NC pension had millions invested in two failed banks. Will it get the money back?

Posted on Mar 15, 2023

Like companies across the state, North Carolina’s pension fund had millions of dollars invested in two recently failed banks. 

The North Carolina Retirement System had $10.1 million in Silicon Valley Bank stock and another $7.8 million in Signature Bank stock, the Department of State Treasurer confirmed Wednesday. Bank runs contributed to the collapses of Silicon Valley Bank (SVB) on Friday and Signature on Sunday. 

While the combined $17.9 million investments represent a sliver of the state’s overall retirement system value, Treasury spokesperson Frank Lester said “we are unsure at this time” if the money will be recovered. 

The North Carolina Retirement System includes four major retirement programs, the largest being the Teachers’ and State Employees’ Retirement System, as well as multiple smaller pension funds. Each month, the overall system pays roughly $600 million to around 350,000 people. 

As of March 10, the system was valued at $110.6 billion. 

Speaking to The News & Observer on Wednesday, State Treasurer Dale Folwell said his department didn’t directly buy SVB or Signature stocks but instead invested in index funds that contained the banks’ shares. The state controls index funds in-house and through outside asset managers like BlackRock. 

Folwell noted the total exposure to SVB and Signature “equates to less than .01% of the value of the retirement plan.” He assured the bank collapses will in no way affect the state’s distribution of benefits. 

“We obviously wish that we’d had less exposure, but glad we didn’t have more,” he said.  

North Carolina wasn’t the only state to have its pension fund exposed to the two banks. The California Public Employees Retirement Fund reportedly had $67 million in SVB stock and around $11 million of Signature shares. 

On Sunday, the U.S. Treasury Department announced it would guarantee all deposits in these failed banks, easing concerns of local startups that had money stuck in accounts. Whether shareholders in these two formerly public companies will see any part of their investments returned is less clear. 

“I’m expecting the worst, hoping for the best,” Folwell said.

Original post: https://www.newsobserver.com/news/politics-government/article273181700.html#storylink=cpy