Missouri educators’ pension system writes off value of Russian assets

Missouri’s largest state-run public pension fund will assign a zero value to its approximately $91 million in Russia-tied assets because of long-term uncertainty about when or if the holdings can be sold.

The Public School and Education Employees Retirement System, or PSRS/PEERS, Board of Trustees met Friday to discuss the system’s Russian holdings and how to manage them. Craig Husting, assistant executive director for investments, said that Russian markets are closed and transacting business in Russian securities has halted since the invasion of Ukraine.

Writing the value to zero value in the system that has assets totalling $57.3 billion has been used in the past for assets that were difficult or impossible to sell, he said.

“We think that is the most conservative way to approach it, the most prudent way to approach it,” Husting said.

If anything is realized later, he said, it will be counted as a gain because the loss is taken now. 

“We don’t want to have a fire sale,” Husting said. “We are not going to demand that our managers sell immediately. We think the prudent course of action is to give them plenty of time if and when the markets reopen.”

The $90.8 million figure is the value of the assets on Feb. 28 and they are likely much lower now, he said. 

The value of the Missouri State Employee Retirement System, or MOSERS, Russia-linked assets, pegged at $13 million on Feb. 25, were reported to be $1.6 million as of Wednesday when that system’s trustees met. On Thursday afternoon, the MOSERS board voted to divest its Russia-linked holdings.

The PSRS/PEERS board did not vote on selling the assets after hearing Husting’s presentation. He told them the staff had been in contact with fund managers, who promised they would not buy additional Russian assets with system funds and would identify investments in any entity under sanction because of the war.

Worldwide, institutional investors are divesting Russian assets and major corporations are withdrawing from the Russian market, Husting noted. 

There could be some impact on system returns if those companies take losses, he said, adding that European banks and energy companies are showing losses in international markets.

The board met amid public pressure on pension funds nationally to dump Russia-linked investments. State Treasurer Scott Fitzpatrick called for pension funds to divest and legislation was introduced this week to require divestment.