<PAGE>
 
                                                                     EXHIBIT 3.8


                 AMERICAN BAR ASSOCIATION MEMBERS/STATE STREET
                               COLLECTIVE TRUST

                  THIRD AMENDED AND RESTATED FUND DECLARATION

                               INDEX EQUITY FUND

          Pursuant to Sections 3.03 and 7.01 of the Declaration of Trust, dated
December 5, 1991, as amended as of July 31, 1995 and as further amended as of
the date hereof, which authorizes State Street Bank and Trust Company as trustee
("State Street" or the "Trustee") of the American Bar Association Members/State
Street Collective Trust (the "Collective Trust") to amend the Fund Declarations
of the investment funds established under the Collective Trust, effective as of
January 1, 1999 State Street hereby amends and restates the Fund Declaration
dated April 12, 1996 of the Index Equity Fund, an investment fund established
under the Collective Trust (the "Fund").  The provisions of the Declaration of
Trust are incorporated herein by reference.  In addition, the Trustee agrees and
declares that it will hold, administer and deal with all money and property
received or purchased by it as Trustee of the Collective Trust on behalf of the
Fund subject to the additional terms and conditions set forth in this Fund
Declaration.  Capitalized terms used and not otherwise defined shall have the
meanings set forth in the Declaration of Trust.

          1.   Name of Fund.  The name of this investment fund shall be "Index
               ------------                                                   
Equity Fund" (the "Index Fund").

          2.   Investment Objective.  The primary investment objective of the
               --------------------                                          
Index Fund is to replicate the total return of the Russell 3000 Index (the
"Russell Index") by investing in common stocks included in the Russell Index,
with the overall objective of achieving long-term growth of capital.

          3.   Investment Guidelines and Restrictions.  The assets of the Index
               --------------------------------------                          
Fund will be invested and reinvested primarily in common stocks issued by
companies included in the Russell Index through collective investment funds
maintained by the Trustee.  The Index Fund may invest temporarily for defensive
purposes, without limitation, in certain short-term fixed-income securities in
accordance with Section 3.03(c) of the Declaration of Trust.  The Trustee may
also invest in non-equity securities, including investment grade bonds and
debentures and high quality money market instruments (when considered consistent
with the investment objective of the Index Fund).  Such securities may be used
to invest uncommitted cash balances or to 
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maintain liquidity to meet shareholder redemptions. The Index Fund will
concentrate in particular industries to the extent that the Russell Index
concentrates in those industries. The Index Fund will not borrow money, except
as a temporary measure for extraordinary or emergency purposes or to facilitate
redemptions (not for leveraging or investment).

          It is the intention of the Trustee not to cause the Fund to invest in
derivative securities, except to the extent set forth in the Prospectus of the
Collective Trust from time to time in effect pursuant to which the Units of the
Fund may be issued.  The Trustee, subject to consultation with ABRA, may in the
future review such investment policy.

          The Index Fund will not:

          (a)  trade in foreign currency (except transactions incidental to the
               settlement of purchases or sales of securities for the Fund);

          (b)  make an investment in order to exercise control or management
               over a company;

          (c)  make short sales, unless the Index Fund has, by reason of
               ownership of other securities, the right to obtain securities of
               a kind and amount equivalent to the securities sold, which right
               will continue so long as the Index Fund is in a short position;

          (d)  trade in commodities or commodity contracts, except futures
               contracts (including options on futures contracts) with respect
               to securities and securities indices for hedging purposes or
               pursuant to the investment policy regarding derivative securities
               referred to above;

          (e)  write uncovered options;

          (f)  purchase real estate or mortgages, provided that the Index Fund
               may buy shares of real estate investment trusts listed on U.S.
               stock exchanges or reported on Nasdaq National Market if such
               purchases are consistent with the investment objective and
               restrictions set forth in this Fund Declaration;

          (g)  invest in oil, gas or mineral leases;

          (h)  purchase any security on margin or borrow money, except for
               short-term credit necessary for clearance of securities
               transactions; or
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          (i)  make loans, except by (i) the purchase of marketable bonds,
               debentures, commercial paper and similar marketable evidences of
               indebtedness and (ii) engaging in repurchase agreement
               transactions.

          The Trustee intends to operate the Fund as a "qualifying entity"
pursuant to Regulation 4.5 of the Commodity Exchange Act (the "Act").
Therefore, the Fund will limit its positions in commodity futures or option
contracts which do not come within the meaning and intent of section 1.3(z)(1)
of the Act to positions for which the aggregate initial margin and premiums will
not exceed five percent of the net asset value of the Fund.

          4.   Initial Value of Units of the Fund.  The initial value of the
               ----------------------------------                           
Units of the Fund was $10.00 on May 2, 1994.

          5.   Restrictions on Withdrawals and Transfers.  There are no
               -----------------------------------------               
restrictions on withdrawal and transfer.  A Participating Trust may request
withdrawal of any number of Units of the Index Fund on any Business Day.

          6.   Trustee, Management and Administrative Fees.  For services
               -------------------------------------------               
rendered as trustee of the Index Fund, the Trustee will be entitled to receive
compensation in the amount and at the times set forth in Schedule A attached
hereto.

          7.   Conflicts.  In the event of a conflict between the terms of this
               ---------                                                       
document and the Declaration of Trust, the Declaration of Trust shall control
unless the Declaration of Trust specifically permits the Trustee to vary the
particular provision set forth therein.

          IN WITNESS WHEREOF, STATE STREET BANK AND TRUST COMPANY has caused its
name to be signed to this Amended and Restated Fund Declaration for the Index
Fund by its proper officer as of January 1, 1999.



ATTEST:                                      STATE STREET BANK AND TRUST
                                              COMPANY


By: /s/ Gary E. Jenkins                      By: /s/ Nancy P. Antin  
   __________________________                   _______________________________
   Name: Gary E. Jenkins                        Name:  Nancy P. Antin
   Title: Vice President                        Title: Vice President
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                               INDEX EQUITY FUND

                  THIRD AMENDED AND RESTATED FUND DECLARATION

                                  SCHEDULE A


          For services rendered to the Index Fund, the Trustee shall be entitled
to receive with respect to the assets of the Index Fund a fee charged at the
following annual rates, which will accrue on a daily basis and will be paid
monthly, provided that such fee shall be reduced by the amount of any fee
received by the Trustee (which for these purposes shall not exceed the amount
set forth below) on account of the investment of any assets of the Index Fund in
any other collective investment fund maintained by the Trustee:

<TABLE> 
<CAPTION> 
     Aggregate Value of Assets in Aggressive
     Equity, Balanced, Growth Equity, Index Equity,
     Intermediate Bond, International Equity,
     Stable Asset Return and Value Equity Funds                   Rate
     -----------------------------------------------              ----
     <S>                                                          <C> 
     First $1.0 billion                                           .15%
     Next $1.8 billion                                            .058
     Over $2.8 million                                            .025
</TABLE>