Too Narrow to Succeed Act
This bill requires federal institutional investors to report on their use of diverse-owned asset management firms. Additionally, the Department of Labor must conduct a survey of public- and private-sector pension plans regarding best practices for increasing the utilization and capacity of diverse-owned asset management firms.
To improve access for diverse-owned asset management firms, and for 
                            other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Too Narrow to Succeed Act''.

SEC. 2. PURPOSE.

    The purpose of this Act is to improve access for diverse-owned, 
including women- and minority-owned, asset management firms by--
            (1) increasing transparency regarding the asset management 
        firm selection processes of Federal institutional investors;
            (2) identifying common and potential barriers that limit 
        business opportunities for diverse-owned asset management firms 
        and developing strategies to remove these barriers; and
            (3) enabling both public and private retirement funds to 
        adopt broader and more inclusive selection processes to reduce 
        systemic risk and maximize returns, consistent with 
        administrators' fiduciary responsibilities.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Asset management firm.--The term ``asset management 
        firm'' means any investment firm that--
                    (A) manages a portfolio of securities or other 
                assets for a defined benefit plan or other 
                institutional investor; or
                    (B) offers investment options, such as mutual, 
                private equity, real estate, or other commingled funds, 
                to participate in a defined contribution or other 
                comparable retirement plan.
            (2) Diverse-owned.--The term ``diverse-owned'', when used 
        with respect to an asset management firm, means any threshold 
        or other requirements determined appropriate by the Secretary 
        under section 4(a)(3).
            (3) Federal institutional investor.--The term ``Federal 
        institutional investor'' means each of the following:
                    (A) The Federal Retirement Thrift Investment Board.
                    (B) The entity that administers--
                            (i) the funds of the Pension Benefit 
                        Guaranty Corporation established under section 
                        4005 of the Employee Retirement Income Security 
                        Act of 1974 (29 U.S.C. 1305);
                            (ii) the funds of the National Railroad 
                        Retirement Investment Trust established under 
                        section 15(j) of the Railroad Retirement Act of 
                        1974 (45 U.S.C. 231n(j));
                            (iii) the funds of the Federal Reserve 
                        System Retirement Plan;
                            (iv) the funds of the Federal Reserve 
                        System Thrift Plan;
                            (v) the funds of the Tennessee Valley 
                        Authority Retirement System;
                            (vi) the funds of the Tennessee Valley 
                        Authority Retirement System Savings and 
                        Deferral Retirement Plan;
                            (vii) the funds of the Army and Air Force 
                        Exchange Service Retirement System;
                            (viii) the funds of the Navy Exchange 
                        Service Command Retirement Plan; or
                            (ix) the endowment funds of the Smithsonian 
                        Institution.
                    (C) Any other Federal entity that administers a 
                fund--
                            (i) with more than $1,000,000,000 in assets 
                        invested for which the entity uses the services 
                        of, or contracts with, an asset management 
                        firm; and
                            (ii) that the Secretary determines is 
                        similar to the Thrift Savings Fund or a fund 
                        described in subparagraph (B).
            (4) Federal investments.--The term ``Federal investments'' 
        means investments of sums in a fund administered by a Federal 
        institutional investor.
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of Labor.
            (6) Subcontractor asset management firm.--The term 
        ``subcontractor asset management firm'' means an asset 
        management firm that--
                    (A) enters into a contract (including a 
                subcontract) with an asset management firm that is the 
                primary manager of Federal investments, through the use 
                of services or by contract, for a Federal institutional 
                investor; and
                    (B) under the terms of the contract, manages 
                Federal investments of the Federal institutional 
                investor.

SEC. 4. IMPROVING ACCESS FOR DIVERSE-OWNED ASSET MANAGEMENT FIRMS.

    (a) Annual Reports by Federal Institutional Investors That Invest 
in Externally Managed Assets.--
            (1) Annual reports.--
                    (A) Reports required.--By not later than December 
                31, 2022, and annually thereafter, each Federal 
                institutional investor that uses the services of, or 
                contracts with, an asset management firm to manage 
                Federal investments shall prepare and submit a report 
                to the Secretary on the usage of diverse-owned asset 
                management firms by the Federal institutional investor.
                    (B) Inclusion of subcontractor asset management 
                firms.--The report under subparagraph (A) shall also 
                include all subcontractor asset management firms of the 
                Federal institutional investor.
            (2) Content of reports.--Each report described in paragraph 
        (1) shall include, with respect to any fund administered by the 
        Federal institutional investor that uses the services of, or 
        contracts with, an asset management firm--
                    (A) the amounts of assets in such fund that are 
                managed by non-diverse-owned asset management firms and 
                by diverse-owned asset management firms, as determined 
                by the Secretary under paragraph (3), disaggregated by 
                race, ethnicity, and gender;
                    (B) the challenges, if any, the Federal 
                institutional investor faces in reporting on diverse-
                owned and non-diverse-owned asset management firms;
                    (C) the challenges the Federal institutional 
                investor faces in selecting diverse-owned asset 
                management firms (including through subcontractor asset 
                management firms) to manage investments of sums in the 
                fund administered by the Federal institutional 
                investor;
                    (D) the actions taken during the reporting period, 
                or planned to be taken, by the Federal institutional 
                investor to alleviate barriers that limit participation 
                of diverse-owned asset management firms; and
                    (E) the actions taken during the reporting period, 
                or planned to be taken, by the Federal institutional 
                investor to increase opportunities for diverse-owned 
                asset management firms to compete for contracts.
            (3) Diverse-owned.--The Secretary shall evaluate industry 
        benchmarks to determine the threshold or other requirements 
        necessary for an asset management firm to qualify as diverse-
        owned.
            (4) Public availability.--The Secretary shall make each 
        report submitted under paragraph (1) publicly available.
    (b) Sense of Congress Relating to Diverse-Owned Asset Management 
Firms and Covered Private Sector Plans.--It is the sense of Congress 
that the Advisory Council on Employee Welfare and Pension Benefit Plans 
(commonly known as the ``ERISA Advisory Council'') routinely consider 
barriers to the usage of diverse-owned asset management firms among 
covered private sector plans, and methods to overcome such barriers.
    (c) Survey of Fund Management Best Practices.--
            (1) In general.--The Secretary shall--
                    (A) conduct a survey of the best practices in fund 
                asset management with respect to increasing the 
                utilization and capacity of diverse-owned asset 
                management firms; and
                    (B) prepare and submit a report to Congress not 
                less often than every 3 years, or more frequently as 
                the Secretary considers to be appropriate.
            (2) Requirements of survey.--The Secretary shall survey a 
        sample of public and private-sector pension plans subject to 
        the Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1001 et seq.) and other retirement funds that are engaged in 
        (or looking to engage in) strategies to improve access to, and 
        representation by, diverse-owned asset management firms.
            (3) Report.--The Secretary shall make publicly available a 
        report to Congress on the best practices of pension funds and 
        other retirement funds with respect to implementing strategies 
        to improve access to diverse-owned asset management firms. The 
        report shall include--
                    (A) the challenges pension funds and other 
                retirement funds may face in adopting or executing 
                strategies to engage more with diverse-owned asset 
                management firms as the primary institutional fund 
                manager or as subcontractor asset management firms, 
                including women- and minority-owned asset management 
                firms; and
                    (B) an identification of the strategies adopted to 
                implement programs.
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Too Narrow to Succeed Act
To improve access for diverse-owned asset management firms, and for other purposes.
Too Narrow to Succeed Act
Rep. Beatty, Joyce