Jan-2026: Update on the Legacy Replacement Project (LRP) Fiasco - Has the Project Been Cancelled?

NYCERS just sent me a copy of the FY-2025 Schedule of Paymemts to Consultants which appears to be a missing page from the ACFR report for FY-2025.

Significantly, Accenture was not on the list for payment.

The ommission of Accenture, who has the LRP contract, means that NYCERS did not pay Accenture anything for the entire year (July 2024 to June 2025). Accenture was paid $17.0 million in FY-2024. This, then, raises the question whether Accenture is still working on the contract, is there a dispute about the work, or is the contract dead.

As of December 2025 there is no reported resolution to the problems with the LRP project and there is still no clear description of the problems with contract and project.

As reference, this is what NYCERS said in the FY-2024 financial report (see full quotes below):

In parallel to a Phase 2.0 delivery, the Systems Integrator and NYCERS are working on a re-baseline plan for the remaining phases, which will be discussed during the February 2025 Board of Trustees Meeting.

And this what NYCERS said in the FY-2025 financial report:

NYCERS and the systems integrator are actively collaborating on a comprehensive re-baseline plan to complete the project , with an updated schedule and projrct details to be presented to the NYCERS Board of Trustees by April 2026.

It is time for the trustees to publicly state what has happened to the LRP project. Is there a DOI investigation? The new executive director has been directly responsible for the LRP project since its inception in 2016. Is there any accountability?

Seemingly in reaction to the stop payment to Accenture, NYCERS increased payment to Gartner from $2.0 million to $3.9 million for technical advice. In addition, the cost for "software, licences, and support" increased from $10.8 million to $16.0 million.

The Accenture Contract

In the Febraury, 2021, NYCERS awarded the LRP contract to Accenture at a cost of $85 million for 5 years. That is roughly an annual charge of $17 million. Work started in June 2021 and was scheduled to finish in September 2026. Best guess now for a completion date is the end of 2030.

Based on the updated ACFR data NYCERS has paid Accenture fot the LRP contract:

FY-2025	$0
FY-2024	$17.9 million
FY-2023	$817,492
FY-2022	$9.8 million
FY-2021	$926,341

Quotes from NYCERS FY-2024 and FY-2025 Financial Statements

You can see from the official comments from NYCERS concerning the LRP project that there is no mention of the fact that payemnts have been stopped to Accenture.

2024

The Legacy Replacement Project (LRP) is a complex, multi-year initiative to modernize NYCERS’ business processes and related technologies. The principal objective of the LRP is to replace NYCERS’ legacy production application with a new pension administration system. This new pension administration system will transform the way NYCERS does business and interacts with its members, retirees, employers, and other City agencies. This will be accomplished using flexible up-to-date technologies that will provide ongoing value into the future.

LRP began in June 2021, with a plan to complete the transformation over five years/five phases, with a target completion of September 2026.

Phase 1 was launched in January 2023, introducing foundational functionality that future phases will build upon.

In the midst of Phase 2 delivery, a range of legacy system changes surfaced that impacted the overall timeline. The Systems Integrator proposed to deliver a subset of Phase 2, called Phase 2.0, as this functionality did not rely on those legacy system changes, and we are currently on track for a January 2025 launch.

In parallel to a Phase 2.0 delivery, the Systems Integrator and NYCERS are working on a re-baseline plan for the remaining phases, which will be discussed during the February 2025 Board of Trustees Meeting.

2025

The Legacy Replacement Project (LRP) is NYCERS' multi-year transformation initiative to modernize NYCERS’ core business processes and replace NYCERS' existing legacy pension administration system with a secure, adaptable, and future ready technology platform. This modernization will significantly enhance how NYCERS conducts business and delivers services to members, retirees, employers, and partner City agencies.

Initiated in June 2021 as a five-phase program targeted for completion in September 2026, the project continues to advance.

Phase 1 successfully was launched in January 2023, establishing critical foundational capabilities for future phases.

