Pennsylvania State Treasurer Barbara Hafer can void a long-term custodial contract extension her predecessor awarded State Street Bank, Pennsylvania's Commonwealth Court ruled yesterday.
A three-judge panel, in a unanimous ruling, rejected State Street's attempt to force Ms. Hafer to adhere to contract extensions awarded by then-Treasurer Catherine Baker Knoll two months before she left office. The contract covers $64 billion in assets from three major state pension funds.
The treasurer has sent RFPs for a new custodial contract and received seven bids from major custodians, including State Street, which Ms. Hafer invited to rebid. The treasurer may make a decision at the end of June, but it could be delayed. Her office declined to release the names of the other bidders.
State Street will abide by the court's ruling and won't appeal, according to a statement.