Early reports suggested that a pension fund for Kentucky teachers lost approximately $13 million invested in Sberbank, one of Russia’s largest banks. The pension plan quickly refuted these stories, reporting that the plan sold its interests on Feb. 23, the day before Russia invaded Ukraine for a modest loss. The Plan claims to have lost approximately $3.2 million, offset by the $3+ million in dividends made over the life of the investment.

Regardless of the particulars of this story, pension plans will likely face significant investment losses as a result of U.S. and western sanctions against the Russian Federation and Belarus. Losses will include both direct losses by exposure to Russian investments, but also secondary losses (e.g., U.S. companies relying on Russian commodities). Where there are losses, lawsuits will likely follow. Pension plans will likely question whether their exposure to the Russian market was prudent and whether they were well advised, particularly given U.S. warnings about Russian intentions starting in November/December 2021. The validity and result of any lawsuits, of course, are impossible to predict. And of course there will be winners as well—investors in U.S. and European defense firms, for example. But as with the entire world, the invasion of Ukraine will invariably affect both the pension and legal world. The results are difficult to predict.