The Bermuda Hospitals Board have begun a probe into the mishandling of a $40 million pension fund for hospital workers.

Management of the deferred benefits plan, which covers more than 1,000 hospital workers, was altered in 2000.

It's understood the new arrangement led to $800,000 of commission fees, performance fees and management fees being charged by third parties including administrators Emerald Financial Group after they took over four years ago.

And slow growth rates of the fund sparked concern from members.

Shadow Health Minister Michael Dunkley said rumblings had growing about the pension fund for years.

He said: "I believe the administration of the fund was changed a few years ago after the PLP first came into power.

"Beneficiaries had a number of concerns from the very beginning about the handling of it but were unable to get answers to their questions from concerns about performance and accountability about where their contributions were."

He said there was not the normal flow of information about investments expected of people trusted with such an important investment.

David Bolden, president of Emerald Financial, said: "As far as we are concerned the plan is well run and the performance is there."

Asked to elaborate on that statement Mr. Bolden said he preferred to refer this newspaper to the trustees and suggested calling Beverlyn Hall of the Botanical Trustee Company (PVT) Ltd.

However she declined to comment and said Bermuda Hospitals Board should comment.

Bermuda Hospitals Board chairman Jonathan Brewin said the hospital was cooperating with the probe into the handling of the fund done in conjunction with the Pension Commission.

A statement released last night said: "Concerns have been brought forward by the Bermuda Public Services Union about the Bermuda Hospitals Board's pension fund. We are reviewing these concerns with the trustees of the plan (which includes representation from both unions) and the Pension Commission.

"In accordance with our normal operating practices, the Bermuda Hospitals Board is scheduled to issue a request for proposal for the provision of pension services to its employees shortly. We will provide a full update to our employees as swiftly as possible."

Bermuda Public Services Union General Secretary Edward Ball said he would not comment on the matter until the investigation is complete.

The Finance Ministry said it was a matter for the Pension Commission who declined to return calls.