* Largest attrition of fund managers ever in 2016
* Move to small city 200 km from Seoul main reason - source
By Joyce Lee and Yena Park
SEOUL, Feb 13 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
"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
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
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.
($1 = 1,151.7000 won)
(Reporting by Joyce Lee and Yena Park; Editing by Tony Munroe
and Jacqueline Wong)