Nov 7, 2009 7:23 am US/Eastern
Bank Loses $189 Mil Of NYC Teacher Retirement Fund
BNY Mellon: Processing Error The Reason, Will Replace Money; United Federation Of Teachers Demands Probe
NEW YORK (CBS) ―
Funds have disappeared from the bank accounts of retired New York City teachers.
Direct deposits were made to thousands of accounts on Monday, but the money has vanished from the accounts of Bank of New York Mellon customers.
On Friday afternoon, the bank said it was a processing error, and said it will put back all the money accidentally withdrawn.
Officials also promised to reimburse any fees customers may have been charged because of this problem.
BNY Mellon released a statement on Friday, saying: "BNY Mellon fully appreciates the importance of reliable, accurate service in connection with bank accounts, and understands and regrets the complications this error has created for the retirees. Processing global payments averaging $1.6 trillion per day, BNY Mellon is committed to maintaining the highest standards of performance.
"BNY Mellon apologizes to the New York City Teachers Retirement Fund, The United Federation of Teachers, and the Office of the Comptroller of New York City for the processing error.
But that's not satisfying the UFT.
CBS 2 HD has learned the comptroller's office deposited almost $189 million with BNY Mellon to be put into the accounts of the pensioners of the Teachers Retirement Fund. After the funds were deposited by the bank into the pensioners' accounts, the bank inexplicably reversed the transaction and returned the money to the City. That mistake was immediately caught by the comptroller's office, which notified the bank of the situation.
The bank acknowledged that the problem was caused by an error on its end, but UFT President Michael Mulgrew said in his statement on Friday he's not willing to leave it at that.
"We have been informed that thousands of retirees who rely on electronic pension payments have had funds involuntarily withdrawn from their accounts. The city comptroller's office and the Bank of New York Mellon, who oversee the payment process, must move immediately to restore the funds and make anyone who was harmed whole. We are calling on the city and state to begin an immediate investigation into how this could have happened," Mulgrew said.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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