Nashville (Tenn.) & Davidson County Metropolitan Government Benefit Board hired Benchmark Financial Services to do an audit of fees the $1.3 billion pension fund pays to its money managers, said Karl F. Dean, director of law for the metro government. Mr. Dean said the board wants to ensure it is paying fees as contracted and is not being overcharged.
The study is an outgrowth of a 2000 KPMG audit that found inherent conflicts of interests, including soft-dollar and directed-brokerage arrangements, with PaineWebber, when it was the investment consultant to the fund for several years until it was dropped in 2000. That audit led to a $10 million settlement this year by UBS PaineWebber, the successor to PaineWebber, and its then-consultant William Keith Phillips.
"The audit raised enough questions we felt we had to look into (manager) fees," Mr. Dean said, adding that he hopes the audit will be completed in the first quarter.