itself recently experienced such backlash when it aggressively pushed a special counsel bill on alleged prosecutorial manipulation, only to face criticism that it was intended to help cancel the president's criminal indictment. The party was ultimately forced to retreat.

A truly "working National Assembly" begins with recognizing the opposition and engaging in deliberation together. Speed alone cannot justify excluding dissenting voices. One-sided rule and legislative efficiency are not synonymous.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.

This article is by Lee Jae-lim and read by an artificial voice.

After marathon talks between Samsung Electronics' management and labor fell apart Wednesday, a planned 18-day strike due to start Thursday moved closer to reality. The country's labor minister directly joined mediation efforts for the first time on Wednesday, but no agreement had been reached as of press time.

As talks continue, all eyes are on whether the government will invoke its emergency arbitration powers, a last resort that could prevent the strike from snowballing into substantial economic damage, should negotiations fail.

That decision remains uncertain. The government is concerned that wielding this rarely used power, which can ban all collective action for 30 days, could set a negative precedent. During this period, a government body would conduct mediation.

"The government will provide maximum support, unconstrained by formalities, to ensure the matter is resolved through autonomous labor-management negotiations until the very last moment," a Ministry of Employment and Labor spokesperson said, drawing a clear line on the question of emergency arbitration, adding that it was "too early to speak to that specifically."

Any disruption to semiconductor production could ripple far beyond Samsung, affecting the country's exports as well as major clients such as Nvidia, Apple and Google.

At the heart of the dispute is how bonuses are distributed across Samsung's three different semiconductor units, which cover memory, chip manufacturing and chip design. Of the three, only the memory division is currently profitable, riding the AI-driven surge in demand that has Big Tech lining up to secure supply.

The bone of contention is whether a common pool of special bonuses — shared across the entire semiconductor division — should be large enough to give employees in loss-making units payouts comparable to those in the profitable memory unit. The union agreed to the ratio proposed by the government mediator, but management rejected it, arguing that it violates the company's core principle of tying rewards to performance.

The production of high bandwidth memory (HBM), which is a key component powering global AI infrastructure, is of the greatest concern should the strike proceed.

Choi Seung-ho, head of the Samsung Electronics chapter of the Samsung Group United Union, confirmed the walkout was going ahead as he left the post-mediation session at the National Labor Relations Commission (NLRC) office in Sejong.

"The union will proceed as planned and lawfully launch a general strike," Choi said. "We wish to make clear that even during the strike, we will not cease our efforts to reach a settlement." He emphasized that the union had agreed to the mediator's proposal — it was management that walked away.

Samsung, for its part, said the breakdown is deeply regrettable, but stood firm. The union's demand to set aside a significant portion of bonuses for loss-making divisions "directly contradicts" its performance-based management principle, the company said.

"The company has determined that abandoning this principle would have an adverse impact not only on Samsung Electronics, but on other companies and industries as well," it added. "Nevertheless, Samsung Electronics will continue its efforts to resolve this matter until the very end, whether through additional mediation or direct dialogue with the union."

Industry observers are estimating losses resulting from the walkout, scheduled to run through June 7, to reach up to 100 trillion won ($66.3 billion) as semiconductor production grinds to a halt. The ripple effects would extend beyond Samsung itself, affecting the broader ecosystem of parts, materials and equipment suppliers that depend on it, and weighing on Korean exports overall.

A court has already granted management an injunction limiting the scope of industrial action, requiring workers to maintain normal staffing levels at safety facilities and in processes that ...

This article is by Cho Jung-woo and read by an artificial voice.

International students and foreign job-seekers in South Gyeongsang can now receive up to a 13 percent discount on Express Mail Service (EMS) at post offices across the province.

The South Gyeongsang provincial government announced Wednesday that it signed a memorandum of agreement with the Korea Post's Busan Regional Communications Office to offer discounted international shipping fees for foreign students.

Holders of D-2 (student), D-4 (general training) and D-10 (job-seeker) visas living in the province are eligible for the benefit. To receive the discount, eligible residents only need to present their residence card at a local post office, and a student ID is not required, the provincial government said.

Those shipping via EMS or EMS Premium at post offices within the region will receive a base discount of 10 percent. An additional 3 percent discount will be applied if users preregister online through the post office website or mobile application.

