Will the bank collapse affect retirement accounts? What retirement accounts can suffer losses?
Silicon Valley Bank (SVB) and Signature Bank collapsed. Will this affect pensions? We explain which funds could or have already suffered losses.
Silicon Valley is known as the start-up capital of the world. Many companies looking to succeed in technology knew they could count on funding from Silicon Valley Bank (SVB) when other financial institutions refused to lend.
But now, SVB will be remembered as the second-largest bank failure in US history. As of December 31, 2022, SVB was the 16th largest bank in the country by total assets. Following SVB was the collapse of Signature Bank, which became the second bank to go bankrupt so far this year and the third-largest bank failure in the USA. Another smaller institution, Silvergate Bank, has also failed.
After the collapse of these big banks, have retirement accounts been or will they be affected? We will explain.
Will the bank collapse affect pensions? What pension funds can suffer losses?
Among the investors who thought their money was lost when SVB fell apart earlier this month were public sector pension funds responsible for guaranteeing the retirement of teachers, firefighters, and other government workers.
Equable, a privately funded nonprofit that researches public pensions and advocates for their safety, has identified more than two dozen public sector pension funds with direct stakes in Silicon Valley or Signature Bank, or both. Fortunately, in all cases, bank shares accounted for no more than a few dollars out of every $10,000 in fund assets.
The pension funds that were affected after the banking collapse
The fund with the largest share in SVB was CalPERS, a fund serving California public employees. On the other hand, the Ohio State Teacher Retirement System, the New York State Common Fund and the State Teacher Retirement Fund, and the Washington State Board of Investment were among those who held fewer shares.
We share with you the partial list of pension funds that held shares in Silicon Valley Bank (SVB), Signature Bank, or both, according to Equable:
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