Pension Funds Suffer Millions in Losses After Silicon Valley Bank Collapse

The collapse of Silicon Valley Bank and Signature Bank has caused pension funds around the world to suffer millions of dollars in losses.^[0] The Employee Retirement System of Rhode Island, the California Public Employees Retirement Fund (CalPERS), and the North Carolina Retirement System were among those affected, with investments totaling $17.9 million, $67 million, and $18 million respectively.^[0]

The Ohio State Teachers Retirement System (STRS) had the most significant losses, with the fund investing $27.2 million in Silicon Valley Bank before the shutdown. That amount represented 0.3 percent of the system’s total fund, and the loss is estimated to be between $27 million and $40 million. Meanwhile, the Employee Retirement System of Rhode Island had just over $2.6 million invested in Silicon Valley Bank, Signature Bank, First Republic, and Silvergate Capital.^[1]

North Carolina Treasurer Dale Folwell said the state’s pension fund held about $9.9 million in Silicon Valley Bank and $7.8 million in Signature Bank stock.^[2] This amount only made up 0.01 percent of the total value of the impacted portfolios.^[3] In a statement to ABC News’ Raleigh station WTVD, Frank Lester, Deputy Treasurer/Spokesman, said it was unknown if the money would be recovered.^[4]

Silicon Valley Bank's collapse was the second-largest banking collapse in America, based on assets.^[5] The aftermath of the collapse has sparked lawsuits from shareholders alleging executives engaged in fraud, and has sparked debate over further economic ramifications and what the government’s response should be.^[6]

The Swedish pension fund Alecta, which represents over 2.6 million people and had invested over $1.1 billion in Signature and Silicon Valley Bank, is one of the largest investors to suffer losses. Magnus Billing, the CEO of Alecta, told Bloomberg that the investments were a “big failure” and that the fund would likely write off their holdings as a loss.^[2]

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.^[7] As the financial crisis continues, pension funds around the world are feeling the impact and are uncertain of their investments’ future.^[3]

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

1. “RI pension fund poised to lose $2.5 million after Silicon Valley Bank collapse” WPRI.com, 13 Mar. 2023, https://www.wpri.com/target-12/ri-pension-fund-poised-to-lose-2-5-million-after-silicon-valley-bank-collapse

2. “Pension funds report millions in losses amid financial crisis” WPVI-TV, 17 Mar. 2023, https://6abc.com/pension-funds-report-millions-in-losses-amid-financial-crisis-/12966904/

3. “Pension funds report millions in losses amid Silicon Valley Bank collapse” KMAland, 17 Mar. 2023, https://www.kmaland.com/news/business/pension-funds-report-millions-in-losses-amid-silicon-valley-bank-collapse/article_e4f222a1-aaba-5a05-9909-1bf67c69c96f.html

4. “NC Pension Plan has ‘small exposures' in collapse of CA banks” The Richmond Observer , 17 Mar. 2023, https://richmondobserver.com/local-news/nc-pension-plan-has-small-exposures-in-collapse-of-ca-banks.html

5. “NC retirement fund had investments with 2 failed banks” Raleigh News & Observer, 16 Mar. 2023, https://www.newsobserver.com/news/politics-government/article273181700.html

6. “Illinois Municipal Retirement Fund invested in now-collapsed Silicon Valley Bank” Illinois Policy, 15 Mar. 2023, https://www.illinoispolicy.org/illinois-municipal-retirement-fund-invested-in-now-collapsed-silicon-valley-bank

7. “Ohio teachers retirement fund takes massive hit in Silicon Valley Bank collapse” FOX21News.com, 16 Mar. 2023, https://www.fox21news.com/hill-politics/ohio-teachers-retirement-fund-takes-massive-hit-in-silicon-valley-bank-collapse/