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SSgA Offers Medical Savings Accounts.

BOSTON--(BW HealthWire)--Sept. 16, l997--State Street Global Advisors, one of the largest money managers in the industry, announced today it will offer Medical Savings Accounts with investment options in 12 of its family of 17 proprietary no-load SSgA mutual funds. A Medical Savings Account (MSA) is a tax-exempt savings account established to pay medical expenses in conjunction with a high-deductible health insurance plan. This tax-advantaged savings vehicle was established by the Health Reform Act of l996, which became effective January l, l997.

"MSAs provide new and welcome tax advantages, encourage the purchase of health care insurance, and promote health care cost consciousness," said Gus Fish, principal, State Street Global Advisors. "Contributions to an MSA are tax deductible and there is no tax due either on contributions or on gains earned by the account provided the funds are used for medical expenses. If the funds are not used for medical expenses, they can be withdrawn penalty free at age 65, adding to an individual's retirement funds."

Self-employed individuals and those working for a company with 50 or fewer people who have high-deductible health insurance plans are eligible to fund MSAs. A high- deductible health plan is defined as one with a deductible of at least $l,500 and no more than $2,250 for an individual, and at least $3,000 and no more than $4,500 for a family. Contributions made to MSAs by individuals are tax deductible and those made by an employer are deductible to the employer and excluded from an employee's income. The maximum annual MSA contribution is 65 percent of the deductible for individuals, or $1,462.00, and 75 percent for families, or $3,375.00.

"The SSgA Medical Savings Account is an excellent fit with our existing product mix. By combining a new investment opportunity such as an MSA with our family of proprietary mutual funds, we can provide investors with an innovative product that will generate investment returns and allow maximum flexibility in terms of investment options," continued Fish. "We believe our clients, which include financial planners, tax professionals, doctors, attorneys, CPAs, and other small businesses, will see the advantages of such an account and will want to add it to their investment portfolios."

MSAs offer investors the dual advantages of reducing taxable income while providing the potential of substantially adding to retirement savings. For example, a 35-year-old head of household who invests the maximum amount allowed per year, or $3,375, assuming a tax rate of 28 percent and an average rate of return of 6 percent, would realize an annual tax savings of $945 taken directly off gross income. Assuming that none of the funds are withdrawn, the full amount allowed is invested each year until retirement at age 65, and a six percent rate of return, this investment would save the taxpayer $28,350 in taxes and would grow to $282,83l in retirement savings.

Using the same 30-year hypothetical example, but assuming an eight percent rate of return and no withdrawals, the maximum MSA investment would yield a retirement investment of $412,9l7. If the rate of return increases to l0 percent, again assuming no withdrawals, the retirement savings generated would be $6l0,684. -0-

SSgA's Money Market Fund, one of the 12 available funds for Medical Savings Accounts, offers investors the added convenience of check-writing privileges. MSA participants have the option of moving from the SSgA Money Market Fund into any of 11 other SSgA funds with a minimum investment of $l,000 per fund.

For further information on SSgA's Medical Savings Account, call 1-800-997-7327. Headquartered in Boston, SSgA Funds, a group of l7 mutual funds with more than $11 billion in assets, is managed by SSgA, State Street Global Advisors. SSgA has been in the mutual fund management business since l978. The funds are distributed by Russell Fund Distributors, Inc.

Shares of the SSgA Funds are not insured by the FDIC or by any other governmental agency; they are not obligations of the FDIC nor are they deposits or obligations of or guaranteed by State Street Bank and Trust Company. SSgA Funds pay State Street Bank and Trust Company for its services as investment adviser, custodian, transfer agent, and shareholder servicing agent. Investment in the Funds poses investment risks, including the possible loss of principal. The investment may fluctuate in value, so that when shares are redeemed they may be worth more or less than when they were purchased.

Russell Fund Distributors, Inc. - Distributor.

Date of first use: September 1997.

For more complete information, including charges and expenses, please call 1-800-227- 4193 for a prospectus. Please read the prospectus carefully before you invest or send money.

An investment in a money market fund is neither insured nor guaranteed by the U.S. Government. There can be no assurance that a money market fund will be able to maintain a stable net asset value of $l.00 per share.

CONTACTS: Sherry Walker, 617/266-5673

or

Traci Hammond, 617/578-1508
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Date:Sep 16, 1997
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