Update - The May 12, 2026 NYCERS Trustees Meeting - Admin Budget for FY-2027 - the Phantom Legacy Replacement Project

FY-2027 NYCERS Administrative Budget

At the May 12, 2026 NYCERS Board meeting, the trustees adopted the administrative budget for FY-2027 without any discussion.

After the adoption of the budget, there was a short comment made by the Comptroller's representative about line item "903".

For the general public that is the non-payroll budget component for "Technology - Modernization and Implementation". That is where the costs for the Legacy Replacement Project (LRP) are buried.

The comment was that the trustees should keep an eye on the costs to see that they go down over time.

Reference to "903" is a clear sign of the new found avoidance of mentioning the LRP problems in public session of the Board meeting.

Background on "903"

In the table below you can see annual growth in line item "903" alomg with "902" which reflect the costs for non-mainframe tech work.

I don't have the FY-2027 data yet. I will update when I receive the public budget from NYCERS.

Details on the FY-2027 Budget

I just got the FY-2027 budget figures and you can see from the bottom of the chart that there are major reductions in "903" and "902" going foward.

The trouble is there is no explanation why the costs have gone down. The trustees have taken some action but there is no analysis of what has happened to the LRP project.

The quote below is the only reference to the LRP project in the budget executive summary along the new vague 2030 "completion" date:

NYCERS’ current five-year Strategic Plan, known as Vision 2027, was set to complete at the end of FY 2026, including initial plans for the Legacy Replacement Project (LRP). As of February 1, 2026, NYCERS has completed approximately 70% of the Vision 2027 Strategic Plan, and expects to be 100% complete by the end of Fiscal Year 2026, except for the Legacy Replacement Project, which is now shifting to FY 2030.

The only specific information on the project is that the LRP contract with Accenture was increased from $10.8M in FY-2026 to $ $17.7M in FY-2027.

There is no reference to the promised "revised" scope of the contract.

There is also a question about the cost of the Penfax software license which Accenture is using to build the LRP project.

It is part of the "903" budget code and it has an ongoing annual costcost of $4.0M.

It is projected to disappear in FY-2030 which would collapse the work done on the LRP project.

The only thing left of "903" in FY-2030 is a $3M contingency allocation.

Conclusion

NYCERS and the trustees do not want the public to know how bad this problem is.

Why in heaven's name did the trustees appoint Reyes as the executive director since she has been in charge of the LRP fiasco since 2015.

NYCERS Admin Budget for "903" amd "902"

Fiscal Year	"903" Amounts	"902" Amounts
2019	$18.7M	$5.6M
2020	$18.4M	$9.0M
2021	$19.8M	$11.2M
2022	$55.1M	$11.2M
2023	$56.9M	$13.2M
2024	$61.0M	$15.0M
2025	$54.8M	$19.9M
2026	$43.1M	$24.7M
Projected as of 2025
2027	$60.2M	$33.1M
2028	$41.7M	$34.1M
2029	$35.7M	$35.1M
2030	$17.6M	$36.2M
Adoptef Budget for FY-2027
2027	$37.5M	$24.0M
Projected as of 2026
2028	$28.4M	$24.7M
2029	$36.8M	$25.4M
2030	$3.0M	$26.2M
2031	$0.0M	$26.9M

Note: Executive Session

Earlier in the meeting and prior to entering executive seesion to deal with disability cases, the executive director asked to have the admin budget added to the items to be discussed in executive session. The trustees agreed.

There is a question, however, of whether the budget is a legal item for discussion in executive session. See reference below to the Open Meetings Law.

We can conclude, however, that in the executive session there were discussions about the budget and the LRP issues based on the comment made by the Comptrollers"s representative in open session.

As of today there is no official public notice of the LRP problems, its causes, corrective plan and revised costs for the project. We do have a previous mention of an alleged September 2030 completion date but no new budgeted costs.

There is also no action on how to correct the previous failures or to prevent them from occurriing again in the future.

NYS Open Meetings Law

OPEN MEETINGS LAW

_______________________________________________________________________________________________

PUBLIC OFFICERS LAW, ARTICLE 7

§100. Legislative declaration.
§101. Short title.
§102. Definitions.
§103. Open meetings and executive sessions.
§ 103-a. Videoconferencing by public bodies [Expires and deemed repealed July 1, 2026].
§104. Public notice.
§105. Conduct of executive sessions.
§106. Minutes.
§107. Enforcement.
§108. Exemptions.
§109. Committee on open government.
§110. Construction with other laws.
§111. Severability.