During Phase 2 development, legacy system dependencies were identified that required timeline adjustments.

In response, the systems integrator and NYCERS delivered a subset of functionality referred to as Phase 2.0 in January 2025, allowing progress to continue, while collaborating on a schedule for the remaining functionality continued.

NYCERS and the systems integrator are actively collaborating on a comprehensive re-baseline plan to complete the project , with an updated schedule and projrct details to be presented to the NYCERS Board of Trustees by April 2026.

How NYCERS Spent Its LRP Money in FY-2025

Considering the massive hang up surrounding the Legacy Replacement Project (LRP), we should take a careful look at what NYCERS is spending on administrative operations. They were $129 million in FY-2025.

God forbid we look at the investment expenses, $634 million in FY-2025.

A year ago at the December 2024 Board meeting, the executive director reported that because of delays in the LRP project, the payments for the project were $24 million lower than budgeted. The executive director retired in May 2025.

It then became clear from the NYCERS FY-2024 Annual Comprehensive Finacial Report (ACFR, released at the end of December) that at some time in FY-2024, the Accenture LRP contract hit a major obstacle and that a solution would be presented to the Board at the February 2025 Board meeting.

At the Febuary 2025 Board meeting NYCERS staff was supposed to present a new strategy with corrective details. What they presented was a four year delay with a promise to present the operational details in June 2025. As of December 2025, there are no details.

This year at the December 2025 Board meeting, the interim executive director, the mastermind of the LRP fiasco, reported that because of a pause in the LRP project, admin expenses for FY-2025 came in at $39.7 million under the amount budgeted for FY-2025 ($128M instead of $168M). Wasn't that the message last year? Of course, no questions from the trustees about the $39.7 million.

The Accenture Contract

In the Febraury, 2021, NYCERS awarded the LRP contract to Accenture at a cost of $85 million for 5 years. That is roughly an annual charge of $17 million. Work started in June 2021 and was scheduled to finish in September 2026. Best guess now for a completion date is the end of 2030.

Based on the ACFR reports NYCERS has paid Accenture:

FY-2025	$0 but not reported in the ACFR
FY-2024	$17.9 million
FY-2023	$817,492
FY-2022	$9.8 million
FY-2021	$926,341

We can see possible probelms even as early as FY-2023 and a total collapse in FY-2025.

From the chart below we can see consulting costs going from $11 million in FY-2020 to $31 million in FY-2025. Because of the holdup with LRP this amount dropped from $42 million in FY-2024 to $31 million this year but there still is a lot money being paid to someone. NYCERS failed to report contracts for FY-2025.

In addition, software costs have climbed to $23 million in FY-2025 from $13 million in FY-2020. There is no pause in spending here. There is also no public reporting of the details of these costs.

Runaway Payroll Costs

In the midst of this chaos, payroll costs have gone from $46 million in FY-2020 to $66 million in FY-2025. That is 44% increase over five years.

There was a serious service problem with processing retirement application which NYCERS staff has supposedly gotten under control. In FY-2024 the trustees expanded personnel resources to solve this problem. In the FY-2026 budget, the trustees have continued to hold the full-time head count at 501 but have increased personnel costd from $70.2 million to $73.6 million, an almost 5% increase.

History of Admin Expenses

The chart below is a breakdown of all NYCERS administrative expenses from 2017 to 2025. The information comes from NYCERS Annual Comprehensive Financial Report ACFR).

