The $46 billion Massachusetts pension fund said it might drop Bank of New York Mellon Corp as its partner for foreign exchange trading, after accusing the company of overcharging the fund on trades.

We are testing the market to see what other options are available to us, said Michael Trotsky, executive director of the Massachusetts public pension fund. We want to see if we can do a better job.

The news underscores the pressure being put on the forex programs run by two of the world's top custodian banks, BNY Mellon and Boston-based State Street Corp . Several lawsuits by public pension funds have been filed against the two companies, which deny any wrongdoing.

BNY Mellon has been the Massachusetts pension fund's financial custodian since 2000 and has handled forex trading as part of that contract. Massachusetts is evaluating whether to separate the forex role from the custodian agreement.

Trotsky said the pension fund plans to interview a number of candidates this month to replace BNY Mellon after issuing a request for proposals. He declined to name the candidates. He said a decision could be made before the fund's December 6 board meeting.

We're evaluating the responses, Trotsky told Reuters during a telephone interview.

BNY Mellon spokesman Kevin Heine declined to comment for this story.

In June, Massachusetts Treasurer Steve Grossman said an audit showed BNY Mellon had overcharged the pension fund $30.5 million on forex trades since 2000. BNY Mellon has denied any wrongdoing.

Forex trading is a lucrative franchise for BNY Mellon and State Street. At BNY Mellon, for example, forex accounted for $221 million, or 6 percent, of the company's third-quarter revenue.

During a conference call last week, BNY Mellon Chief Executive Gerald Hassell said the bank would not be coerced into paying huge sums for no wrongdoing. He also said the company had not seen any client attrition because of the forex controversy.

Trotsky said the Massachusetts pension fund continues to be happy with BNY Mellon as its financial custodian.

They're a good firm with that stuff, Trotsky said.

In fact, he said, he has told his team to keep a good relationship with BNY Mellon and not talk about forex issues.

(Reporting by Tim McLaughlin in Boston; Editing by Lisa Von Ahn and John Wallace)