CHECK: Is there Russian money in Virginia’s pension fund?

Russian assets make up such a small percentage of the portfolio that it might actually be more detrimental to your retirement plan to offload them

VIRGINIA, USA – In response to Ukraine’s invasion, Virginia Governor Glenn Younkin recently urged the board of directors of the state’s retirement system to give in or get rid of all Russian assets that the pension fund has in its portfolio.

QUESTION

Does the VRS Trust Fund have Russian investments? And if so, could they be sold?

SOURCES

Jeanne Chenault, from the Virginia Retirement System

Keith Brainard, research director of the National Association of State Retirement Administrators

ANSWER: YES

Chenault said the fund is partly made up of Russian assets, but it’s a very small part, 0.1%.

According to the latest performance report, the VRS trust fund is valued at $107.2 billion. Our experts agree: the 107 million dollars in Russian money is a “minimal” amount of the total.

“A point one percent of the portfolio could reasonably be considered an insignificant, perhaps even intangible part of the portfolio,” Brainard said.

He says pension money belongs to those who have invested it, not public or taxpayer money.

The VRS board manages the money and it is up to the directors to decide what is traded, bought or sold. Brainard said they are legally and morally obligated to make decisions based on participants’ best interests, not outside factors.

He said most Russian-based assets are held in larger index funds, and fund managers wouldn’t sell an index fund just to get rid of the small Russian portion. Indeed, this could have a negative impact on the entire portfolio.

The low percentage also means that even a drop in the value of the Russian currency should not have a major impact on the overall pension fund.

“It’s important for pension system administrators to keep an eye on the price, on the big portfolio, and not allow such a small part of the portfolio to make decisions that could affect the bulk of the portfolio,” said Brainard.

He says that even if the administrators decided it was better to sell them, it would be almost impossible to do so. The Russian market is closed and trade restrictions and sanctions are in place.

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Dolores W. Simon