§105. Conduct of executive sessions.

1. Upon a majority vote of its total membership, taken in an open meeting pursuant to a motion identifying the general area or areas of the subject or subjects to be considered, a public body may conduct an executive session for the below enumerated purposes only, provided, however, that no action by formal vote shall be taken to appropriate public moneys:

• a. matters which will imperil the public safety if disclosed;
• b. any matter which may disclose the identity of a law enforcement agent or informer;
• c. information relating to current or future investigation or prosecution of a criminal offense which would imperil effective law enforcement if disclosed;
• d. discussions regarding proposed, pending or current litigation;
• e. collective negotiations pursuant to article fourteen of the civil service law;
• f. the medical, financial, credit or employment history of a particular person or corporation, or matters leading to the appointment, employment, promotion, demotion, discipline, suspension, dismissal or removal of a particular person or corporation;
• g. the preparation, grading or administration of examinations; and
• h. the proposed acquisition, sale or lease of real property or the proposed acquisition of securities, or sale or exchange of securities held by such public body, but only when publicity would substantially affect the value thereof.

2. Attendance at an executive session shall be permitted to any member of the public body and any other persons authorized by the public body

Accountability for Past Failures - Another Interesting AI Question on the Legacy Replacement Project

In addressing the Legacy Replacement failure the AI system reponded to the following question

Question:

Accountability for past failures

Answer:

For past failures, accountability should mean a formal review of decisions, missed warnings, and budget overruns, followed by documented consequences if leadership ignored risks or misrepresented progress. In a project like NYCERS’s legacy replacement effort, that should include named responsibility for schedule slips, failed oversight, weak vendor control, and any avoidable cost growth.

What accountability should cover

Current and former managers should be held to account for:

• Approving unrealistic timelines or scope.
• Failing to surface legacy dependencies early.
• Allowing repeated delays without corrective action.
• Not reporting the true budget impact to trustees or oversight bodies.

Accountability is not just about blame; it is about showing who made which decisions, what they knew, and when they knew it. If management had enough information to see the project was in trouble and still did not act, that is a governance failure, not just a technical one.

What a credible review looks like

A serious review should reconstruct the project timeline, compare promised milestones to actual delivery, and identify where oversight broke down. It should also examine whether internal leadership relied too heavily on the vendor or allowed the program to drift without independent challenge.

If the review finds that warnings were ignored, management should not simply remain in place without consequences. Consequences can range from mandatory corrective plans and performance conditions to reassignment or removal from the project, depending on the severity of the failures.

Budget consequences

Past failure accountability should also include financial responsibility in the sense of disclosure and control, not personal reimbursement. That means reporting the full cost of delays, duplicated support, rework, and contract changes, and then reducing those losses going forward.

The key question is whether management can demonstrate that the same errors will not be repeated. If they cannot, then the case for stronger board intervention becomes much stronger.

AI - NYCERS Trustees - Legacy Replacement Project

Genearl AI querires are now available to everyone. Let's see what answer the AI system (Perplexity) gives to the following question.

Question:

Do you think the trustees are covering up problems with the legacy replacement project?

Answer:

I cannot conclude that the trustees are definitely covering up problems—there is no public evidence of an intentional cover-up—but there are strong transparency red flags that make it reasonable to question whether the Board is being fully open about the Legacy Replacement Project's severity.

What the public record shows

Observation - Why it raises concern

1. Payments to Accenture stopped in FY 2025 ($0 paid after $17.9M in FY 2024)
   - NYCERS' official FY 2025 report does not mention the stoppage at all, even though Accenture holds the LRP contract.

2. April 2026 re-baseline promise not publicly delivered
   - NYCERS said an updated schedule and re-baseline plan would be presented to trustees by April 2026, but LRP was removed from the March and April Board agendas with no public explanation.

3. Project removed from recent Board agendas
   - Up through February 2026, the Executive Director reported on LRP at monthly meetings; in March and April 2026, the problem was "dropped from the board meeting agenda with no mention."

4. Trustees made no public comment on these omissions
   - The blog post explicitly notes: "The trustees have made no comment on the new omissions."

5. Official language is unusually upbeat
   - The FY 2025 report says "the project continues to advance" despite the payment stoppage, missing re-baseline deadline, and external descriptions of the project as a "fiasco" and "disaster."

The blog author explicitly concludes: "I can only assume that the trustees are covering up this disaster." That is a strong claim, but it stems from the pattern above: serious problems, missing disclosures, and silence from the Board.

