,i #aacth ,,congress #b;d ,session ,h4 ,r4 #ehgg ,,in ,,the ,,house ,,of ,,representatives ,december #aa1 #bjad ,mr4 ,meeks 7for himself and ,ms4 ,waters7 introduced the following bill2 which was referred to the ,committee on ,oversight and ,government ,reform1 and in addition to the ,committee on ,education and the ,workforce1 for a period to be subsequently determined by the ,speaker1 in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned ,a ,,bill ,to amend the ,employee ,retirement ,income ,security ,act of #aigd and title #e1 ,united ,states ,code1 to require plans to establish policies addressing firm-specific risks in asset management services1 greater diversification in investment strategies1 and the inclusion of diverse asset managers and minority brokerage firms1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,american ,pension ,investments ,modernization ,act of #bjad4 #b4 ,consideration of firm-specific risks and inclusion of diverse asset managers in ,,erisa plans 7a7 ,in general ,section #djd7;a7 of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aajd7;a77 is amended-- 7#a7 in paragraph 7#a7-- 7,a7 in subparagraph 7,c71 by striking and at the end2 7,b7 by designating subparagraph 7,d7 as subparagraph 7,e72 and 7,c7 by inserting after subparagraph 7,c7 the following3 7,d7 in any case in which the fiduciary appoints an investment manager or managers to manage any assets of a plan under section #djb7;c77#c71 or business enterprise or enterprises for brokerage and investment banking services1 by establishing policies under which the fiduciary will consider-- 7i7 the concentration level of the plan's exposure to firm-specific risks1 including operational1 compliance1 and fraud risks2 7ii7 the inclusion1 to the greatest extent feasible1 of minority business enterprises for brokerage and investment banking services2 and 7iii7 the utilization of diverse asset managers1 taking into consideration the investment opportunities they offer in sectors1 strategies1 geographies1 and demographics not meaningfully available to the plans4 2 and 7#b7 by inserting at the end the following3 7#c7 7,a7 ,for purposes of this subsection1 the term minority business enterprise means any business entity-- 7i7 not less than #ea percent of which is owned by one or more individuals described in subparagraph 7,c7 or1 in the case of any publicly owned business1 not less than #ea percent of the stock of which is owned by such individuals2 or 7ii7 7,i7 not less than #ce percent of which is owned by one or more individuals described in subparagraph 7,c7 or1 in the case of any publicly owned business1 not less than #ce percent of the stock of which is owned by such individuals2 and 7,,ii7 the management and daily business operations of which are controlled by one or more individuals described in subparagraph 7,c74 7,b7 ,for purposes of this subsection1 the term diverse asset manager means a minority business enterprise that manages an investment portfolio of at least #ajj1jjj1jjj and not more than #be1jjj1jjj1jjj4 7,c7 ,an individual described in this subparagraph is-- 7i7 an ,african-,american1 ,hispanic-,american1 ,asian ,pacific ,american1 ,subcontinent ,asian ,american1 or ,native ,american2 7ii7 a woman2 or 7iii7 a veteran 7as defined in section #aja7b7 of title #ch1 ,united ,states ,code74 4 7b7 ,issuance of guidance by ,secretary of ,labor ,not later than #a year after the date of the enactment of this ,act1 the ,secretary of ,labor shall issue guidance relating to the requirement imposed by section #djd7;a77#a77;,d7 of such ,act 7as amended by subsection 7a774 ,in issuing guidance under this subsection1 the ,secretary of ,labor shall consider successful practices from ,state1 local1 and private-sector retirement systems' utilization of diverse and emerging asset managers and of minority business enterprises for brokerage and investment banking services1 including established efforts1 programs1 plans1 and goals designed to increase their participation in financial services1 and providing pension plans with greater access to investment opportunities that may otherwise be overlooked4 #c4 ,consideration of firm-specific risks and inclusion of diverse asset managers in the ,thrift ,savings ,plan 7a7 ,in general ,section #hdgb of title #e1 ,united ,states ,code1 is amended by adding at the end the following3 7k7 ,in establishing policies under subsection 7f77#a77;,a71 the ,board shall take into account the guidance issued by the ,secretary of ,labor pursuant to section #djd7;a77#a77;,d7 of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aajd7;a774 4 7b7 ,conforming amendment ,section #hdgg7;b77#a77;,c7 of such title is amended by inserting after of this title1 the following3 and consistent with the policies developed under section #hdgb7k714 #d4 ,active management option under the ,thrift ,savings ,plan 7a7 ,in general ,subchapter ,,iii of chapter #hd of title #e1 ,united ,states ,code1 is amended by inserting at the end the following3 #hddj;g4 ,active management option 7a7 ,the ,board shall provide employees and ,members and former employees or ,members the option to participate in actively managed funds within such employee or ,member's ,thrift ,savings ,fund account4 ,such option or options shall allow not more than #bj percent of an employee or ,member's 7or former employee or ,member's7 funds to be actively managed4 7b7 ,notwithstanding the requirement of subsection 7a71 the ,board may not subject more than #bj percent of the total assets under management of the ,thrift ,savings ,fund to active management4 7c7 ,the ,board shall promulgate guidelines regarding the active management of funds under this section4 ,in promulgating such guidelines1 the ,board shall consider modern and successful practices from ,state1 local1 and private-sector retirement systems' utilization of active management strategies in order to-- 7#a7 reduce market downside risks to the best extent possible1 including dramatic swings in major market indexes2 7#b7 take advantage of research and investment opportunities offered by small-1 minority-1 women- and veteran-owned firms that specialize in less traditional asset classes1 or less efficient market segments with high-growth potentials1 including investments in sectors1 strategies1 geographies and demographics that are not meaningfully available to large passively invested funds2 and 7#c7 take advantage of more effective portfolio designs that diversify across active and passive investment strategies and managers4 4 7b7 ,clerical amendment ,the table of sections for such subchapter is amended by adding after the item relating to section #hddj;f the following new item3 #hddj;g4 ,active management option4 4 #e4 ,reports ,not later than #a year after the issuance of guidance under section #b7;b7 and annually thereafter1 the ,secretary of ,labor and the ,chairman of the ,federal ,retirement ,thrift ,investment ,board shall submit a report to ,congress on the progress achieved and efforts being made to implement the amendments made by sections #b and #c1 respectively4 ,such report shall include such recommendations as the ,secretary and the ,chairman1 respectively1 deem necessary or appropriate4 ,in addition1 each report shall include-- 7#a7 an assessment of the extent to which compliance with the requirements contained in such amendments is being achieved2 7#b7 a summary of the enforcement actions taken by each of the agencies assigned administrative enforcement responsibilities for such requirements2 7#c7 to the extent feasible1 with respect to the ,thrift ,savings ,plan and terminated plans within the meaning of title ,,iv of the ,employee ,retirement ,income ,security ,act of #aigd-- 7,a7 a list of all asset management firms 7minority-owned and others7 to which plan funds were allocated1 and the amount allocated to each asset management firm2 7,b7 the fees charged by each asset management firm1 including proceeds from security lending1 if any2 7,c7 the list of all firms 7minority-owned and others7 used for brokerage and investment banking services1 and the amount of transactions executed2 and 7,d7 the fees charged by each firm used for brokerage and investment banking services4 #f4 ,effective date ,the amendments made by sections #b and #c shall apply with respect to plan years beginning at least #i months after the issuance of guidance under section #b7;b74