CLEVELAND (WJW) – The growing banking crisis is hitting close to home for retired teachers across the state of Ohio.
On Wednesday, officials confirmed that the State Teachers Retirement System of Ohio, or STRS, had invested and lost $27 million in the Silicon Valley Bank collapse last weekend.
In a statement, STRS Spokesperson Dan Minnich said, in part, “As of last Wednesday, STRS Ohio held shares of Silicon Valley Bank (SVB) worth $27.2 million or 0.03% of STRS Ohio’s total fund.”
He added that, “many other public pension funds,” held shares of SVB and that STRS, “does not own shares of Signature or Silverlight – two other financial institutions involved in the current crisis.”
But retired superintendent Dr. Robin Rayfield, executive director of the Ohio Retired Teachers Association, said they’re upset and believe the loss never should have happened.
“We’re aggravated,” said Rayfield, “Our retirement system gambles our money, they take very risky purchases in the investment market.”
He says although the pension fund is worth billions, teachers are concerned because they have no say in how the money is being invested.
About 300,000 retired and current educators pay into the fund. Rayfield says this $27 million is just the latest in a series of big losses, including more than $5 million in the FTX cryptocurrency collapse.
“Our position is we ought not to be in hedge funds and private equities, we ought to have our money invested in safe indexes,” said Rayfield.
STRS is monitoring and assessing the impact of the developments and says, “the Treasury Department, Federal Reserve and Federal Deposit Insurance Corporation,” have taken collective action to help mitigate the situation.
Meanwhile in Congress, Senator Elizabeth Warren D-Massachusetts blamed the banking crisis on the previous Trump administration loosening regulations on smaller banks and is introducing a bill to prevent bank failures.
“We must act quickly to prevent the next crisis,” said Warren.
Ohio Senator Sherrod Brown (D), who chairs the Banking, Housing and Urban Affairs Committee, is calling for a hearing on the collapse to be held as soon as possible.
The Ohio Retired Teachers Association is investigating their options too, they say, before the pension system loses even more of their hard earned money.
“We lost 5.3 billion last year and STRS got their largest bonuses ever,” said Rayfield. “Retirees are fed up with it. We’re done.”