Reported by Liku Zelleke
The high-profiled members, including Congresswoman Maxine Waters, ranking member of the Financial Services Committee, Senator Elizabeth Warren, Congressman Gregory Meeks and Senator Cory Booker, announced the formation of a working group that was committed to addressing this specific issue at a summit that was held on July 9. Members of the Obama administration, senior investment professionals and trade associations were also present at the half-day summit which was the first of its kind.
Currently, the management of the $439 billion Thrift Savings Plan (TSP) is done by one firm, Black Rock Group. TSP is a defined contribution plan for 4.7 million members who are government employees, retirees and members of the uniformed services.
Congresswoman Waters said, “We will continue this critical dialogue with the formation of a Congressional working group charged with addressing the long-standing barriers to inclusion that for far too long have kept high-performing minority and women-owned asset management firms out of federal retirement plans and endowments.”
Some federal agencies have already started taking measures to diversify the asset management pool. The TSP made an announcement that it supported a measure of its own which would have the potential to allow minority and women-owned firms an opportunity to partake in the management of its funds.
Pension Benefit Guarantee Corporation, another agency, also announced its Small Asset Managers Pilot Program that will address “the barriers to competition.”
A full 34% of the total federal workforce identifies itself as minority, and Senator Booker believes that that figure should be reflected in the asset management pool too.
He said, “The federal government should have professionals managing their pension plans who reflect the diverse makeup of the hardworking employees who faithfully contribute their hard-earned money into the federal retirement system.”