State Street Releases New Vision Series Report on Pensions
March 17 2010 - 9:00AM
Business Wire
State Street Corporation (NYSE: STT), one of the world’s leading
providers of financial services to institutional investors, today
released its latest Vision paper examining the current challenges
facing defined contribution (DC) pension systems following the
significant volatility in the global financial markets over the
last two years. Entitled “Pensions: Strengthening the DC Model for
the Future,” the report assesses the relative strengths of global
DC systems and details best practices across governance and design
of pension plans.
This new Vision paper follows State Street’s earlier report on
pensions published in 2008, and highlights the significantly
altered investment environment facing pension systems as well as
recent developments in the DC marketplace.
“As the shift to defined contribution retirement plans continues
to accelerate as the primary vehicle for providing for retirement,
a growing need for education focused on saving for retirement,
including the importance of starting early and making regular
contributions, has emerged, ” said James Phalen, executive vice
president of State Street. “Because DC represents the future of
retirement plan models in many markets, the financial services
industry should continue to work creatively and collaboratively
with other stakeholders — including policymakers — to solve one of
the most compelling social challenges of our time: ensuring
sufficient funding to support a decent quality of life in
retirement for an aging population.”
With the growth of DC assets now outpacing defined benefit (DB)
assets globally,¹ the debate has been renewed about the relative
merits of all aspects of DC plans, from governance practices to
appropriate investment options.
The Vision paper states, “Reduced participant account balances
have illustrated the inherent disconnect in most DC models: Risk is
transferred onto the individual without always transferring
adequate knowledge or oversight, despite more than a decade of
efforts on the part of practitioners and plan sponsors to educate
and inform individuals about retirement planning.”
State Street provides investment management and investment
servicing for more than $4.4 trillion in pension assets (as of
December 31, 2009). State Street also partners with policymakers
and industry groups around the world to facilitate the development
of pension systems.
State Street’s Vision Series of in-depth reports is intended to
advance understanding of key themes and trends in the financial
services industry. A copy of this pensions paper can be downloaded
at www.statestreet.com/vision or to order a hard copy please email
vision@statestreet.com. Previous papers in State Street's Vision
series address a range of topics, including UCITS IV, sovereign
wealth funds, hedge funds and private equity, and derivatives
servicing.
About State Street
State Street Corporation (NYSE: STT) is one of the world's
leading providers of financial services to institutional investors,
including investment servicing, investment management and
investment research and trading. With $18.8 trillion in assets
under custody and administration, and $1.9 trillion in assets under
management at December 31, 2009, State Street operates in 25
countries and more than 100 geographic markets worldwide. For more
information, visit State Street’s website at
www.statestreet.com.
¹Source: 2010 Global Pensions Assets Study, Towers Watson,
January 2010
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