NYCERS Admin Expenses

Fiscal Year	Budgeted F/T Head Count	Personnel Expenses	Contracts & Consultants	Phone, Mail, & Printing	Rentals	Software, Hardware, Support, Supplies, & Maintenance	Total
FY-2025	501	$66,035,631	$31,321,363	$1,145,708	$7,247,706	$23,133,146	$128,883,554
FY-2024	501	$60,156,204	$42,434,468	$1,236,809	$9,257,263	$17,189,819	$130,274,563
FY-2023	485	$57,736,915	$19,910,959	$1,037,015	$9,282,322	$17,825,949	$105,793,160
FY-2022	483	$52,303,943	$27,418,528	$1,029,424	$9,329,701	$14,906,397	$104,987,993
FY-2021	474	$48,693,043	$14,058,975	$1,290,546	$6,617,040	$16,753,334	$87,412,938
FY-2020	438	$45,736,806	$11,337,750	$1,173,896	$6,870,614	$12,548,240	$77,667,306
FY-2019	428	$43,717,712	$15,884,418	$1,114,263	$6,637,059	$14,719,873	$82,073,325
FY-2018	415	$40,444,145	$4,310,427	$1,072,077	$6,348,888	$7,513,233	$59,688,770
FY-2017	401	$39,505,894	$3,829,758	$1,561,282	$5,909,352	$8,864,342	$59,670,628

Dec-2025 Update on the Legacy Replacement Project Fiasco - The Trustees have a Fiduciary Responsibility to Investigate

As of the NYCERS Board of Trustees meeting on December 11, 2025, the acting executive director again has no update on the Legacy Replacement Project.

"The project is in red status - there no fix to the scope and schedule of the $84 million contract - no questions asked"

It is now one year since this the project has stalled.

The New Executive Director???

In the midst of this chaos, the trustees chose to appoint Liz Reyes, the mastemind of the LRP fiasco, as the new executive director of NYCERS. I wonder if the new mayor is aware of this lunacy?

I have good reason to suspect that the trustees are very aware of the LRP mess, especially because that there have been no questions on the record about this issue and a shut down from the chair when a stray question was asked.

Then why did the trustees appoint Reyes as the new executive director? It maybe that they couldn't get anyone else to take on the problems. You can just image what a new person would have to do to straighten out the LRP mess. Who on staff could he/she trust? Who would he/she have to fire? Are any trustees implicated?

NYCERS FY-2025 Financial Statement

On a related item, NYCERS just released its FY-2025 financial report. You can see from the two quotes below (FY-2024 and FY-2025) the PR spin NYCERS is putting on this mess. I get the creppy feeling that they were AI generated.

2024

The Legacy Replacement Project (LRP) is a complex, multi-year initiative to modernize NYCERS’ business processes and related technologies. The principal objective of the LRP is to replace NYCERS’ legacy production application with a new pension administration system. This new pension administration system will transform the way NYCERS does business and interacts with its members, retirees, employers, and other City agencies. This will be accomplished using flexible up-to-date technologies that will provide ongoing value into the future.

LRP began in June 2021, with a plan to complete the transformation over five years/five phases, with a target completion of September 2026.

Phase 1 was launched in January 2023, introducing foundational functionality that future phases will build upon.

In the midst of Phase 2 delivery, a range of legacy system changes surfaced that impacted the overall timeline. The Systems Integrator proposed to deliver a subset of Phase 2, called Phase 2.0, as this functionality did not rely on those legacy system changes, and we are currently on track for a January 2025 launch.

In parallel to a Phase 2.0 delivery, the Systems Integrator and NYCERS are working on a re-baseline plan for the remaining phases, which will be discussed during the February 2025 Board of Trustees Meeting.

2025

The Legacy Replacement Project (LRP) is NYCERS' multi-year transformation initiative to modernize NYCERS’ core business processes and replace NYCERS' existing legacy pension administration system with a secure, adaptable, and future ready technology platform. This modernization will significantly enhance how NYCERS conducts business and delivers services to members, retirees, employers, and partner City agencies.

Initiated in June 2021 as a five-phase program targeted for completion in September 2026, the project continues to advance.

Phase 1 successfully was launched in January 2023, establishing critical foundational capabilities for future phases.

During Phase 2 development, legacy system dependencies were identified that required timeline adjustments.

In response, the systems integrator and NYCERS delivered a subset of functionality referred to as Phase 2.0 in January 2025, allowing progress to continue, while collaborating on a schedule for the remaining functionality continued.

