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Returns on Corporate Pension Plans at the Top of State Street's Master Trust Universe

"The State Street master trust universe of retirement plans, foundations and endowments had a median return of 4.5% in the third quarter and a median return of 15.8% for the year ended Sept. 30. Corporate defined benefit plans had the highest median returns for the quarter, with 5%, followed by Taft-Hartley plans at 4.7%; public pension plans, 4.6%; and foundations and endowments, 4.5%."

Wall Street Reform Act Provisions Related to Corporate Governance and Executive Compensation

Excerpt: This Alert addresses the Acts executive compensation and corporate governance provisions. For the most part, the Act is not prescriptive with regard to these requirements, leaving much of the heavy lifting to subsequent rulemaking by the Securities and Exchange Commission and the national securities exchanges and associations.

Republicans Ask Federal Retirement Plan for Details on BlackRock, State Street's Votes

"Sens. Pat Toomey (R. Pa.) and Ron Johnson (R. Wis.) asked the Federal Retirement Thrift Investment Board, which oversees the government's $760 billion Thrift Savings Plan, to detail how [BlackRock Inc. and State Street Global Advisors] cast proxy votes over everything from who sits on corporate boards to executive pay and priorities at companies. They have also requested past communications with the firms and other information to determine whether the asset managers voted in ways that violated their responsibilities to those in the savings plan."

Court Dismisses Most Claims in State Street Stock Suit

Excerpt: A federal court has dismissed most claims against State Street Corporation and its retirement plan fiduciaries regarding the offering of company stock as an investment in its Employee Stock Ownership Plan.

Wall Street and Corporate Execs Turn the Screws on American Workers

"This is the new pension normal. CEO compensation which includes lavish pensions is soaring to obscene levels while companies are looking to slash pension costs, offloading them to insurers or employees, or if they go belly up, pensions become the problem of some cash-strapped government pension agency which backstops pensions and slashes benefits.... In the U.S., there's a dangerous shift in pension policy which will come back to haunt the country as social welfare costs skyrocket and pension poverty soars, placing more pressure on an ever growing debt problem."

Wall Street Reform Provisions Relating to Corporate Governance, Executive Compensation and Disclosure (PDF)

Excerpt: Under Dodd-Frank shareholders of U.S. public companies will have a nonbinding 'say on pay' vote for named executive officers, new standards relating to the independence of compensation committees and compensation advisors are mandated, current and former executive officers may be forced to return compensation if a restatement of financial statements triggers a 'clawback'[.]

SEC Charges State Street for Pay-to-Play Scheme

"State Street Bank and Trust Company agreed to pay $12 million to settle charges that it conducted a pay-to-play scheme through its then-senior vice president and a hired lobbyist to win contracts to service Ohio pension funds. An SEC investigation found that [the head of] State Street's public funds group responsible for serving as custodians or sub-custodians to public retirement funds, entered into an agreement with Ohio's then-deputy treasurer to make illicit cash payments and political campaign contributions. In exchange, State Street received three lucrative sub-custodian contracts to safeguard certain funds' investment assets and effect the settlement of their securities transactions."

State Street Bank's Notice of Proposed Settlement of ERISA Class Action

Excerpt: A proposed settlement has been made in the State Street Bank and Trust Company consolidated ERISA Class Actions (collectively, the 'Action') in the amount of $89,750,000.00. The terms and conditions of the proposed settlement are set forth in a Settlement Agreement dated August 18, 2009 (the 'Settlement Agreement'). The Action has been brought as a class action on behalf of a class of ERISA Plans that invested in unregistered commingled funds (listed at Schedule A of the Settlement Agreement) (the 'Funds') that were managed by State Street. For the sake of clarity, the term 'Funds' shall not include any investment portfolio of SSgA Funds, a series mutual fund registered under the Investment Company Act of 1940, as amended. The Action alleges that State Street violated its fiduciary duties under the Employee Retirement Income Security Act ('ERISA') by, inter alia, imprudently managing the Funds, causing the various ERISA Plans to suffer losses.

Minnesota Firm Slaps State Street with Subprime Suit

Excerpt: State Street has been hit with another federal court lawsuit alleging it took positions in risky subprime mortgage-backed securities in its Daily Bond Market fund, without telling anyone it had done so. Apogee Enterprises, a Minneapolis-based glassware manufacturer, charged that the investment decisions State Street made regarding the bond fund represented breaches of State Street's fiduciary duties under the Employee Retirement Income Security Act (ERISA) that ended up costing its 401(k) plan more than $5 million.

