II 

117TH CONGRESS 

2D SESSION S. 4097 

To improve access for diverse-owned asset management firms, and for other 

purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 27, 2022 

Mr. KAINE (for himself, Mr. BOOKER, Mrs. MURRAY, Mr. MENENDEZ, and 

Mr. WARNER) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions 

A BILL 

To improve access for diverse-owned asset management 

firms, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Too Narrow to Succeed 

5 Act’’. 

6 SEC. 2. PURPOSE. 

7 The purpose of this Act is to improve access for di8 verse-owned, including women- and minority-owned, asset 

9 management firms by— 


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1 (1) increasing transparency regarding the asset 

2 management firm selection processes of Federal in3 stitutional investors; 

4 (2) identifying common and potential barriers 

5 that limit business opportunities for diverse-owned 

6 asset management firms and developing strategies to 

7 remove these barriers; and 

8 (3) enabling both public and private retirement 

9 funds to adopt broader and more inclusive selection 

10 processes to reduce systemic risk and maximize re11 turns, consistent with administrators’ fiduciary re12 sponsibilities. 

13 SEC. 3. DEFINITIONS. 

14 In this Act: 

15 (1) ASSET MANAGEMENT FIRM.—The term 

16 ‘‘asset management firm’’ means any investment 

17 firm that— 

18 (A) manages a portfolio of securities or 

19 other assets for a defined benefit plan or other 

20 institutional investor; or 

21 (B) offers investment options, such as mu22 tual, private equity, real estate, or other com23 mingled funds, to participate in a defined con24 tribution or other comparable retirement plan. 


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1 (2) DIVERSE-OWNED.—The term ‘‘diverse2 owned’’, when used with respect to an asset manage3 ment firm, means any threshold or other require4 ments determined appropriate by the Secretary 

5 under section 4(a)(3). 

6 (3) FEDERAL INSTITUTIONAL INVESTOR.—The 

7 term ‘‘Federal institutional investor’’ means each of 

8 the following: 

9 (A) The Federal Retirement Thrift Invest10 ment Board. 

11 (B) The entity that administers— 

12 (i) the funds of the Pension Benefit 

13 Guaranty Corporation established under 

14 section 4005 of the Employee Retirement 

15 Income Security Act of 1974 (29 U.S.C. 

16 1305); 

17 (ii) the funds of the National Railroad 

18 Retirement Investment Trust established 

19 under section 15(j) of the Railroad Retire20 ment Act of 1974 (45 U.S.C. 231n(j)); 

21 (iii) the funds of the Federal Reserve 

22 System Retirement Plan; 

23 (iv) the funds of the Federal Reserve 

24 System Thrift Plan; 


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1 (v) the funds of the Tennessee Valley 

2 Authority Retirement System; 

3 (vi) the funds of the Tennessee Valley 

4 Authority Retirement System Savings and 

5 Deferral Retirement Plan; 

6 (vii) the funds of the Army and Air 

7 Force Exchange Service Retirement Sys8 tem; 

9 (viii) the funds of the Navy Exchange 

10 Service Command Retirement Plan; or 

11 (ix) the endowment funds of the 

12 Smithsonian Institution. 

13 (C) Any other Federal entity that admin14 isters a fund— 

15 (i) with more than $1,000,000,000 in 

16 assets invested for which the entity uses 

17 the services of, or contracts with, an asset 

18 management firm; and 

19 (ii) that the Secretary determines is 

20 similar to the Thrift Savings Fund or a 

21 fund described in subparagraph (B). 

22 (4) FEDERAL INVESTMENTS.—The term ‘‘Fed23 eral investments’’ means investments of sums in a 

24 fund administered by a Federal institutional inves25 tor. 


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1 (5) SECRETARY.—The term ‘‘Secretary’’ means 

2 the Secretary of Labor. 

3 (6) SUBCONTRACTOR ASSET MANAGEMENT

4 FIRM.—The term ‘‘subcontractor asset management 

5 firm’’ means an asset management firm that— 

6 (A) enters into a contract (including a sub7 contract) with an asset management firm that 

8 is the primary manager of Federal investments, 

9 through the use of services or by contract, for 

10 a Federal institutional investor; and 

11 (B) under the terms of the contract, man12 ages Federal investments of the Federal institu13 tional investor. 

