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FSA probes State Street over alleged pension fee overcharging

by Daniel Grote on Nov 23, 2012 at 07:57

The Financial Services Authority is investigating allegations US custodian bank State Street overcharged Ireland's state pension fund, as well as the Royal Mail and Sainsbury pension funds, according to the Financial Times.

Ireland's national debt agency has notified Irish police that State Street took €3.2 million (£2.6 million) in improper fees from the national pension fund, which was selling €4.7 billion of assets to generate cash to invest in the country's banks.

State Street said it had reimbursed the Irish debt agency and several other clients. The FT cited sources close to the situation as saying they included the Royal Mail and Sainsbury pension funds.

John Corrigan, chief executive of Ireland's National Treasury Management Agency, said it was awaiting the outcome of a FSA investigation before deciding whether to push for further compensation.

State Street said in a statement: 'In a limited number of instances, we charged commissions on transition management mandates that were not consistent with our contractual agreements.'

'The actions of these former employees and their interaction with a limited number of clients do not reflect the high standards of conduct, communications and transparency that State Street expects. We took swift and appropriate disciplinary actions in response to this conduct.'