UK/US - Mining company Rio Tinto has appointed State Street to provide global custodian services for its pension funds in the UK, US and Canada.
State Street will be responsible for $8bn (€5.77bn) assets of the pension funds in the three countries, and will provide the schemes with custody, fund accounting, securities lending and investment analytics services.
Figures from Rio Tinto's annual report for 2008 revealed the fair value of its plan assets, including those in Australia, Switzerland and other European countries, was $10.5bn on an IAS19 basis, however the combined deficit of the schemes was $2.65bn at the end of 2008.
Michael Wrobel, of Rio Tinto, said: "State Street's ability to service our schemes in multiple domiciles though a single, global platform was an attractive option for us, whilst also allowing us to reduce costs across geographies."
State Street also confirmed the investment services for the pension schemes would be split between its operations in London and Montreal.
Steve Smit, head of investor services business in the UK, Middle East and Africa for State Street, added: "We are seeing increased demand from customers to streamline their reporting requirements across service providers."
Rio Tinto's annual report also showed that over the last year pension contributions to its schemes rose from $246m in 2007 to $615m, of which $52m went towards defined contribution (DC) schemes, including US 401K plans, while $10m was contributed towards industry-wide or multi-employer plans and $53bn paid for other benefits.
However, the report noted Rio Tinto's expected contributions for 2009 are estimated to be around $150m higher than in 2008, as the figures showed the actual return on plan assets in 2008 was -$2.9bn.
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