Updated with correction
Denver Employees Retirement Plan hired BNY Mellon as global custodian of the $1.85 billion retirement plan, confirmed Steven Hutt, executive director.
BNY Mellon succeeds J.P. Morgan Chase, pending approval by Denver Mayor Michael Hancock.
Mr. Hutt said in a telephone interview that the retirement plan board also approved moving the management of three index funds —an S&P 500 fund with $151 million, a MSCI EAFE fund with $94 million and a Barclays Aggregate Bond fund with $153 million — to BNY Mellon from Northern Trust.
Mr. Hutt said BNY Mellon and Northern Trust were the two finalists in the custodian search. He added that the system was replacing J.P. Morgan Chase because of $6 million in securities lending losses and better prices from BNY Mellon. He also said the system experienced service problems with J.P. Morgan Chase, while BNY Mellon made service commitments to the system in its proposal.
The system is suing the bank for the losses, Mr. Hutt said.
“They (J.P. Morgan Chase) have put all of that loss on us and the other clients,” Mr. Hutt said. “BNY Mellon and Northern Trust made a business decision to make their clients whole, and we absolutely took notice of that.”
Separately, the board also approved allocating $150 million to Eagle Capital Management for active domestic large-cap equities. Funding comes from a Russell 1000 Value index passively managed by Northern Trust.
J.P. Morgan Chase spokesman Darin Oduyoye could not immediately be reached for comment.