Report Assesses the Relative Strengths of Global DC Systems and
Details Best Practices Across Pension Plan Governance and Design
BOSTON--(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.
(1)Source: 2010 Global Pensions Assets Study, Towers Watson, January 2010
Source: State Street Corporation
Contact: State Street Corporation
Carolyn Cichon, + 1-617-664-8672
or
Arlene Roberts, + 1-617-664-3933