Sens. Booker, Warren Lead Letter to Railroad Retirement Trust Urging Them to Prioritize Diversity When Selecting Asset Mangers

Information would build upon ongoing work to increase the utilization of diverse asset managers by federal pension plans
“On the state level, a number of pension funds have long established programs to encourage smaller and diverse asset manager participation…”
A great opportunity “to set a clear example for institutional investors.”

WASHINGTON, DC – Today, U.S. Sens. Cory Booker (D-NJ) and Elizabeth Warren (D-MA), sent a letter to William J. Carr III, interim CEO of the National Railroad Retirement Investment Trust (NRRIT) asking the Trust to clarify details around the current process of how it identifies and selects external managers to handle the assets of federal employees. They were joined on the letter by Sens. Kirsten Gillibrand (D-NY), Ben Cardin (D-MD), Bernie Sanders (D-VT), Sherrod Brown (D-OH), Richard Blumenthal (D-CT), Mazie Hirono (D-HI), and Robert Menendez (D-NJ).

“Our economy and nation thrives when we develop inclusive political and economic institutions. Therefore, it is in our national best interest to share in a common goal of ensuring government better represent the diversity of our nation,” the Senators stated.

“We believe there is a great opportunity for your plan to set a clear example for institutional investors and the PBGC’s initiative could be a model for increasing investment with diverse managers across all asset classes… Accordingly, we request that you submit a plan that outlines how the NRRIT could similarly create a program for smaller and diverse asset managers,” the Senators concluded.

In July 2014, Senator Booker led his colleagues in raising “the severe underrepresentation of diverse and emerging managers” at the Pension Benefit Guaranty Corporation (PBGC), after learning that the PBGC had allocated $0 of its over $85 billion in assets to diverse managers. In May of 2015, the PBGC launched a pilot program for smaller asset managers and earlier this year, the agency allocated $875 million to five investment managers selected for the pilot.

The full text of the letter is below and can be found here.