Pension funds report millions in losses amid Silicon Valley Bank collapse

[BumRushDaShow]

Source: ABC News

An Ohio public pension fund for teachers revealed it lost millions by holding more than $27 million in Silicon Valley Bank shares before the bank’s collapse.

The State Teachers Retirement System (STRS) of Ohio stated that the shares represented a minuscule portion of its overall holdings --.03% of the total fund -- which held over $88.8 billion in assets as of June 2022. The statement confirmed that the bank had no shares of Signature or Silvergate banks, which collapsed in the past weeks. STRS is a pension fund for over 500,000 current and former public educators in Ohio.

“The collective actions taken by the Treasury Department, Federal Reserve and Federal Deposit Insurance Corporation to insure and backstop deposits have helped to mitigate the situation facing the banking industry,” STRS wrote in their statement. “STRS Ohio continues to monitor and assess the impact of these developments.”

The multi-million dollar loss comes as another repercussion of the ongoing financial crisis. Silicon Valley Bank, the 16th largest bank in the U.S., collapsed one week ago, followed by the collapse of Signature Bank. Silvergate Bank, which specialized in providing services to cryptocurrency users, also liquidated its assets earlier in March. The financial crisis has impacted other pension funds, including North Carolina’s state pension fund and California’s public employee retirement fund.

Read more: https://abcnews.go.com/US/pension-funds-report-millions-losses-amid-financial-crisis/story?id=97932375

[SheltieLover]

1. Kicking for Visibility

[mahatmakanejeeves]

2. That will teach those greedy capitalist oligarch shareholders that ...

Oh, wait.

[BumRushDaShow]

3. TGIF

And top 'o the morning!

[Baitball Blogger]

4. Why do they always use the teachers funds to effeing prop up effeing

shady financial systems? That what Gov. Bush did with the teachers funds and Enron in Florida.

[FredGarvin]

5. So odd that 5% of Ohio's population are teachers with pensions

That's a really high percentage of people getting pensions to begin with.

[yardwork]

17. It's probably all the state retirees, not just teachers.

[RAB910]

6. I don't understand why pensions are allowed to invest in individual stocks

I would think they should only be investing in index funds which would shield them from downturns with any individual company

[FredGarvin]

9. Index funds are a basket of individual stocks

[mathematic]

7. Diversified equity investments, even with bankruptcies, outperform other investment strategies

Whenever some trash company goes bankrupt there's a story about a pension fund that invested in it.

Sure, they lost .03% of the fund's value from the bankruptcy. How much did the fund's bond portfolio increase in value due to the bankruptcy? Probably more than .03% of the fund's value, if I had to guess.

Diversified investments across assets that are uncorrelated or negatively correlated improve investment returns. If your pension fund isn't investing in things like SVB then it will have difficulties meeting its pension obligations in the long run.

Reports like this usually lead people to think that the funds made a mistake, are poorly managed, or are otherwise making victims out of the pension holders. Come back in a day and look through the comments in this thread and I'm sure you'll see this was the takeaway from the story. (I would be pleasantly surprised if its not).

[FredGarvin]

8. In the past, pensions were paid out by laddered treasuries and safe guaranteed returns

Since the advent of zero interest rates, it forced these pension funds into the hands of Wall Street speculators.

This is a massive problem for all pension funds.

Accrued liabilities need significant returns to keep promises made

[CountAllVotes]

14. +1

The zero interest policy fucking broke me.

I'd inherited some $ in the year 2000 and when the investments came due all I could get was 2%!



FUCKERS!!!

[MichMan]

16. Pension funds getting lower returns would cause annual contributions to rise

State and Local governments count on higher rates of return to keep their annual contributions lower.

[Joinfortmill]

19. Yup... it's sucks but it's the only game in town.

[mnhtnbb]

10. NC state pension plans also affected, but only a fraction of the effect on Ohio.

The fallout is also being felt in North Carolina.

Wednesday, ABC11 confirmed state pension plans included millions in stock from both banks.

"We have small exposures to both Silicon Valley Bank and Signature Bank as shareholders of their stock. As of February 28, we had a total of approximately $9.9 million of Silicon Valley Bank stock as well as approximately $7.8 million of Signature Bank stock across the DB Plan, the DC Plan, and our AGPIP portfolios. This equates to less than 0.01% of the value of all three of these portfolios," State Treasurer Dale Folwell said.

He says the investments equate to less than one percent of the portfolio and pensions really won't be impacted.

https://abc11.com/business-nc-pensions-stocks-silicon-valley-signature-bank/12958053/

[twodogsbarking]

11. .03% of its holdings. Meh.

[Mawspam2]

12. But were they really lost when Biden/Yellen/Powell...

...says 'all deposits are safe' or was this an equity position, in which they were wiped out.

[mahatmakanejeeves]

15. Equity. Now worth zilch. NT

[CountAllVotes]

13. +1

[Joinfortmill]

18. Regulations are good, very good, very damn good.