National Pension Service Operates Revenue-Generating Halls in Haphazard Fashion

It has been pointed out that the National Pension Service is operating revenue-generating halls built to generate fund profits in a haphazard manner, with actual investment returns turning deficits into surpluses.

According to analysis by Rep. Jeong Mi-kyeong (Grand National Party, Gwonseon, Suwon) of ‘economic feasibility analysis data for revenue-generating halls’ submitted by the National Pension Service, among nine revenue-generating halls in total, two locations—Gwangju and Daejeon—were pointed out to have actual investment returns in the red.

Additionally, according to the data, two locations—Busan and Cheongju—showed year-on-year decline in capital returns on the building over the past three years, Rep. Jeong stated.

Regarding office leasing, one of the Service's revenue sources, vacant office rates of 5% or higher as of the end of last year were recorded in four locations: Gwangju (14%), Incheon (19.6%), Jeonju (9.3%), and Cheongju (10%); and as of the current date this year in three locations: Gwangju (9.8%), Incheon (8.6%), and Cheongju (7.1%).

In response, Rep. Jeong Mi-kyeong stated, “The revenues from revenue-generating halls operated by the Pension Service not only show significant regional disparities, but there are many problems such as deficits being packaged as profits by failing to reflect depreciation expenses.”

Nevertheless, the Service independently estimates projected revenue rates for the halls and, based on these estimates, continues to add further hall construction, conducting fund real estate investments in a haphazard manner.

Rep. Jeong suggested, “When predicting investment returns, it is necessary to reflect depreciation expenses of real estate and refer to investment return rates and vacancy rates of other regional halls with similar conditions. It is desirable to secure stability through careful investigation and review rather than reckless expansion of investments.”