National Association of Securities Professionals (NASP) Applauds Subcommitee Efforts...

National Association of Securities Professionals (NASP) Applauds Subcommitee Efforts to Examine Diversity in Nation's Largest Thrift Savings Plan

-- NASP Seeks to Advance Role of Minority and Women Owned Firms in
the Financial Services Industry and Management of the Federal
Retirement Thrift --
WASHINGTON--(Business Wire)--
In an on-going effort to review and improve diversity practices in
the financial services industry, the Subcommittee on Federal
Workforce, Postal Service and the District of Columbia, chaired by
Congressman Danny Davis (D-IL), held a hearing this past Thursday
entitled "Investing in the Future: Minority Opportunities and the
Thrift Savings Plan (TSP)." Mark Willis, Board Chairman of NASP
stated, "One of NASP's founding objectives and principles is achieving
equal opportunity and participation for minorities and women in the
securities industry. We are understandably pleased and encouraged by
the Subcommittees' efforts to have a dialogue on the practices of the
TSP, as the hearing represents an important step if there is to be
change and improvement."

The hearings examined the Federal Retirement Thrift Savings Plan
(TSP) and sought to improve minority access in its management. As the
largest retirement savings and investment plan for federal employees,
TSP is also the largest defined contribution plan in the world with
over 3.9 million participants and more than $226 billion in assets as
of June 30, 2008.

The TSP has only one manager for all of its assets, Barclays
Global Investors, a U.S. subsidiary of a foreign bank that has managed
the assets of the thrift exclusively for over 20 years. The
demographic makeup of the TSP plan participants, however, is decidedly
diverse, with nearly 50 percent of the annuitants being minorities
and/or women. No minority or women owned firms have managed the assets
or executed brokerage services for the TSP in its history.

During the hearing, Thurman White, President and CEO of Progress
Investment Management Company, LLC stated that the unilateral
management of the TSP is unprecedented in the plan sponsor community
of the United States and cause for concern. "Having such a large pool
of assets managed by a single manager is very risky. Such single
manager concentration runs contrary to prudent investment policy that
typically looks to asset class as well as manager diversification as
an efficient means to diversify risk and enhance returns in today's
volatile market." He further provided some examples of U.S. pension
plans that have utilized targeted emerging manager investment
strategies to enhance overall investment returns, diversify their
portfolios and reduce manager concentration risk. These examples
included CalPERS, CalSTRS, Boeing, GE Asset Management, Illinois
Municipal Retirement Fund, LACERS, LACERA, New York State Common
Retirement Fund, Shell Oil, Teacher Retirement System of Texas and
Verizon Communications. "That the Federal Retirement Thrift Savings
Plan is not listed among these plans is shameful, and frankly
puzzling," he said.

Jarvis Hollingsworth, Former Chairman of The Teacher Retirement
System of Texas discussed the evolution of his plan from one that was
mostly passively and internally managed to its present configuration
that includes active management utilizing several asset classes
including alternatives. "This reallocation moved the fund away from
the traditional model of being highly weighted in publicly traded
stocks and bonds and allowed the fund to guard against downturns in
certain markets and better capitalize on the strong returns of less
traditional asset classes." He further stated, "Diversity of
investment professionals is also important and is very complimentary
to the risk/return goals of TRS. TRS is committed to increasing the
number and size of its relationships with minority and women-owned
firms having the qualifications to assist in fulfilling the TRS
mission, in accordance with TRS' fiduciary responsibilities to plan
participants."

"Historic in its importance, Thursday's hearing is the latest in a
series of hearings concerning the lack of diversity in the financial
services industry and the first to evaluate the Thrift Savings Plan
diversity practices," said Donna Sims Wilson, NASP Legislative
Committee Chair. NASP's members testified before the Subcommittee on
Oversight and Investigation of the House Financial Services Committee
in 2006 and again in 2008 discussing both ways to improve workforce
diversity as well as challenging the federal government as
"uber-client" of our industry to lead by example by being diverse with
its own resources.

Mellody Hobson, President of Ariel Investments, LLC said, "I
applaud Congressman Davis' leadership on this vital issue. Government
employees deserve greater choice when it comes to their retirement
security. This hearing is an important first step in improving the
Thrift's model."

Industry experts who testified at the Subcommittee hearing
included: Greg Long, Executive Director, Federal Retirement Thrift
Investment Board; Michael Sobel, Managing Director and Head of U.S.
Equity Trading, Barclays Global Investors; Edward Swan, Jr., Former
President, Fiduciary Investment Solutions Group; Jarvis Hollingsworth,
Partner, Bracewell & Giuliani, LLP and Former Chairman of the Teacher
Retirement System of Texas; Thurman White, Chief Executive Officer,
Progress Investment Management Company, LLC; Mellody Hobson,
President, Ariel Investments, LLC.; and Jesse Brown, President,
Krystal Investments.

About NASP

The National Association of Securities Professionals (NASP) is a
non-profit trade association consisting of professionals in the
securities industry. NASP brings together the nation's minorities and
women who have achieved recognition in the industry as brokers, asset
managers, public finance consultants, investment bankers, bond counsel
commercial bank underwriters, investors, plan sponsors and other
finance professionals. Founded in 1985, NASP is based in Washington,
D.C. with 10 chapters in major financial centers throughout the United
States.

National Assoc. of Securities Professionals
Lucius Ashby, 202-371-5535
Executive Director
http://www.nasphq.org

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