EMS handles international packages weighing up to 30 kilograms (66 pounds) to 103 countries, while EMS Premium ships packages weighing up to 70 kilograms to 184 countries.

Under the new policy, for example, sending a 10-kilogram EMS package to Vietnam, which normally costs 49,000 won ($36), will be discounted by 13 percent, saving the sender 6,370 won. However, extra freight surcharges may still apply separately.

This article is by Kim Yeon-joo and read by an artificial voice.

Profit-sharing demands are sweeping Korea's biggest conglomerates. Unions at Samsung Electronics, LG U+, Kakao and HD Hyundai Heavy Industries have all pressed this year for a fixed share of operating profits as bonus pay.

While unions secured stronger legal protections when the "Yellow Envelope" law took effect in March, the latest demands can't be entirely pinned on the legislation. But some labor lawyers say the law has made it easier for unions to escalate such demands into legal strike action, raising concerns that a measure originally pitched as protection for subcontractor workers is being put to use by big-company unions.

The law's original aim was to widen the legal definition of "employer" under the Trade Union and Labor Relations Adjustment Act. The change was meant to give subcontractor unions a real bargaining counterpart and ease the Korean labor market's dual structure, where workers at large conglomerates enjoy strong union protections and stable employment while those at subcontractors and smaller firms have far fewer rights and little bargaining power. But the amendment also added "management decisions that affect working conditions" as a legitimate cause of labor disputes, and major company unions have been quick to use it.

"In the past, there were different views on whether performance bonuses should be classified as part of working conditions or as a management decision," said Lee Kwang-sun, an attorney at Yulchon law firm.

"But now that the Yellow Envelope act has expanded the scope of labor disputes, performance bonuses are also more likely to become legitimate subjects of collective action. We're already seeing various management-related demands appear on union agendas," Lee explained.

Korean labor law distinguishes between two categories in labor-management negotiations. One covers issues that can lawfully trigger a strike if negotiations break down, while the other concerns issues that can be discussed in talks but are not legitimate grounds for a strike.

Whether performance bonuses count as wages and working conditions or as a matter of management's authority has been contested in practice. If classified as the former, a standoff on bonuses can legally result in a strike. If treated as the latter, they sit closer to the issues that may be open to a legal challenge over a strike.

As the Yellow Envelope law broadens the definition of labor disputes, experts say not just performance bonuses but matters that touch on management decisions can now form the basis for a legitimate protest.

"In the past, there was room to challenge the legitimacy of a strike based on a management decision like performance bonuses," said Park Ji-soon, a professor at Korea University School of Law.

"But with the Yellow Envelope law in place, industrial action that used to be limited to improving working conditions is now being expanded to cover the distribution of excess corporate profits and even areas of management judgment."

The demands have been concentrated at conglomerates with strong recent earnings, which makes it difficult to directly blame the Yellow Envelope law, but the legislation has played a significant role in pushing those demands to the brink of strikes, Park said.

The union at Samsung Biologics has asked the company to set up a joint labor-management council and proposed a collective agreement that would require the council's approval on matters such as introducing new machinery and technology as well as changes to work processes. Hyundai Motor's union has included guarantees on employment and working conditions after AI-based production lines are introduced as part of this year's wage and collective bargaining demands. The HMM union is raising the possibility of invoking the law in the planned relocation of the shipping line's headquarters, arguing that the move has a big impact on working conditions.

Not every legal expert agrees that pe...

This article is by Kim Ji-hye and read by an artificial voice.

Christian Dior Couture Korea is facing a criminal complaint after a customer discovered that a limited-edition handbag had been outsourced to a local Korean repair shop, despite assurances from the luxury brand that the work would be done at its Paris headquarters.

PJ Law Group said Wednesday it filed a criminal complaint with police on behalf of the customer, alleging fraud and property damage. The complaint names the head of Christian Dior Couture Korea, a representative at the brand's outlet inside a department store in Gangnam District, southern Seoul, and a representative from the Korean repair company.

The Dior sales associate allegedly told the customer in December 2024 that the bag would be sent to Paris, but instead handed it off to a third-party Korean repair shop.

The repair shop is also accused of damaging the bag by relocating decorative beads on its exterior without the customer's consent.