NYCERS and the systems integrator are actively collaborating on a comprehensive re-baseline plan to complete the project , with an updated schedule and projrct details to be presented to the NYCERS Board of Trustees by April 2026.

Hiding Data

There was a strange omission in this year's report. In particular a schedule of payments to consultants was missing from the report. This schedule has been in the annual reports since 1986, the first year that the NYCERS report was published.

I suspect that NYCERS became aware that I was able to track the runaway spending through this schedule.

Below is an image of the schedule from FY-2024. You can click on the image and then open it another tab to get a bigger display of the image.

Last year's (2024) total cost for consulatnts was $40.4 million. This year's (2025) total is $29.0 million. This refelects the hold on the LRP contract.

The cost, however, for "software, licences, and support" has increased from $10.8 million to $16.0 million from 2024 to 2025.

Legacy Replacement Project - Still Adrift

As of the NYCERS Board of Trustees meeting on October 9, 2025, the acting executive director still has no update on the Legacy Replacement Project (LRP) that is four years behind schedule.

Update: As of the NYCERS Board of Trustees meeting on November 13, 2025, the acting executive director again has no update on the Legacy Replacement Project.

On a connected topic, the Trustees still have not appointed a new executive director to replace the former director who retired in May. The agency has also suspended filling a large number of open management positions.

With the election of a new mayor and comptroller, let us hope that the trustees will clean house and appoint a competent person to straighten out the agency.

Mamdani: Where to Find the Money - Alternative Investments - Check with Lina Khan

Total City Expenses over the Last Ten Years

The City spent in total

1. $71.522 billion in 2015
2. $120.125 billion in 2025

That is a 68% increase over 10 years.

Investemt Expenses for the Five City Pension Systems

The City's five pension systems investment expenses were

1. $0.709 billion in FY-2015 with $178.389 billion in assets
2. $2.306 billion in FY-2025 with $325.419 billion in assets

That is a 225.7% increase in expenses with a 83% increase in assets over ten years.

Something is wrong.

I could run that portfolio with my eyes closed at 20 basis points per year and make more money.
FYI - 20 basis points on $325B is $650 million.

A real expert could do it for 10 basis points and make even more money.

Administrative Expenses for the Five City Pension Systems

Over the last ten years the administrative costs for the five systems increased from $170.7 million (2015) to $312.7 million (2025).

That is a 76.3% increase over 10 years. (The Fire Fund didn't start its budget until 2018 at $6.4 million)

Why is the pension systems better funded than the City?

By the Numbers - Income Inequality in the United States

The 2022 data in the two tables below come from the IRS - Publication 1304 Basic Table Part 1 . The IRS has not published any more current data beyond 2022. The oldest data available in Publication 1304 is for the 1996 tax year. Years from 1954 to 1999 can be found at this IRS site.

The data in a very real way speaks for itself.

The following facts come from the tax summaries for 1960, 1996, and 2022(Adjusted Gross Income = AGI):

• In 1960, the bottom 52.1% earned 22.3% of the total national AGI, while the top 1.5% earned 10.6%
• In 1996, the bottom 52.4% earned 16.0% of the total national AGI, while the top 1.3% earned 17.8%
• In 2022, the bottom 52.0% earned 12.8% of the total national AGI, while the top 1.5% earned 25.9%

In 2022, the bottom 52.04% had an average income of $28,587, while the top 1.53% had an average income of $1,552,150.

This is what uncontrolled capitalism looks like. No wonder so many Americans are angry

Tax Impact

The driving force behind this concentration of income is the tax policy that allows the very rich to pay very little in taxes. Trump is a classic example of the this tax avoidance policy.

Below is a sanp shot of the effect of the 2022 results of the current tax policy that was reconfirmed this summer.
In the second chart below, from 2022, you can see the following numbers.

• the person earning $28,587 is paying 9.96% in income tax
• the person earning $288,616 is paying 18.81% in income tax
• the person earning $6,846,585 is paying 22.29% in iincome tax

Who considers this a fair tax policy???