Alternative (less alarming) explanations

There are plausible non-cover-up explanations that would still be poorly communicated:

• Ongoing contract negotiations or dispute – Management may be working with Accenture (or legal counsel) on a pause, renegotiation, or termination and prefers not to disclose details until terms are finalized.
• Internal re-baseline still in progress – The re-baseline plan may not be Board-ready by April, but management failed to communicate the delay.
• Agenda prioritization – The Board may have removed LRP temporarily due to other priorities, but again failed to explain this publicly.

Even if none of these are cover-ups, the result is the same: trustees are not providing adequate transparency about a high-risk, high-cost project.

Balanced assessment

• Evidence of intentional cover-up?
  Not publicly available. No audit findings, whistleblower reports, or official investigations have concluded that trustees deliberately concealed information. The Comptroller's recent audit letter on NYCERS did not identify LRP as a fraud/waste issue, though it focused on OTPS expenditures and travel approval.
• Evidence of poor transparency and possible downplaying?
  Yes. The combination of zero Accenture payments in FY 2025, the missed April 2026 re-baseline deadline, removal from Board agendas, and no public trustee comment is consistent with either a cover-up or at least a serious failure of oversight communication.

What would change this assessment

Transparency would improve significantly if:

• The Board publicly explains why LRP was removed from the March and April agendas and why no re-baseline was presented in April 2026.
• NYCERS discloses the current contractual status with Accenture and the reason for $0 payments in FY 2025.
• Trustees hold a public, dedicated session on LRP with a realistic schedule, cost estimate (including the ~$43M in secondary costs), and governance plan.

Bottom line

I do not think we can definitively say the trustees are covering up problems without more evidence of intentional concealment.
However, the current handling of the Legacy Replacement Project is consistent with a pattern of insufficient transparency and possible downplaying of a serious crisis, and it is entirely reasonable for members of the public, retirees, and auditors to ask whether the Board is avoiding scrutiny of a failing $84M+ IT project.

The Legacy Replacement Project Has Gone Dark - April, 2026

With the quote below from the FY-2025 financial report, you can see that NYCERS is struggling with a major crisis in its massive $84 million IT upgrade project. Since 2021 the project has also incurred secondary costs of about $43 million.

Up until February 2026 the executive director was reporting at the monthly board meeting to the trustees about the status of the LRP project.

Then in March 2026 the problem was dropped from the board meeting agenda with no mention of it at the March meeting. In April 2026 it was again missing from the agenda with no comments at the board meeting.

April is particularly significant since April was the target date for reporting to the trustees "on a comprehensive re-baseline plan to complete the project , with an updated schedule and project details"

The trustees have made no comment on the new omissions. I can only assume that the trustees are covering up this disaster.

You can just imagine how the trustee budget committee handled the LRP project at the March 26, 2025 budget meeting. The Chairperson has such great trust in the executive director as he clearly stated at the March board meeting.

Extract from NYCERS FYY-2025 Financial Report - Page 14

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 project details to be presented to the NYCERS Board of Trustees by April 2026.

The Legacy Replacement Project (LRP) Fiasco - Trustees - Admin Budget for FY-2027

The NYCERS Trustees will be meeting with NYCERS staff at the end of this March to prepare the agency's FY-2027 admin budget.

Budgeting for the Legacy Replacemet Project Disaster

It is unclear how the trustees will be dealing with the LRP disaster.

Based on a statement in the FY-2024 Annual Financial Statement released in December 2024, NYCERS staff was aware of a big problem with the LRP contract with Accenture in the late spring of 2024.

There was an reduction in the Accenture appropriation for FY-2025 budget from the amount in FY-2024 ($18.7 million down from $23.2 million) but there was no mention of LRP problems in the FY-2025 budget presentation that was sent to me in response to my FOIL request.

But the financial statement is open public record and in December 2024 there is a clear reference to problems during FY-2024 with reference to reworked contract scope available in the spring of 2025.

The spring of 2025 has come and gone with no new contract scope but there is a four and half year delay in the completion date of the LRP project.

The FY-2026 budget appropriation for the Accenture contract dropped to $10.8 million with a claim of completed the "replanning" by June 30, 2025. That date failed.

the FY-2025 annual financial statement issued in December 2025 promised a new "replanning" date of April 2026 with a completion date of December 2030.

Missing Key Data

There was a key piece of information, the schedule of payments to contractors, missing from the finacial statement which I had to FOIL. When I received it, it became clear that NYCERS had paid no money to Accenture during FY-2025.

Note: the official version of the NYCERS FY-2025 financial statement on its website is still missing the schedule.