Trustee Pulls Corporate Strings with Weight of New York State Pension Fund

"As [New York's] state comptroller, Tom DiNapoli is not a member of Albany's exclusive three-men-in-a-room club. But inside the board rooms of some of the world's largest corporations, DiNapoli has come to be a recognized name of influence. His calling card? He is the sole trustee of the $150 billion state pension fund and where that money is invested. That makes him a player on Wall Street."

House Judiciary Committee Issues Subpoenas to BlackRock, State Street for ESG Documents

"The U.S. House Committee on the Judiciary ... issued subpoenas to BlackRock and State Street Global Advisors ... [requiring] both asset managers to turn over all documents and communications related to decarbonization goals, related investment decisions and agreements with other organizations related to decarbonization and environmental, social and governance investing."

Self-Dealing Lawsuit Filed Against State Street

"The complaint alleges that many of the funds offered by State Street in its staff retirement plan were selected and retained because the defendants benefited financially from their inclusion, to the detriment of the participants." [Gomes v. State Street, No. 21-10863 (D. Mass. complaint filed May 25, 2021)]

State Street Global Retirement Survey 2015 (PDF)

16 pages. "Among U.S. investors participating in an employer-sponsored retirement plan, 51% of these 'in-plan savers' feel extremely or very confident about their retirement readiness, up from 36% last year.... Among U.S. in-plan savers, 66% say the top reason for feeling confident is 'having invested appropriately.' In addition, 80% say 'have not saved enough' is the top reason for lack of confidence."

State Street May Face SEC Action Over Retirement Plan Business

"State Street Corp. said ... that the Securities and Exchange Commission is planning an enforcement action related to its solicitation of business from public retirement plans. The Boston-based company was notified via a Wells notice from the securities regulator, according to a filing on Thursday [June 18]. The notice indicates that the agency intends to pursue civil charges but does not guarantee that it will take action."

State Street Global Investors Comment Letter to DOL on Lifetime Income Illustration in Pension Benefit Statements (PDF)

"[W]hile we support the concept of helping participants gain perspective on their future monthly income potential based on a current balance and an end-state balance, we believe the proposed approach to monthly income projections is just one step and the participant messaging should be carefully crafted to explain that there is room for error based on the uncertainties that a relatively long time horizon for these projections may entail."

Supreme Court Allows GM Workers' Pension Claim Against State Street Bank

"Without comment, the court refused ... to review the case and let stand a February ruling from a lower court that allowed the workers to sue State Street Bank and Trust Co. The 2009 lawsuit said the bank should have acted faster to sell a 401(k) investment fund's shares in GM stock after the automaker's business troubles came to light.... State Street said ERISA had shielded it from liability since it did not cause the losses and the employees themselves had decided to invest in the GM fund."

State Street Unsuccessful in Request for Supreme Court Review of 6th Circuit Decision in Stock Drop Case

"The U.S. Supreme Court ... will not review the ... Sixth Circuit's decision on the extent to which Section 404(c) of the [ERISA] shields plan fiduciaries from claims of imprudent investment in employer stock ... In its petition for review, State Street [had] asked ... whether ERISA Section 404(c) provides fiduciaries of otherwise-qualified plans a defense to liability against an imprudent investment claim when the participant's control over the investment is the proximate cause for the loss. It [had] also asked the court to consider ... whether liability under ERISA Section 409(a) for a breach of fiduciary duty claim requires that the breach constitute the proximate cause of the loss." [State Street Bank and Trust Co. v. Pfeil, No. 12-256 (cert. denied 12/3/12)]

Are State Pension Funds Paying Wall Street Too Much?

"A recent report by two Maryland think tanks makes the case for state retirement systems to dump Wall Street investment firms for more passive equity index funds. The study by the conservative-leaning Maryland Tax Education Foundation and Maryland Public Policy Institute outlines fees state pension funds pay investment firms, totaling $7.8 billion nationwide in 2011. This price tag is too high, the authors argue, given their meager returns in recent years."

Brief Review of Pfeil v. State Street Bank & Trust Co

"The fiduciary cannot escape its duty simply by asserting that the plaintiffs caused the losses by choosing to invest in the GM Fund. Such a rule would improperly shift the duty of prudence to monitor the menu of investments to participants. The fact that a participant exercises control over assets does not automatically trigger section 404(c) safe harbor." [Pfeil v. State Street Bank & Trust Co., No. 10-2302 (6th Cir. Feb. 22, 2012)

State Street Stock Drop Suit Filed by General Motors' 401(k) Participants Gets Tossed

Excerpt: [The District Judge] decided that State Street did not cause losses to the plaintiffs' accounts because the employees still had control over their investment selections.