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Citigroup, State St. team
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December 8, 1999: 8:26 a.m. ET
Banks form jointly owned retirement plan venture with $200B in assets
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NEW YORK (CNNfn) - Citigroup Inc. and State Street Corp. Wednesday unveiled plans to form a joint venture that will focus on administering and managing benefits and retirement services for corporate and not-for-profit organizations.
The new venture, to be co-owned equally by Citigroup (C) and State Street (STT), will be called Citistreet and have assets under management of some $200 billion. It will focus on managing benefit, investment and retirement plans for companies’ workers. Financial terms weren’t disclosed.
The agreement creates a participant in the so-called defined-contribution retirement market, which consists mainly of 401(k)s -- financial programs in which employees invest a percentage of their pay into a retirement fund and often get a matching portion from their employer.
As part of the agreement, State Street will bring its 401(k) business as well as Wellspring Resources, its benefits-administration business, to the table. Citigroup will contribute its Copeland Cos. retirement-plan business, the companies said.
Citigroup had been considering acquisitions to boost the amount of money it manages for its wealthier clients. The company, which owns securities firm Salomon Smith Barney and Travelers insurance, has also been looking to expand into the 401(k) retirement savings market.
Boston-based State Street, through its fund-management unit State Street Global Advisors, oversees corporate retirement plans for some of the country’s largest companies, including Boeing Co. (BA) and Lockheed Martin Corp. (LMT). It helps oversee about $180 billion within these plans.
Citigroup’s Copeland unit, by comparison, has about $20 billion of assets under management in the U.S. retirement market. It’s focused primarily on overseeing pensions for employees of small- to mid-sized companies.
Citigroup is the biggest financial services company in the U.S., while State Street is the country’s second-largest manager of corporate retirement plans. The new Citistreet, which is expected to be up and running by mid-2000, will be headquartered in Quincy, Mass., and handle up to 4 million plan participants, the companies said.
Citigroup shares rose 1-1/32 Tuesday to 57-3/16. State Street shares fell 1-3/16 to 71-3/8. 
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Citigroup
State Street
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