Several public pension systems in Ohio suffered significant losses due to investments in Silicon Valley Bank of California and Signature Bank of New York, two of the largest banks to fail in the

history of the United States. These losses were incurred as Silicon Valley Bank announced last Wednesday that it had incurred a $1.8 billion after-tax loss and needed to raise additional capital to alleviate depositors' concerns. The Federal Deposit Insurance Corporation took over the bank after several failed attempts to sell it to healthier banks.

Ohio's State Teachers Retirement System was hit the hardest by the bank crisis, with shares in SVB worth $27.2 million, which represents 0.03% of the fund's total portfolio. The system did not hold shares in Signature Bank. The Ohio Public Employees Retirement System also experienced losses, holding shares in SVB worth $3.2 million and shares in Signature worth $2.2 million. This $5.4 million represents 0.0058% of OPERS' $92.5 billion investment portfolio.

The Ohio Police & Fire Pension Fund did not own shares in SVB, but it had indirect exposure to the crisis through the Russell 1000 Index Fund, which resulted in an estimated loss of $320,000. The School Employees Retirement System, which serves non-teacher staff such as bus drivers and cafeteria workers, incurred a loss of $929,000 due to the bank crisis, representing 0.01% of its $17 billion investment portfolio.

Ohio's public pension systems serve almost two million employees, retirees, and former government workers. Public employees in Ohio do not contribute to Social Security, so the public pensions represent their primary retirement funds. Therefore, these losses may have a significant impact on their financial future.

The collapse of Silicon Valley Bank and Signature Bank highlights the importance of investing in stable and reliable financial institutions. Pension funds must be vigilant in their investment strategies to ensure that they are not exposed to significant risks that could result in substantial losses.

In conclusion, the significant losses incurred by Ohio's public pension systems as a result of the collapse of Silicon Valley Bank and Signature Bank highlight the importance of careful investment strategies and the risks associated with investing in unstable financial institutions. Public pension funds must take steps to ensure that they are not exposed to such risks in the future, as the consequences can be severe and long-lasting. Photo by Tony Webster, Wikimedia commons.