March 22, 2023

While the recent events surrounding Silicon Valley Bank, Signature Bank and First Republic have caused concerns in the financial industry, COAERS has not experienced any service interruptions because the System does not have any direct business relationships with these institutions.

As these banks are publicly traded companies, COAERS, like nearly all global investors, had de minimis market exposure to the underlying company equity as part of the Fund’s passive index investment holdings in US Equities. The Fund, however, maintains a highly diversified investment portfolio and takes great measures to mitigate potential risks, including those related to banking relationships.

As part of our continuous efforts to monitor counterparty risks to the plan, our investment staff regularly reviews the financial health of the Fund’s various banking counterparties. Our analysis indicates that the institutions we work with remain in good financial standing with diversified business lines and no significant levels of leverage.

Our prudent and strategic approach serves the long-term interests of our members by consistently achieving best-in-class results. The Fund’s strong investment policy helps maintain the System’s focus and guides decision-making for the long-term. We take our fiduciary responsibility very seriously, and we have implemented robust risk management processes to help protect the benefits of our members.

Looking forward, we will continue to monitor any further developments.