CALPERS REAPPOINTS STATE STREET TO SERVICE $200 BILLION IN ASSETS

Underscores State Street’s Ability to Meet and Anticipate the Future Needs of Longstanding Clients

Boston, February 15, 2006 – State Street Corporation (NYSE: STT), the world's leading provider of financial services to institutional investors, announced today that it has been reappointed by the California Public Employees' Retirement System, (CalPERS) to provide a range of investment services for its pension fund with more than $200 billion in assets. State Street has provided investment services to CalPERS for more than 13 years.

In 1992, State Street was appointed by CalPERS to provide master custody and recordkeeping services. Over the course of the relationship, the mandate has broadened to include a variety of other investment services. Under the terms of this five-year agreement, State Street will provide CalPERS with a wide range of investment servicing solutions including custody, accounting, daily valuation and performance and analytic services.

“State Street is uniquely positioned to handle the complexity of our investment operations. We are confident that the financial future of our members and retirees rests in good hands,” said Charles P. Valdes, chair of CalPERS Investment Committee.

“CalPERS is recognized as one of the largest and most sophisticated pension funds in the world, so we are delighted to continue our more than a decade-long partnership with them,” said Ronald E. Logue, chairman and chief executive officer of State Street. “Our U.S. pension business continues to be one of our competitive strengths and this reappointment by CalPERS further reinforces State Street’s leadership position in this market.”

“State Street has worked closely with us for more than a decade to provide customized solutions and outstanding customer service,” said Anne Stausboll, interim chief investment officer for CalPERS. “We look forward to continuing our partnership.”

“Through our dedicated public funds business, we currently service more than 40 percent of the public fund business in the United States with customers in 33 states and the District of Columbia, Puerto Rico and the U.S. Virgin Islands,” said Lee Jones, senior vice president and head of public fund servicing for State Street. “Having worked with CalPERS for many years, we have a deep understanding of its requirements and future business goals. CalPERS’ sophistication and continuously evolving investment program have helped us enhance our own capabilities over time for the benefit of all of our customers. They remain a harbinger of the needs of the public fund market. We look forward to continuing our close partnership.”

State Street has an extensive track record in providing investment solutions for public funds. The Oregon State Treasury recently retained State Street to provide a variety of investment services for $60 billion in assets as did the State of Connecticut to provide a wide range of investment services for approximately $21 billion in assets.

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