The customer bought the bag in 2016 for about 7 million won ($4,620) and was told at the time that it was the only one of its kind imported to Korea. After more than eight years of use, a few beads came loose, and the customer brought the bag to a Dior store for repair.

After the repair stretched past a year, the customer contacted the store on Feb. 24 to ask what was happening. The next day, the store returned the bag and said the repair was finished.

About a month later, on March 23, the customer spotted a video on a Korean repair shop's social media account showing the bag being worked on. When the customer raised the issue with Dior, the company acknowledged that the bag had never been sent to Paris and had been repaired by a Korean third-party contractor.

The law firm said it plans to use the police investigation to determine where and how the bag was kept during the 14-month repair period and to file additional charges if other violations come to light.

It also reported Dior to the Fair Trade Commission for allegedly violating the Act on Fair Labeling and Advertising.

Under Dior's after-sales service terms, the company is required to have an expert inspect the item, determine whether the defect falls within warranty coverage and inform the customer about the feasibility, estimated cost and timeline of the repair before obtaining consent to proceed.

The law firm claims the Dior sales associate bypassed those steps and unilaterally told the customer the bag would be repaired in Paris.

Dior could face fines if the Fair Trade Commission concludes that it violated the law.

"In addition to the police complaint and the Fair Trade Commission filing, we will continue follow-up actions, including sending a formal notice to Dior's Paris headquarters about the seriousness of this case," a PJ Law Group representative said.

This article is by Kim Ji-ye and read by an artificial voice.

Starbucks Korea's controversial "Tank Day" promotion ended shortly after it was accused of using inappropriate language referring to the May 18 Gwangju Democratization Movement and the military dictatorship.

Public backlash quickly escalated. Even President Lee Jae Myung condemned the campaign as "the inhumane behavior of lowlife profiteers."

The two phrases at issue were the promotional campaign title "Tank Day" and the slogan "Tak! on the desk," which many criticized for mocking the uprising.

But why are Koreans reacting so strongly to the phrases used in the campaign, and what historical background underlies it?

What is the May 18 Gwangju Democratization Movement ?

The democratic uprising in Gwangju was a pro-democracy movement that was staged from May 18 to May 27, 1980.

The uprising began with citizens protesting against martial law imposed by the military regime led by Chun Doo Hwan following a military coup on Dec. 12, 1979, to seize power in Korea. After consolidating control, he expanded martial law, ordering universities to close and banning all political activities, rallies and demonstrations. The regime also suppressed political opposition.

As military forces violently cracked down on demonstrations, residents of Gwangju organized armed resistance against the troops.

The military responded by deploying tanks and opening fire on civilians, resulting in a massacre that left hundreds dead or injured, although the exact number of victims remains disputed.

The event later became a symbol of Korea's democratization movement and is widely regarded as a pivotal moment in the country's struggle for democracy and human rights.

Why is Starbucks Korea receiving backlash?

The coffee franchise ran a promotional event offering discounts on its Tank tumbler lineup.

The wording used in the promotional materials drew fierce criticism, with many accusing the company of mocking the Gwangju Democratization Movement.

The word "Tank Day" was displayed alongside the date May 18, which many said evoked memories of the military regime's violent suppression of civilians using mechanized units.

The use of the word "tank" also drew scrutiny because it is used in far-right online communities as a nickname for Chun. The far-right online community Ilbe, also known as Ilgan Best, often refers to Chun as "Chun Tank."

Where does "Tak! on the desk" come from?

Criticism also followed over the phrase "Tak! on the desk."

The outrage drew comparisons to the false explanation given by then-National Police Headquarters Chief Kang Min-chang after the 1987 torture death of student activist Park Jong-cheol.

At the time, Kang falsely claimed that Park "died with an 'ugh' after a 'tak' on the desk." Tak is a Korean onomatopoeia used to describe a sharp sound, often from one object hitting another, similar to the English language's "bang."

Park, a Korean university student, was arrested by police in January 1987 during investigations into pro-democracy activists. While being interrogated, he was tortured by the police and died in custody.

Many users criticized the coffee chain's slogan for mocking the historical tragedy.

How did Starbucks Korea respond?

In response to the criticism, Starbucks Korea CEO Sohn Jeong-hyun was dismissed on Monday.

Following the dismissal, Shinsegae Group Chairman Chung Yong-jin issued a public apology on Tuesday. Starbucks Korea is an affiliate of Shinsegae Group.

