KY teachers’ pension fund didn’t lose $13m to Russian bank
No, despite what you see on the internet, the Kentucky teachers’ pension fund didn’t just lose $13 million in Russian bank stocks.
Late Thursday night, social media exploded with news that the Kentucky Teachers’ Pension System was the second-largest institutional shareholder in Russia’s Sberbank, which saw its shares plummet 95% this week as the bank announced it was quitting. the European market amid chaos. caused by Russia’s invasion of Ukraine.
A Twitter account called Market Sentiment said TRS held $13 million in Sberbank shares, but that holding was reduced to just $778,000 after the crash. As of midday, the post had been retweeted more than 4,600 times, including twice by U.S. Rep. Thomas Massie, R-Ky., who added, “Buy the ticket, take the ride.
However, the information is “completely false”, according to TRS.
After the Herald-Leader called TRS on Friday morning, TRS General Counsel Beau Barnes released a statement saying the pension fund had sold its Sberbank shares last month. The manager was reacting to sanctions imposed on Russia by the West, the agency said in a statement.
“From March 2017 until the final sale on February 23, 2022, TRS invested $15.6 million with $12.4 million returned, for a loss of $3.2 million,” the agency said. .
However, that loss was offset by about $3 million in dividends paid while TRS owned the stock, TRS added.
“TRS’s stake was in an over-the-counter US foreign exchange portion of Sberbank known as the US Certificate of Deposit. This is a small part of Sberbank’s overall capital structure,” the agency said.
“TRS’s remaining exposure to holdings in Russia is proportionately negligible in a portfolio of approximately $26 billion,” the agency said.
In an interview, Barnes said the pension fund’s remaining Russian holdings were last valued at around $30 million. But given the devaluation of the Russian ruble and the general chaos of the Russian economy, it is unclear what the holdings are currently worth or when they could be sold, if TRS’s board decides, it said. -he declares.
TRS’s target for its pension fund investments is 16% in international equities.
“If you spread your investments internationally, eventually you will hit some of these other parts of the globe,” Barnes said. “We do a lot of due diligence. We are diversifying our portfolio. But you know things can happen.
TRS provides retirement benefits to 56,629 retired Kentucky educators, with an additional 73,151 actively enrolled educators. Kentucky teachers are not eligible for Social Security retirement benefits.
This story was originally published March 4, 2022 1:07 p.m.