14 SEC. 4. IMPROVING ACCESS FOR DIVERSE-OWNED ASSET 

15 MANAGEMENT FIRMS. 

16 (a) ANNUAL REPORTS BY FEDERAL INSTITUTIONAL

17 INVESTORS THAT INVEST IN EXTERNALLY MANAGED AS18 SETS.— 

19 (1) ANNUAL REPORTS.— 

20 (A) REPORTS REQUIRED.—By not later 

21 than December 31, 2022, and annually there22 after, each Federal institutional investor that 

23 uses the services of, or contracts with, an asset 

24 management firm to manage Federal invest25 ments shall prepare and submit a report to the 


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1 Secretary on the usage of diverse-owned asset 

2 management firms by the Federal institutional 

3 investor. 

4 (B) INCLUSION OF SUBCONTRACTOR ASSET

5 MANAGEMENT FIRMS.—The report under sub6 paragraph (A) shall also include all subcon7 tractor asset management firms of the Federal 

8 institutional investor. 

9 (2) CONTENT OF REPORTS.—Each report de10 scribed in paragraph (1) shall include, with respect 

11 to any fund administered by the Federal institu12 tional investor that uses the services of, or contracts 

13 with, an asset management firm— 

14 (A) the amounts of assets in such fund 

15 that are managed by non-diverse-owned asset 

16 management firms and by diverse-owned asset 

17 management firms, as determined by the Sec18 retary under paragraph (3), disaggregated by 

19 race, ethnicity, and gender; 

20 (B) the challenges, if any, the Federal in21 stitutional investor faces in reporting on di22 verse-owned and non-diverse-owned asset man23 agement firms; 

24 (C) the challenges the Federal institutional 

25 investor faces in selecting diverse-owned asset 


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1 management firms (including through subcon2 tractor asset management firms) to manage in3 vestments of sums in the fund administered by 

4 the Federal institutional investor; 

5 (D) the actions taken during the reporting 

6 period, or planned to be taken, by the Federal 

7 institutional investor to alleviate barriers that 

8 limit participation of diverse-owned asset man9 agement firms; and 

10 (E) the actions taken during the reporting 

11 period, or planned to be taken, by the Federal 

12 institutional investor to increase opportunities 

13 for diverse-owned asset management firms to 

14 compete for contracts. 

15 (3) DIVERSE-OWNED.—The Secretary shall 

16 evaluate industry benchmarks to determine the 

17 threshold or other requirements necessary for an 

18 asset management firm to qualify as diverse-owned. 

19 (4) PUBLIC AVAILABILITY.—The Secretary 

20 shall make each report submitted under paragraph 

21 (1) publicly available. 

22 (b) SENSE OF CONGRESS RELATING TO DIVERSE23 OWNED ASSET MANAGEMENT FIRMS AND COVERED PRI24 VATE SECTOR PLANS.—It is the sense of Congress that 

25 the Advisory Council on Employee Welfare and Pension 


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1 Benefit Plans (commonly known as the ‘‘ERISA Advisory 

2 Council’’) routinely consider barriers to the usage of di3 verse-owned asset management firms among covered pri4 vate sector plans, and methods to overcome such barriers. 

5 (c) SURVEY OF FUND MANAGEMENT BEST PRAC6 TICES.— 

7 (1) IN GENERAL.—The Secretary shall— 

8 (A) conduct a survey of the best practices 

9 in fund asset management with respect to in10 creasing the utilization and capacity of diverse11 owned asset management firms; and 

12 (B) prepare and submit a report to Con13 gress not less often than every 3 years, or more 

14 frequently as the Secretary considers to be ap15 propriate. 

16 (2) REQUIREMENTS OF SURVEY.—The Sec17 retary shall survey a sample of public and private18 sector pension plans subject to the Employee Retire19 ment Income Security Act of 1974 (29 U.S.C. 1001 

20 et seq.) and other retirement funds that are engaged 

21 in (or looking to engage in) strategies to improve ac22 cess to, and representation by, diverse-owned asset 

23 management firms. 

24 (3) REPORT.—The Secretary shall make pub25 licly available a report to Congress on the best pracVerDate Sep 11 2014 15:53 Apr 28, 2022 Jkt 029200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S4097.IS S4097

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1 tices of pension funds and other retirement funds 

2 with respect to implementing strategies to improve 

3 access to diverse-owned asset management firms. 

4 The report shall include— 

5 (A) the challenges pension funds and other 

6 retirement funds may face in adopting or exe7 cuting strategies to engage more with diverse8 owned asset management firms as the primary 

9 institutional fund manager or as subcontractor 

10 asset management firms, including women- and 

11 minority-owned asset management firms; and 

12 (B) an identification of the strategies 

13 adopted to implement programs. 

Æ 


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