Low Fees Are a Significant Factor
March 9, 2020
Pennsylvania Treasurer Joe Torsella has entered into an agreement with Bank New York Mellon to serve as the commonwealth’s custodial banking partner. The bank was selected, in part, for its significantly lower fees.
Pennsylvania Business Report said the agreement includes all Commonwealth funds, including the state’s largest pension systems: the Public School Employees’ Retirement System (PSERS), State Employees’ Retirement System (SERS), and Pennsylvania Municipal Retirement System (PMRS). A Treasury Department spokesperson told Banking Mid Atlantic the custodial banking agreement covers $118 billion in Commonwealth of Pennsylvania funds.
Torsella said, “This historic agreement elevates the level of service by BNYM. The agreement lays out very specific service details with financial repercussions if BNYM violates the commitments and strict standards we expect.” As compared to 17 other investors of similar size and scope, research found that Pennsylvania is paying the lowest fees, which are 46 percent below the peer average, with BNYM.
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