In an attempt to help prop up the sagging stock market, the ruling and opposition parties have agreed to eliminate regulations banning stock investments by pension funds.
However, critics cautioned that lifting the ban on pension funds' stock investments could backfire unless safeguard measures are in place, pointing out that the government will have to compensate for losses with taxpayers' money if the pension funds incur losses through the stock investments.
On Thursday, Reps. Kang Hyun-wook of the ruling Millennium Democratic Party (MDP) and Shin Yung-kook of the main opposition Grand National Party (GNP) reportedly hammered out a package deal on the passage of financial bills concerning pension funds management, budget accounting and enhancement of budget management.
The two lawmakers represented the ruling and opposition members of the National Assembly's Finance and Economy Committee.
Shin said his party supported the decision to lift the ban on stock investments by pension funds, feeling it necessary to revitalize the depressed stock market. However, he emphasized that the GNP will keep provisions of the bill aimed at ensuring transparency and independence in the management of the funds, saying that the government will be prohibited from dictating the way the pension organizations invest their funds.
Rep. Lee Han-koo of the GNP echoed …