WHAT HAPPENED AT SILICON VALLEY BANK?

What happened at Silicon Valley Bank? What caused a run on the bank’s deposits? The short answer is…a liquidity problem caused by mismarking asset values used for loan collateral in a climate of rising interest rates. Here is a quick review of what...

ASSET WRITE-DOWN: WHEN IS IT NECESSARY?

Plan fiduciaries are required to do an asset write-down of the fair value of an asset has has dropped. (See, Hughes v. Northwestern University) Otherwise, an asset’s value may be over-stated and you may not know what your 401k plan is actually worth. But the...

FAIR VALUE HIERARCHY

FAIR VALUE Pension assets must be valued and reported at “fair value.” The goal, of course, is to categorize each asset by its characteristics and risks, so that value can be most readily understood and acted upon by (a) plan fiduciaries in making...

THE PROBLEM WITH ALTERNATIVE INVESTMENTS

A major focus of this ERISA blog is to highlight the differences between standard pension investments (such as mutual funds) and alternative investments–discussed below. Standard pension investments trade on a public exchange at a publicly-disclosed fair market...