Ohio Pensions Cut Ties with State Street and BNY Mellon

March 20, 2012 (PLANSPONSOR.com) – Ohio’s state treasurer cut ties with State Street Corp. and Bank of New York Mellon Corp. 

The two banks were charged with overseeing the international assets of four of the state’s five pension funds. The treasurer cut ties with the banks because of concerns that they may have manipulated foreign exchange rates and potentially costs plan participants millions of dollars, reports the Associated Press.

On Monday, Ohio Treasurer Josh Mandel picked Citibank and J.P. Morgan Chase as replacements to oversee the $41.3 billion in the pensions’ international assets. According to the Associated Press, J.P. Morgan Chase will be in charge of the international assets of the Ohio Public Employees Retirement System and the Ohio Police & Fire Pension Fund. Citibank will be the custodians for the international securities of the School Employees Retirement System and State Teachers Retirement System.

In a press statement, Robert Caporale, head of new business development , Americas for J.P. Morgan Worldwide Securities Services, said, “J.P. Morgan is proud to have been selected by the State of Ohio to provide custody services. We are deeply committed to the public pension space, and look forward to delivering the strength, leadership, and quality client service that the J.P. Morgan brand exemplifies.” 

The replacement comes after the state’s attorney general filed a lawsuit last week against the Bank of New York Mellon Corp., alleging the bank was overcharging the state pension fun for foreign currency exchange transactions (see “Ohio Pension Funds Sue BNY Mellon”).