Filed Pursuant to Rule 424(b)(3)
Registration No. 333-23633
AMERICAN BAR ASSOCIATION MEMBERS RETIREMENT PROGRAM
UNITS OF BENEFICIAL INTEREST IN
THE AMERICAN BAR ASSOCIATION MEMBERS/STATE COLLECTIVE TRUST
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SUPPLEMENT DATED DECEMBER 22, 1998
TO PROSPECTUS DATED APRIL 8, 1998
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INTRODUCTION
This supplement to the Prospectus dated April 8, 1998 for units of
beneficial interest in the American Bar Association Members/State Street
Collective Trust describes changes with respect to the deductions and fees paid
to State Street Bank and Trust Company ("State Street") and the American Bar
Retirement Association ("ABRA") in connection with the American Bar Association
Members Retirement Program (the "Program"). Generally, terms not defined in this
supplement that are defined in the Prospectus have the same meanings given to
them in the Prospectus. You should read this supplement in conjunction with the
Prospectus, which accompanies this supplement or which has previously been sent
to Participants. Upon written or oral request, State Street will provide a copy
of the Prospectus without charge to each recipient of this supplement. Direct
requests for a Prospectus to State Street Bank and Trust Company, Attention ABRA
Customer Service, Post Office Box 9109, Boston, Massachusetts 02209-9109;
telephone number (800) 348-2272.
CHANGES TO DEDUCTIONS AND FEES
As described in the Prospectus on pages 56 to 61, various fees are paid
to State Street and ABRA for their services in connection with the Program. On
November 9, 1998 State Street and ABRA amended and restated the agreement under
which State Street provides administrative and investment services to the
Program and pursuant to which the fees paid to State Street and ABRA in respect
of the Program are determined. As a result of the new agreement, certain changes
in the fees paid to State Street and ABRA will take effect on January 1, 1999.
These changes are set forth below.
PROGRAM EXPENSE FEE
For the calendar year ending December 31, 1999, the program expense fee
payable to State Street is $7,450,000. This fee will accrue daily and be payable
monthly. After January 1, 2000, the program expense fee payable to State Street
will be based on the number of participants in the Program as follows: The
monthly fee will be one-twelfth of the sum of (i) $750,000 plus (ii) $191
multiplied by the number of participants in the Program other than active
participants without account balances as of the last Business Day of the
immediately preceding month, plus (iii) $191
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multiplied by the excess, if any, of the number of active participants of the
Program without account balances over the number of such participants as of
December 31, 1998. This fee will accrue daily and be payable monthly.
Benefit payments under the Program generally are made by check. Within
five Business Days before the check is payable, funds for the payment of
benefits will continue to be transferred to a non-interest bearing account with
State Street. There is no separate fee charged for benefit payments; rather,
State Street retains any earnings attributable to outstanding benefit checks,
which has been taken into account in setting State Street's fees under the
Program. The program expense fee set forth above reflects a $300,000 reduction
for earnings attributable to outstanding benefit checks.
Effective January 1, 1999, the program expense fee payable to ABRA will
be based on the total assets in the Program (other than assets in Self-Managed
Accounts) at the following annual rates:
Value of Rate
Program for ABRA
Assets --------
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First $500 million ............................................. .075%
Next $850 million .............................................. .065
Next $1.15 billion ............................................. .035
Next $1.5 billion .............................................. .025
Over $4.0 billion .............................................. .015
The fee will accrue daily and be payable to ABRA monthly based on the
level of assets in the Program as of the end of the last Business Day of the
preceding month.
The fee schedule set forth above may be increased only by written
notification of such increase to all Employers, and shall become effective after
a minimum of 60 days from such notice.
TRUSTEE, MANAGEMENT AND ADMINISTRATION FEES
Effective January 1, 1999, the fee payable to State Street for its
management, administration and custody of the assets in the Investment Options
(other than Self- Managed Accounts and Equitable Real Estate Accounts) shall be
payable at the following annual rates:
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Aggregate Value of Assets in Aggressive Equity, Rate
Balanced, Growth Equity, Index Equity, Intermediate ----
Bond, International Equity, Stable Asset Return and
Value Equity Funds
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First $1.0 billion .................................................. .15%
Next $1.8 billion ................................................... .058
Over $2.8 billion ................................................... .025
This fee is accrued on a daily basis and paid monthly from the assets
of the Funds. The trustee, management and administrative fees attributable to
the Funds held by the Structured Portfolio Service are also accrued and paid
from the Funds.
STRUCTURED PORTFOLIO SERVICES FEES
Effective January 1, 1999, assets allocated to portfolios of the
Structured Portfolio Services will no longer be charged a separate annual fee.
However, the Funds in which the portfolios of the Structured Portfolio Service
are invested will bear the program expense fee, the trustee, management and
administrative fees and the investment advisor fees applicable to those Funds.
SELF-MANAGED ACCOUNT FEES
Transaction fees for the purchase or sale of securities for the account
of an Eligible Investor will continue to be charged in accordance with the
schedule of rates communicated from time to time to Eligible Investors with
Self-Managed Accounts. Effective January 1, 1999, assets invested through
Self-Managed Accounts will no longer be subject to the program expense fee.
INVESTMENT ADVISOR FEES AND ORGANIZATIONAL EXPENSES
Investment Advisor fees and the organizational expenses with respect to
each of the Funds described on pages 58 to 60 of the Prospectus will not change
as a result of the changes described above.
ABA RETIREMENT PLAN AND INDIVIDUALLY DESIGNED PLAN FEES AND ABA DEFINED BENEFIT
PLAN FEES
The ABA Retirement Plan and Individually Designed Plan Fees and ABA
Defined Benefit Plan Fees described on pages 60 and 61 of the Prospectus will be
eliminated effective January 1, 1999.
December 22, 1998
