$500M State Pension Software System Wracked by Backlogs

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An expensive and long-troubled software program for California's pension system that went live last year has stumbled out of the gate, with some areas of service dealing with significant and growing backlogs, according to a report released Tuesday by officials at the California Public Employees' Retirement System (CalPERS).

The system, called mylCalPERS, was developed by Accenture and deployed in September after delays and cost increases that reportedly doubled the budget to more than US$500 million.

After six months, the system has been able to "sustain, nearly sustain or make significant improvements" in a number of services, including retirement benefit estimates, direct deposit processing and compensation review, according to the report.

However, large backlogs are affecting payroll-driven retirement adjustments, post-retirement death benefit cases and service credit purchases, it adds.

CalPERS' "normal working inventory" on the first issue is about 7,500 cases, according to a chart included with the report. But since January, that number has steadily risen and this month stood at 17,500, it shows. The backlog will continue growing until August, reaching a projected 30,000 cases, then begin dropping, according to the chart.

In addition, the system's ability to close retirement-adjustment cases will grow from its current pace of 250 per month to 10,000 per month by December, the chart states.

Service credit purchases have a normal working inventory of 5,000 cases but now stand at more than 20,000, according to another chart. The inventory will grow slowly over the course of this year and then fall, but not below the 20,000 mark by December, the chart shows.

Meanwhile, to help cut down the death-benefit case backlog, CalPERS is hiring six additional employees, according to the report.

CalPERS' staff anticipated some backlogs would occur due to "a system transformation of this magnitude," it states.

Many of the backlogged items were built up "during the weeks and months prior to mylCalPERS launch, as areas were unable to process work items due to system conversion activities," it adds.

The CalPERS' system isn't the only California software project in trouble. A system that is supposed to modernize the state's court case management operations was scrapped last month. Officials deemed the system viable but cited a lack of money to continue deploying it.

It remains to be seen how serious the CalPERS' project's woes ultimately become. The agency's report on the system suffers from a lack of detail, according to Michael Krigsman, CEO of consulting firm Asuret and an expert on the reasons IT projects fail.

"The lack of transparency tells me they don't understand the cause, are not sure how to fix it, or it's worse than it actually seems," he said.

An Accenture spokesman didn't immediately respond to a request for comment Tuesday.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com

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