March 10, 2022
The Virginia Retirement System Trust Fund recently invested about $100 million in Russia-related investments, according to VRS officials who oversee the state employee pension fund.
But the agency says it cannot determine the current value of those assets due to turmoil in Russia’s financial system following the country’s invasion of Ukraine.
As of February 24, “VRS’s exposure to Russian investments” was about 0.1% of the trust fund, according to a spokesperson for VRS, the agency that oversees the pension benefits of more than 750,000 former and current civil servants. . The total value of the fund is estimated at $107.2 billion, according to the latest quarterly report.
VRS spokeswoman Jeanne Chenault said the system had only “minimal investment exposure” in Russia-related assets. She said the agency could not immediately provide a detailed accounting of her specific investments in Russia or their value.
“We expect the current value to be lower than the February estimate, but we cannot determine an updated value as markets are now closed to trading and trading,” Chenault said in response to questions. of Mercury.
In response to Russia’s invasion of Ukraine, Governor Glenn Youngkin specifically mentioned the state pension fund last month when calling on state-affiliated entities to “divest in a careful and orderly manner.” of all Russian ruble holdings and securities”. Russian companies.
But divestment efforts have been complicated by the prolonged shutdown of the Moscow stock exchange and widespread disruption to Russia’s economy.
The Virginia Retirement System offices in downtown Richmond. (NBC12)
“Regulatory, investment and market conditions in Russia are changing rapidly, and VRS is working with its investment partners to develop short- and long-term plans in response to the crisis,” Chenault said. “Currently, widespread trade restrictions exist inside and outside of Russia, making trade difficult, if not impossible.”
The dumping of Russian stocks after their fall in value could mean losses for investment funds. For example, the Kentucky Teachers’ Retirement Fund lost $3 million when it sold its stock in a Russian bank, according to NBC News. The pension fund’s initial investment was $15.6 million.
Chenault said the VRS is “deeply concerned about the Russian invasion of Ukraine and for the suffering Ukrainian people.” But exactly how the agency plans to handle its financial ties to Russia remains unclear.
“Consistent with prudent investment standards and our fiduciary duty, VRS, our managers and legal advisors will continue to closely monitor this rapidly evolving situation,” Chenault said. “In addition, VRS will comply with federally imposed sanctions and restrictions regarding Russian investments.”
VRS describes itself as the 17th largest public or private pension fund in the United States and the 46th in the world, with more than 750,000 active and inactive members, retirees and beneficiaries. These include public school teachers, employees of cities, authorities, and special commissions, employees of state agencies, personnel of public colleges and universities, state police, Virginia court officers and the judiciary.
This story was originally published by the Virginia Mercury. For more stories about the Virginia Mercury, visit Virginia Mercury.com.