FROM: Debby Cherney, Chief Executive Officer
Donald Pierce, Chief Investment Officer
Amy McInerny, Chief Financial Officer
SUBJECT: State Street Bank & Trust Company Fee Schedule and updated Service Level Document
RECOMMENDATION:
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Recommend that the Board approve an updated Fee Schedule and Service Level Document for custody services and reporting with State Street Bank & Trust Company, subject to documentation approved by Chief Counsel.
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BACKGROUND:
State Street Bank & Trust Company ("State Street") has served SBCERA as its custody bank since 1982.
The last formal Request for Proposals for custody services was completed in 2016 with assistance from NEPC. Services were evaluated with a framework that included service level governance, service level risk management, client service delivery model, operational risk, ability to handle SBCERA's complex portfolio, and differentiated set of solutions. At that time, the Board approved a new contract with State Street, after a thorough evaluation of the four proposals it received at the time. The 2016 staff report reflected that State Street was selected based on several factors, including but not limited to: (1) the avoidance of uncertainty and potential transition issues that might hamper any switch to a new provider; (2) none of the other three proposals demonstrated that those firms would deliver services clearly superior to that of the incumbent (State Street); and (3) State Street's fees were the lowest of the group. The contract is indefinite, and terminable upon written notice.
Overall, staff has been happy with the scope, breadth, and quality of services provided by State Street. Staff does believe that there are a few areas where an updated service level understanding would benefit SBCERA. Accordingly, staff approached State Street to seek an updated fee structure and service level understanding.
State Street provided an updated proposal to SBCERA. The Executive Summ...
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