March 18 (Bloomberg) — An investigator for North Carolina’s public employees’ union asked the state auditor to investigate what it called hundreds of millions of dollars of undisclosed fees in the state pension fund.
The union said Treasurer Janet Cowell is failing to disclose “all direct and indirect placement fees, asset fees, performance fees and any other management fees” in the $86 billion pension fund, according to a letter that Benchmark Financial Services Inc., sent to Beth Wood, the North Carolina auditor, on March 17. The fees total about $1 billion, said Edward Siedle, president of Ocean Ridge, Florida-based Benchmark, which the union hired. The firm investigates the money-management industry.
Cowell disputes Benchmark’s findings, said Schorr Johnson, a spokesman, in an e-mail. The treasurer “reported to the General Assembly all the fee information that must be provided,” Johnson said. That information was provided before a new state law passed in 2013 expanded disclosure requirements, Johnson said.
Extra fees on investments could cut the return to the pension fund and lower the amount of money available to pay retirees. Toni Davis, spokeswoman for the State Employees Association of North Carolina, and Bill Holmes, a spokesman for Wood, didn’t immediately respond to requests for comment.