TALLAHASSEE, Fla. (AP) — Florida is getting a $28 million payment to settle allegations that Bank of New York Mellon overcharged the state's massive pension fund.
The settlement comes slightly more than two years after Attorney General Pam Bondi first sued the bank that acts as main custodian of the Florida Retirement System. Nearly 1 million current and retired public employees are enrolled in the state's pension plan.
Bondi contended the settlement represented "full compensation" to the state.
"We worked hard to achieve this substantial recovery on behalf of Florida's retirement fund," Bondi said in a written statement.
The settlement also resolves separate allegations involving investments made by the bank on behalf of the pension fund into a company that later went into receivership.
Bondi's initial lawsuit — which built on the filing of a previous whistleblower complaint against the bank — contended Bank of New York Mellon overcharged the state for foreign currency exchanges by trading them in such a way that the state either paid too much or got paid too little.
Under the terms of the settlement — which was signed on Thursday — Bank of New York Mellon will pay $28 million to the state pension fund within the next two weeks. The bank also agreed that over the next decade it will give a credit worth up to $500,000 a year on any fees charged to the state agency that oversees the pension fund. Bondi's office also will receive $100,000 to cover legal expenses.
A Bank of New York Mellon spokesman said the institution was pleased to reach an agreement that will allow it to continue working for the state.
When the lawsuit was first filed the bank called it "unwarranted" and said that it "reflects a flawed understanding of foreign currency markets."
Kevin Heine, a spokesman for Bank of New York Mellon, said Friday that the bank "viewed these issues as commercial matters and we have taken a pragmatic approach to resolving them."