Paternoster, the specialist pension buy-out insurance company, has appointed State Street Corporation (“ State Street”; NYSE:STT) to provide it with custody and securities lending services.

State Street is appointed after a competitive tender process. The business will be serviced from State Street’s operations in Edinburgh and London.

Commenting on the appointment, Mark Wood, Paternoster chief executive, said, “We are delighted to have formed this partnership. State Street’s expertise meets Paternoster’s objective of collaborating with only the most skilled and accomplished in the industry. The tender process demonstrated their determination to work in support of Paternoster on behalf of our customers. This appointment will help Paternoster deliver the best possible returns and benefits for its scheme members.”

Alasdair Reid, head of State Street’s Asset Owner Group in the UK, added, “The importance of this new relationship for State Street cannot be overstated. State Street has recognised that more and more closed defined benefit schemes will transfer their liabilities to the bulk annuity market as a long-term solution. As such we view our relationship with Paternoster as another strategic component to the growth of our UK and European asset owner business.”

3 October 2006

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Notes to Editors:

About Paternoster
Paternoster is a new UK life assurance company, launched to transfer off balance sheet the risk associated with companies’ final salary/defined benefit pension liabilities. Paternoster will transfer the risk of these pension schemes and manage them on behalf of companies, bringing specialised mortality and investment expertise, a lower cost-base and a commitment to customer service.

On 10 April 2006, Paternoster announced that it had secured £500 million of equity financing from a consortium of institutions led by Deutsche Bank and Eton Park International LLP.

Paternoster gained approval from the FSA to operate as a life assurance company on 28 June 2006. Following FSA approval, Paternoster has now drawn down an initial tranche of £250 million of capital and has been approved as the annuity provider to members of a number of schemes with a very active further pipeline.

The Board:

• Mark Wood – Chief Executive

Non Executive:

• Ron Sandler - Chairman.A past President of the Institute of Financial Services, he also chairs the education charity, pfeg. In 2002, he led an independent review of the long-term retail savings industry. He was previously Chief Operating Officer of NatWest Group and before that, Chief Executive of Lloyd’s of London

• Nick Campsie - Eton Park International

• Sir Howard Davies – Director of the London School of Economics. He was previously Deputy Governor of the Bank of England after three years as Director General of the Confederation of British Industry

• Yves Dermaux – Deputy Head of Market Risk Management at Deutsche Bank

• Jeremy Godford – Principal of Tillinghast Towers Perrin and President of the Institute of Actuaries between 2002 and 2004

• Baron Leitch of Oakley – Lord Leitch was Chairman and Chief Executive of UKISA/ASIA Pacific Division and Head of Zurich Financial Services’ Global Life business

• Kit Pemberton – A former Royal Navy Officer and the co-founder of aviation services group The Aeromega Group of Companies

• Philip Scales – Managing Director of IOMA Fund and Investment Management Limited

• Lord Turner of Ecchinswell – A former Director General of the Confederation of British Industry and vice-chairman of Merrill Lynch Europe, he is currently a non-executive director of United Business Media plc and Standard Chartered PLC. He also chairs the UK Low Pay Commission and the UK Pensions Commission.

For further information on Paternoster, please see www.paternoster.uk.com.

About State Street
State Street Corporation (NYSE: STT) is the world's leading specialist in providing institutional investors with investment servicing, investment management and investment research and trading services. With $10.9 trillion in assets under custody and $1.5 trillion in assets under management as at 30 June 2006, State Street operates in 26 countries and more than 100 geographic markets worldwide. For more information, visit State Street’s web site at www.statestreet.com.