Pension Funds Lose Millions in SVB Collapse, Investigation Underway

The collapse of Silicon Valley Bank (SVB) has caused pension funds around the world to lose millions of dollars, including the Ohio State Teacher’s Retirement System (STRS), which had $27.2 million invested in the bank just before its failure.^[0]

The Employee Retirement System of Rhode Island (ERSRI) was also one of the public pension funds that had exposure to the bank, with just over $2.6 million invested in SVB, Signature Bank and two other banks at risk of collapse: First Republic and Silvergate Capital.^[0] ERSRI spokeswoman Michelle Moreno-Silva said in an email, “We’re assuming that there is little value to the assets with the exception of First Republic which is still trading.”^[1]

Multiple federal agencies are now investigating the collapse of Silicon Valley Bank, which could lead to increased scrutiny of the rest of the banking industry as some lawmakers demand answers and action with regards to banking regulation in the wake of the bank’s failure.^[2]

CEO Greg Becker and other SVB executives are also under fire for selling off $84 million in the bank’s stock over the past two years in the midst of the greater risk-taking.^[3] Although Becker claimed a failure of banks his size wouldn’t cause a panic, federal authorities felt compelled to guarantee deposits above the $250,000 maximum-insured level to prevent one.^[3]

In response to the losses, the Retired Teachers Association continued its criticism of the management of the $90 billion pension system, with Executive Director Robin Rayfield saying in a statement, “STRS has lost nearly $40 million of teachers’ hard-earned dollars after Silicon Valley Bank imploded overnight.^[3]

0. “Pensions Lose Millions After Bank Collapse” Newsweek, 13 Mar. 2023, https://www.newsweek.com/pensions-lose-millions-after-svb-collapse-1787476

1. “SVB collapse: Rhode Island pension fund to lose $2.5 million from bank collapse” Washington Examiner, 13 Mar. 2023, https://www.washingtonexaminer.com/policy/economy/svb-collapse-rhode-island-pension

2. “Ohio teachers retirement fund takes massive hit in Silicon Valley Bank collapse” msnNOW, 16 Mar. 2023, https://www.msn.com/en-us/money/markets/ohio-teachers-retirement-fund-takes-massive-hit-in-silicon-valley-bank-collapse/ar-AA18J8RF

3. “Ohio State Teachers Retirement System Had Massive Investment in Silicon Valley Bank” Cleveland Scene, 15 Mar. 2023, https://www.clevescene.com/news/ohio-state-teachers-retirement-system-had-massive-investment-in-silicon-valley-bank-41599459