Benefits of SC settlement with NY bank questioned

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Associated Press

Posted on July 8, 2013 at 6:00 AM

Updated Monday, Jul 8 at 6:00 AM

COLUMBIA, S.C. (AP) — Critics say the $25 million settlement Treasurer Curtis Loftis signed with Bank of New York Mellon Corp. is a bad deal for South Carolina's retirees.

Loftis says the deal's value actually tops $100 million when including potential savings over the 10-year contract that the settlement awards the bank. Loftis has not provided a breakdown. Critics contend the savings don't exist.

Under the settlement, the bank credited $25 million to the state's investment accounts, including $20 million to the state's pension portfolio.

The treasurer's office sued the bank in January 2011, accusing it of losing $200 million in retirees' money through bad investments. State retirees question why the state would reward such behavior with a 10-year deal.

The investment commission says any savings are far outweighed by new upfront fees.

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