TODAY'S NEWS
Staff of the $98 billion California Public Employees' Retirement System, Sacramento, is asking its board to bypass the normal market bidding process in giving a new three-year contract to current master custodian State Street Bank & Trust. By approving a three-year contract, the staff stated, CalPERS will cut custodial fees by $10.4 million over the three years because of a fee reduction offered by SSB. Such a move also would avoid the cost of an RFP, align interests and technology development of the fund and SSB, and avoid conflict with the fund's trading system and investment accounting and reconciliation project.
The fund also could extend its current contract with SSB for one year, but it would not obtain the fee reduction and could suffer delays on several projects if the fund switched to a new custodian. The board is expected to approve the staff recommendation Wednesday.
