SEOUL (Reuters) - Known for its food culture, historic buildings and lush surrounds, the South Korean city of Jeonju’s name translates as “perfect region”.

The logo of National Pension Service (NPS) is seen at its branch office in Seoul, South Korea, November 4, 2016. REUTERS/Kim Hong-Ji

Just don’t try telling that to the fund managers at the National Pension Service (NPS) who have quit the world’s third-biggest pension fund ahead of planned move to the city next year.

More than 20 fund managers have left the fund’s Investment Management organization this year, said a source with direct knowledge of the matter, with several saying they were worried about the impact the relocation of the NPS headquarters from Seoul will have on their careers and personal lives.

The exodus, more than double annual attrition levels in the previous three years, has raised concerns about the $470 billion fund’s ability to boost returns and head off a funding shortfall created by the OECD’s fastest-ageing population.

Members of Parliament have expressed concern over the brain drain worsening as the NPS’ Investment Management organization prepares its February move to Jeonju, a 200 km (125 mile), three-hour trip from Seoul by high-speed train and taxi.

Yon Kang-heum, a professor at the Yonsei School of Business, said the move to Jeonju comes at an especially inopportune time as NPS accelerates its investments overseas and in alternative assets.

“It takes six hours round-trip on the road between Seoul and Jeonju. As NPS increasingly works with overseas investment and asset management firms, logistics for people coming from abroad will be even more uncomfortable,” said Yon.

“In alternative assets especially, access to deals is almost exclusively through networking, but they are at a disadvantage to maintain such ties,” he said.

The NPS’ Investment Management unit employs roughly 300 people, including about 220 fund managers.

The decision to move was made in 2013 as part of an effort to decentralize government functions away from the capital Seoul and boost regional development.

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BIBIMBAP NOT ENOUGH

In Jeonju, famous as the home of bibimbap or mixed rice bowl, the gleaming new building that will house NPS’ Investment Management organization is expected to be completed this month.

“Our building is very good, but there isn’t any infrastructure nearby,” said one person directly affected by the move. “It’s farmlands and paddies.”

The nearest airport, a one hour drive away in Gunsan, only has flights to Jeju Island, a holiday destination off Korea’s southern coast.

The prospect of uprooting family to the city of 660,000 or a long commute is worrying many staff.

“I am seriously considering moving the family, but it’s really a headache,” said another person directly affected by the move, who like others was not authorized to speak to media and declined to be identified.

Those who have left the NPS this year include several key managers including former heads of investment strategy, overseas infrastructure and overseas bond management, according to information made public at the parliament hearing.

An NPS spokeswoman said the move is prescribed by law, and the Investment Management organization will do its best to ensure there are no issues in managing the fund. The fund is projected to build toward a peak of $2.2 trillion in assets by 2043.

“The situation makes it difficult for anyone to make decisions with clear long-term plans in place, no matter what kind of family situation you have, whether you have kids, your age, so on,” said a third person affected by the move.

SALARY BOOST

In part to slow the exodus, the government agreed earlier this year to increase the pay of fund managers by 10 percent, and to increase performance pay by an average of 10 percentage points, NPS chairman Moon Hyung-pyo told a parliamentary hearing.

Despite the increase, NPS fund managers earn about 70 percent of the pay of their private sector counterparts. That’s largely due to the constraints of being funded by taxpayer money and having its budget overseen by the finance ministry.

“As NPS’ fund size grows and overseas investment grows, securing expertise is becoming more and more important,” Moon told the hearing. “So we need to secure good talent, but on that note I believe it (the pay) is insufficient.”

Signs of waning interest in once-coveted NPS jobs had been flagged earlier.

When the Investment Management office tried to hire about 30 new fund managers in July, it attracted the fewest competitors ever for available positions and ended up hiring just 22 people, according to NPS data submitted to parliament. A parliamentary committee was told the move to Jeonju was a factor.

Yon, the professor, believes the move was ill-considered. Questions remained over how many fund managers would make the move, and how long they would stay, he said.

“Managers will look to build up their resume and move elsewhere quickly,” said Yon. “That’s not ideal.”

($1 = 1,147.9500 won)