"Yesterday, the day that marked the 46th anniversary of the May 18 democracy movement, Starbucks Korea started an inappropriate and unacceptable marketing campaign that should never have taken place," he said.

"This was an inexcusable wrongdoing that trivialized the pain and sacrifice of everyone who devoted themselves to advancing democracy in this nation," he continued. "I recognize that the responsibility for this lies entirely with me, and I know no explanation can justify it."

Shinsegae Group Vice Pr...

This article is by Kim Jung-seok and read by an artificial voice.

The summit between Korean President Lee Jae Myung and Japanese Prime Minister Sanae Takaichi on Tuesday could make Korean chicken even more famous — but not the crispy, fried one this time.

After their afternoon summit talks, the two leaders are set to dine together, with jeongyea as the main course.

Jeongyea is a dish prepared by sautéing a young chicken with yams, carrots and scallions in sesame oil until golden, then braising it in a savory soy sauce mixture. Today's Andong jjimdak, a popular soy-braised chicken dish that can be served spicy or sweet, is believed to have evolved from jeongyea.

The dish was reserved for honored guests in aristocratic households and traditionally eaten to restore stamina and appetite in summer, especially in the inland region.

Its recipe is believed to have originated during the Joseon Dynasty (1392-1910) and is recorded in the " Suunjapbang," Korea's oldest surviving cookbook. The text is believed to have been written between the 16th and mid-17th century.

Takaichi will become the first foreign leader to be served a main dish drawn from a Joseon-era culinary text at an official summit dinner.

Japanese Prime Minister Takaichi arrived in Korea on Tuesday afternoon and is set to stay for two days. Her visit to Andong, North Gyeongsang, is a continuation of bilateral "shuttle diplomacy," as the frequent summits between the two neighboring nations are called. During Tuesday's summit, Lee and Takaichi are expected to discuss ways to further deepen bilateral relations and coordinate measures to address the ramifications of the Iran war as partners in the Indo-Pacific.

Jeongyea also reflects Korea's customary courtesy toward foreign guests. As the dish predates the arrival of chili peppers on the Korean Peninsula, it delivers a mild, more restrained flavor, which is expected to suit the Japanese prime minister's tastes better.

The banquet will be prepared jointly by Kim Do-eun, who oversees Rakkojae Hanok Hotel's "Suunjabbang Heritage Dining" program, and the Westin Josun Seoul's culinary team. Together, they are expected to blend the rich depth of traditional Korean flavors with contemporary haute cuisine techniques.

Alongside jeongyea, guests will be served grilled Andong hanwoo (Korean beef) short ribs and sinseollo, a traditional hot pot filled with vegetables and seafood, symbolizing harmony and exchange.

Dessert will bring together Korean jeonyak (jelly) and Japanese mochi on a single plate. The drinks menu will feature Andong's traditional liquors, taesaju and Andong soju, alongside sake from Nara Prefecture, the hometown of Japanese Prime Minister Takaichi.

In Andong, interest in Tuesday's dinner stretches far beyond the world of diplomacy.

In the famed alley in the city's old market, where eateries selling jjimdak are clustered, merchants are hopeful that the dinner will spark worldwide curiosity about their local specialty.

Local jjimdak establishments have suffered since deadly wildfires tore through the North Gyeongsang region in March last year, depressing tourism.

"After the fires last year, there were hardly any customers, even on weekends," said Lim, a 59-year-old jjimdak restaurant owner in the market.

Ahead of the summit, merchants' optimism has grown. Their hopes are not unfounded, as Gyeongju, North Gyeongsang, saw renewed popular interest after Chinese President Xi Jinping praised its local specialty, Hwangnam bread, a small pastry filled with red bean paste, while visiting the city for the Asia-Pacific Economic Cooperation summit in October of last year.

President Lee's visit to Andong's old market on Monday, a day before the summit, also heightened hopes that the city could rebound and become a center of culinary trends.

"Things were finally beginning to recover," Lim said. "Now the president has visited, and a chicken dish from Andong will be served at the summit dinner. It is uplifting news for people he...

This article is by Sarah Chea and read by an artificial voice.

[NEWS ANALYSIS]

The blockade of the Strait of Hormuz has laid bare Korea's acute vulnerability in energy security — arguably the most exposed among major Asian economies.

