Having grown weary of the "gentle-prodding" approach to encouraging the state's public pension plans to hire minority- and women-owned investment firms, Illinois State Senator Emil Jones has made hard-hitting recommendations that may be more convincing. With the support of the Illinois Minority Caucus, Jones is crafting formal legislation that will ensure that these firms manage a fair share of the more than $26 billion in retirement fund assets under state supervision.
"I've been nudging [the state's pension plans] for two years on this, and they've been operating at a snail's pace when it comes to bringing in emerging firms," complains Jones. "They may not want it but in my opinion, for this to work, we must have legislation."
Jones says that only one-half of 1% of Illinois' pension assets are managed by emerging firms (a generic term for women- and minority-owned firms). He points to a 1988 California bill, AB 1933, which requires 15% of all state contracts to go to minority firms and 5% to women-owned firms, as the type of law he would like to see on Illinois' books.
Assemblywoman Maxine Waters (who has since become a Congresswoman) seized the new legislation, and in 1989, moved the California legislature's Joint Committee on Public Pension Fund Investments to call hearings on the state's pension plans' budgetary requests. As a result of the hearings, the funds were forced to comply with AB 1933. California's two largest public pension funds, which administer some $110 billion, now have 10 emerging managers on their rosters responsible for managing $628 million.