State Street Bank Named Custodian For N.Y. City Pension Funds

State Street Bank has been selected as master custodian for the five New York City pension funds, city Comptroller John Liu announced Friday.

Bank of New York Mellon’s contract is expiring. Liu expects the conversion to take effect on the fall.

The $137 billion pension system includes equity, fixed income, private market accounts and hedge funds.

According to Liu, State Street’s submission was the lowest cost proposal and offers services that will increase audit transparency. The funds hold more than 2,000 accounts.

“Implementing this proposal will make our top-flight pension fund management even stronger,” said Liu, a mayoral candidate.

Liu’s staff evaluated the proposals after issuing a request for proposals on June 27, 2012.

The pension funds consist of the of the New York City Employees’ Retirement System, Teachers’ Retirement System, New York City Police Pension Fund, New York City Fire Department Pension Fund and the Board of Education Retirement System.

Liu said Thursday that based on preliminary unaudited numbers, the funds recorded investment returns of 12.3% for fiscal year 2013, which ended June 30. The return, according to Liu, exceeded by about 1% the combined and weighted average of the funds’ various asset benchmarks.

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