While Korea scrambled to secure crude oil and LNG supplies, neighboring Japan — whose energy self-development rate is more than four times higher — was likely far less rattled. China, meanwhile, is in an entirely different league as a major energy producer itself.

Despite facing similar resource constraints as Korea, Japan has built greater resilience through aggressive overseas equity investments and diversified procurement channels, allowing it to maintain relatively stable energy supplies during the latest crisis.

Energy experts warn that Korea remains dangerously fragile in terms of strategic energy security, and as the rivalry between the United States and China intensifies, strengthening the nation's energy self-sufficiency is no longer optional but essential.

Korea lags in Asia

Korea's energy self-development rate — the share of oil and gas secured through domestic companies' overseas and local production relative to total imports — stood at just 10.8 percent in 2024, according to data from the Ministry of Trade, Industry and Resources.

This was down from 15.5 percent in 2015.

By contrast, Japan raised the ratio from 27.2 percent to 42.1 percent over the same period. Tokyo aims to push the figure to 60 percent by 2040, according to data from Japan's Ministry of Economy, Trade and Industry.

Both Korea and Japan are manufacturing powerhouses in sectors such as automobiles, semiconductors and petrochemicals, yet remain overwhelmingly dependent on imports for the oil, natural gas and critical minerals needed to sustain those industries. To hedge against supply risks, they pursue equity-based resource development by investing in large-scale overseas energy projects operated by global oil majors such as ExxonMobil and Shell, or by partnering directly with host governments to secure production stakes.

Japan has been particularly aggressive in expanding its LNG self-development capacity, with Australia accounting for roughly 40 percent of its natural gas imports. Much of that supply comes from projects they have stakes in, including the Ichthys LNG Project.

Although Japan joined Western sanctions against Russia, it has continued importing LNG from the Sakhalin-2 project, in which Japanese firms have held equity stakes since the early stages of development. Sakhalin-2 accounts for roughly 10 percent of Japan's LNG imports.

Australia is also central to Korea's overseas energy investment strategy, where Korea Gas Corp. holds a 15 percent stake in the GLNG Project, a massive liquefied natural gas development from which Korea has imported roughly 3.5 million tons of LNG annually under a 20-year supply agreement that began in 2016.

In the case of crude oil, Japan's dependence on the Middle East stands at about 95 percent, even higher than Korea's 70 percent. Yet Japan has secured key equity stakes in offshore oil fields in Abu Dhabi, allowing it to produce and procure substantial volumes directly from the region.

"Japan's primary exposure to Middle Eastern fossil fuels may be greater, but when measured across resilience indicators such as self-development rates, refining autonomy, strategic reserves and alliance-based resource networks, Korea remains the most vulnerable among major East Asian economies," said Cho Hong-chong, an economics professor at Dankook University.

Japan surpassed its 2030 target for oil and natural gas self-development — reaching 40.6 percent in 2020 against a goal of 40 percent — and raised its target to above 50 percent. Japan is also the only Group of 7 country that provides large-scale public financing for overseas resource development projects, with much of the support funneled through the Japan Organization for Metals and Energy Security, or Jogmec.

China, meanwhile, as ...

The author is a playwright and director.

"Jellyfish," a play about love and self-determination among people with developmental disabilities, recently won a Baeksang Arts Award after earlier receiving the Dong-A Theater Award in 2025.

The consecutive honors marked a turning point for disability theater, long treated as a marginal genre in Korea. They reflected not only growing public awareness of people with disabilities but also a broader advance in the artistic quality of such productions. The achievement owed much to disabled performers, nondisabled production staff who collaborated with them, financial support and the mature writing of British playwright Ben Weatherill.

That is why another production, "Birotdoeda" (roughly meaning "to begin," "to originate" or "to emerge from something"), written by Kim Ji-su and directed by Kang Ye-seul for the disabled theater company Aein, carried a different kind of resonance. Written by a Korean playwright with disabilities and performed entirely by disabled actors, the play guided audiences with an unusually calm rhythm built around the idea of rest.

The stage is set inside "Birot," a guesthouse operated by disabled people and open only to disabled guests. Visitors can choose furniture suited to their own physical needs, including size and height. Audience members seated close to the stage are also invited to choose chairs according to their preferences. Respect for difference and open accessibility appear to form the central theme of the production.

