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State Street Shifts College Money Market Assets Into N.Y. Life Funding Agreement

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NU Online News Service, Aug. 13, 2003, 1:20 p.m. EDT – State Street Corp., Boston, has added stable value investment options from New York Life Investment Management L.L.C., Parsippany, N.J., to a 529 college savings program it manages for The Education Trust Board of New Mexico.

State Street distributes the CollegeSense program, its 529 savings program, through a NYLIM affiliate, NYLIFE Distributors Inc.

Some holders of the State Street 529 accounts choose their own investment allocations.

When holders put assets in the new stable value accounts, State Street will invest 90% of the assets in a funding agreement backed by NYLIM’s parent, New York Life Insurance Company, New York, and 10% in a NYLIM money market fund.

The funding agreement, which is backed only by New York Life and not by any government agency, pays a fixed annual interest rate that is set in advance for each calendar year.

NYLIM now guarantees an annualized rate of return of 3.49% for Class A shares, 2.74% for Class B shares and 2.49% for Class C shares.

State Street manages some 529 program funds for the account holders. The company has been investing 5% to 40% of the assets in those portfolios in money market funds. Now State Street will shift 90% of the assets that were in the money market accounts into the New York Life funding agreement, NYLIM says.


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