No, Kentucky’s teacher pension fund did not lose $13 million on Russian bank stock.
No, despite what you see on the Internet, Kentucky’s teacher pension fund did not just lose $13 million in Russian bank stock.
Late Thursday night, social media exploded with news that the Teachers’ Retirement System of Kentucky was the second-largest institutional shareholder in Russia’s Sberbank, which saw its shares fall 95 percent this week as the bank announced it is leaving the European market amid the chaos caused by Russia’s invasion of Ukraine.
A Twitter account called Market Sentiment said that TRS held $13 million in Sberbank stock, but that holding was reduced to a mere $778,000 after the crash. By noon Friday, 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 for comment on Friday morning, TRS general counsel Beau Barnes released a statement saying the pension fund sold its Sberbank stock last month. The manager was reacting to sanctions being imposed on Russia by the West, the agency said in a statement.
“From March 2017 until the final sale on Feb. 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 holding was in an over-the-counter, American-exchange portion of Sberbank known as an American depositary receipt. This is a small piece of the overall Sberbank capital structure,” the agency said.
“TRS’s remaining exposure to holdings in Russia is proportionately negligible in a portfolio of about $26 billion,” the agency said.
In an interview, Barnes said the pension fund’s remaining Russian holdings were last valued at about $30 million. But given the devaluation of the Russian ruble and the general chaos in the Russian economy, it’s not clear what the holdings are currently worth or when they could be sold, if the TRS Board of Trustees decides to, he said.
TRS’ target for its pension fund investments is 16 percent in international equities.
“If you spread out your investments internationally, you’re gonna end up touching some of these other parts of the globe,” Barnes said. “We do a lot of due diligence. We diversify our portfolio. But you know things can happen.”
TRS provides retirement benefits to 56,629 retired Kentucky educators, with 73,151 more educators actively enrolled. School teachers in Kentucky are not eligible for Social Security retirement benefits.
This story was originally published March 4, 2022 at 1:07 PM.