The breathing of the guesthouse, surrounded by nature, unfolds slowly. The first half of the play, performed by actors whose speech and movement are deliberately unhurried, demands patience from the audience. Gradually, however, the production draws viewers into moments of quiet peace: drinking coffee, reading tarot cards and sitting silently together on a wooden platform.

Within that stillness, movements often overlooked in ordinary life begin to stand out. The near-struggle of transferring from a wheelchair onto the platform, trembling hands stacking Jenga blocks and even the conducting of Brahms by an actor with a brain lesion disability revealed each performer's effort, physical path and presence. The scenes were deeply beautiful.

Aein has now spent 19 years as a disabled theater company. Its achievements were not the product of sudden success but of long companionship, patience and shared endurance.

Rather than asking audiences to admire disability from a distance, the production quietly reshaped the pace at which the audience watched and listened. By slowing everyday gestures and conversations, it challenged conventional ideas about efficiency, fluency and theatrical tension.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.

Ha Hyun-ock

The author is an editorial writer at the JoongAng Ilbo.

Korea's National Pension Service is effectively printing money.

Last year alone, amid a rally in the domestic stock market, the fund earned 231 trillion won ($154 billion) at an exchange rate of 1,500 won per dollar, recording an annual return of 18.8 percent. This year's pace has been even stronger. With the Kospi approaching the 8,000 mark, the fund is estimated to have earned another 250 trillion won in just four months. On May 6, former Vice Health and Welfare Minister Lee Seu-ran said the pension fund's assets likely exceeded 1.7 quadrillion won. Compared with the 1.46 quadrillion won recorded at the end of last year, the gains accumulated in four months already surpass last year's investment profits. They are also nearly four times larger than this year's expected pension premium income of 63 trillion won.

When the national pension's reserves grow, hopes for stable retirement security rise as well. Parametric reforms that increased contributions and benefits only delayed projected fund depletion by roughly 10 years. Even so, the pension fund is still expected to run out by 2057. Since a drastic increase in pension premiums is politically difficult, improving investment returns remains the only realistic way to delay depletion.

According to the government's third long-term fiscal projection released in October of last year, raising the pension fund's target annual return from 4.5 percent to 5.5 percent would postpone depletion until 2073. Under a 6.5 percent return scenario, the fund would not be exhausted until 2090. Higher returns, in other words, could substantially extend the life of the pension system and ease concerns about long-term sustainability.

Optimism is spreading. If current trends continue, the pension fund appears likely to post record returns for a fourth consecutive year. The biggest contributor has been domestic equities. Last year, while the Kospi rose 76 percent, the value of domestic shares held by the pension fund climbed 82.4 percent. As a result, the fund's average investment return from 2023 through 2025 rose sharply to 16.05 percent. Given that the Kospi has already gained about 74 percent this year, another record appears possible.

Yet behind this "money-printing" boom lies a growing concentration in domestic stocks. As of February, Korean equities accounted for 24.5 percent of the pension fund's portfolio. Considering the recent market rally, the figure has likely climbed well above 25 percent. That is an unusually high level for a pension fund expected to prioritize long-term stability.

Under existing guidelines, the pension fund's target allocation for domestic equities this year is 14.9 percent. Even after accounting for permitted ranges under strategic asset allocation and tactical asset allocation rules, the maximum allowed level is 19.9 percent. However, in January, the National Pension Fund Management Committee temporarily suspended the strategic allocation cap, allowing domestic stock holdings to exceed the target by more than 10 percentage points.

Normally, the pension fund follows a mechanical rebalancing strategy. When an asset class rises above its target share, the fund sells part of it to realize gains and purchases relatively undervalued assets. In principle, domestic stocks should have been sold once their share exceeded 17.9 percent. But because the cap was suspended, rebalancing never occurred and domestic equity exposure expanded further.

The problem may emerge next month when the temporary measure expires. Some analysts warn that if the pension fund resumes rebalancing, it could unleash a "sell-off shock" worth as much as 130 trillion won to 165 trillion won. That is why some policymakers argue that the new 2027–31 medium-term asset allocation plan, to be finalized on May 28, should raise the target allocation for domestic equities.

But keeping stocks simply to prop up the market could endanger the ret...