Note: This doesn't reflect the impact of payroll taxes on lower income taxpayers.

The Breakdown of Adjusted Gross Income for 2022

Tax Year 2022	Tax Filings	% of Filings	AGI Income	% of Total AGI	Avg. Individual AGI
	(in thousands)		(in millions)
National Total	161,337		$14,883,957
AGI Ranges
No AGI	3,254	2.02%	$(164,160)	-1.10%
0 - 5,000	8,196	5.08%	$19,539	0.13%	$2,384
5,000-10,000	8,748	5.42%	$66,071	0.44%	$7,553
10,000-50,000	63,768	39.52%	$1,822,956	12.25%	$28,587
50,000 - 75,000	23,806	14.76%	$1,466,486	9.85%	$61,602
75,000 - 100,000	15,181	9.41%	$1,315,620	8.84%	$86,662
100,000 - 200,000	25,997	16.11%	$3,567,048	23.97%	$137,210
200,000 - 500,000	10,017	6.21%	$2,891,065	19.42%	$288,616
500,000 - 1,000,000	1,675	1.04%	$1,124,299	7.55%	$671,223
1,000,000 - 1,500,000	361	0.22%	$435,178	2.92%	$1,205,479
1,500,000 - 2,000,000	148	0.09%	$254,477	1.71%	$1,719,439
2,000,000 - 5,000,000	208	0.13%	$621,044	4.17%	$2,985,788
5,000,000 - 10,000,000	53	0.03%	$362,816	2.44%	$6,845,585
10,000,000 - 5,000,000,000	35	0.02%	$1,051,519	7.06%	$30,043,400
Total with AGI	158,193		$14,998,118

Breakdown of Income Taxes Paid by AGI Ranges in 2022

Tax Year 2022	Taxable Filings	Taxable Income	Taxes Paid	Avg. Tax Rate	Marginal Tax Rate
	(in thousands)		(in millions)	Tax Paid/Taxable Inc
National Total	110,626	$11,404,335	$2,098,923
AGI Ranges	***	***
No AGI	0	$0	$129
0 - 5,000	102	$150	$19	12.67%	10%
5,000-10,000	119	$405	$41	10.12%	10%
10,000-50,000	36,466	$639,466	$63,735	9.96%	12%
50,000 - 75,000	21,378	$926,334	$100,104	10.81%	22%
75,000 - 100,000	14,549	$946,048	$113,079	11.95%	22%
100,000 - 200,000	25,547	$2,858,175	$397,720	13.92%	24%
200,000 - 500,000	9,990	$2,541,372	$478,105	18.81%	35%
500,000 - 1,000,000	1,671	$1,028,824	$254,285	24.72%	37%
1,000,000 - 1,500,000	360	$398,507	$110,819	27.81%	37%
1,500,000 - 2,000,000	147	$232,336	$67,287	28.96%	37%
2,000,000 - 5,000,000	208	$565,832	$166,027	29.34%	37%
5,000,000 - 10,000,000	53	$329,350	$96,476	22.29%	37%
10,000,000 - 5,000,000,000	36	$937,404	$251,097	26.79%	37%
Total with AGI	158,193		$14,998,118

Universal Democratic Agenda - Keep It Simple, Stupid

1 - Free College Tuition ($20,000/yr. indexed at 2%/yr.) for every American age of 30 and under

2 - Minimum Wage of $20/hr. for every American worker indexed at 2%/yr.

3 - Optional 100% Medicare Insurance for every American under age 65 for $400/mo (less for taxable incomes below $75,000).

• Coverage free for all Americans age 18 and under.

4 - FHA mortgages with 2% down and 3% interest for homes with prices upto $1,000,000 indexed at 2%/yr

5 - Reinstate the 2021 Child Tax Credit indexed at 2%/yr.

Conclusion

There are unending number of issues but you have to settle on a few clear ones to get anythhing done.

These proposals will impact every American for the better.