Yet NYCERS staff had budgeted $10.8 million for work to be paid to Accenture in FY-2026 without mentioning that the $18.7 million for FY-2025 had not been paid.

In conjunction with the main LRP contract. NYCERS has a large quality assurance contract to check the work of the main contractor. In addition the Board of Trustees has a contract for a risk consultant reporting to the Trustees directly for the LRP project. There should be a great deal of documentation on what is happening with the project in spite of the total lack of questions from the trustees about the status of the project.

The tables below display the amounts budgeted and paid for the Accenture LRP contract and other contracts that are part of the LRP project.

Accenture Payments

Fiscal Year	Budgeted Amount	Amouny Paid
2026	$10,776,302	open
2025	$18,728,407	$0
2024	$23,191,794	$17.9 million
2023	$23,057,826	$817,492
2022	$19,317,745	$9.8 million
2021	$825,794	$926,341
Salesforce Project
2020	$6,095,000	$3,614,398
2019	$9,350,000	$7,961,315
Fiscal Year	Budgeted Amount	Amouny Paid

The Gartner IT consultant

Gartner Payments

Fiscal Year	Budgeted Amount	Amouny Paid
2026	$2,640,000	open
2025	$1,764,000	$3,868,000
2024	$2,000,000	$2,020,000
2023	$1,800,000	$2,400,000
2022	$2,300,000	$2,400,000
2021	$1,647,285	$2,230,816
Salesforce Project
2020	$2,180,000	$805,780
2019	$2,395,000	$1,665,620
2018	$850,000	$575,000

The LRP Risk Consutant (Linea) reporting to the Board of Trustees

LRP Risk Consultant (BOT)

Fiscal Year	Budgeted Amount	Amouny Paid
2026	$700,000	open
2025	$700,000	$711,672
2024	$700,000	$602,184
2023	$700,000	$656,928
2022	$700,000	$656,928
2021	$800,000	$624,80
2020	$500,000	$0
2019	$0	$0

The LRP Quality Assurance Vendor

LRP Quality Assurance Vendor

Fiscal Year	Budgeted Amount	Amouny Paid
2026	$1,366,420	open
2025	$1,366,420	vendor not identified
2024	$1,518,244	vendor not identified
2023	$1,518,244	vendor not identified
2022	$2,000,000	vendor not identified
2021	$112,500	vendor not identified
2020	$0	$0
2019	$0	$0

The LRP - Penfax Pension Software

LRP - Penfax Pension Software

Fiscal Year	Budgeted Amount	Amouny Paid
2026	$3,991,767	open
2025	$4,194,802	not reported
2024	$3,991,767	not reported
2023	$3,585,697	not reported
2022	$3,179,628	not reported
2021	$3,059,093	not reported
2020	$0	$0
2019	$0	$0

The General Software Maintenance/Servises and the CRM (Salesforce) Sotware Mantenance Items

Software Maintenance - General and Salesforce

Fiscal Year	General Software Budgeted Amount	Salesforce Softawre Budgeted
2026	$3,879,313	$6,190,865
2025	$1,706,000	$,4,490,865
2024	$1,032,000	$3,150,000
2023	$1,000,000	$2,400,000
2022	$850,000	$2,400,000
2021	$850,000	$2,400,000
2020	$850,000	$1,914,000
2019	$590,000	$956,000
2018	$590,000	$956,000
2017	$504,000	$0

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.

Coverup of the Problems with the NYCERS’s Legacy Replacement Project

NYCERS posts videos of its regular monthly board meetings on its website. There are two videos for each meeting .

The first video, Part 1, is a every short clip of only an opening roll call and a motion to go into executive session to hear disability cases and litigation issues. The second video, Part 2, starts with a return to public session and all the items which need to be addressed in public session. The second video usually runs for about 45 minutes but can be shorter.

One of the items that is currently being addressed in public session is the status of the Legacy Replacement Project (LRP). This project is extremely expensive and seriously behind schedule.

Long story short, the LRP contract with Accenture is now projected to be four years late, 2030 rather than 2026 and a detailed resource plan supporting the new 2030 date has already missed its June, 2025 delivery date. NYCERS has paid Accenture approximately $85 million since 2021 and $65 million in secondary costs.

The May 9, 2025, Board Meeting

At the end of the regular LRP status presentation by the NYCERS LRP project manager, a Board member directed a question at the project manager:

“We heard in a prior presentation that, I guess how I would describe it, that there was a lack of wholehearted commitment on at least part of the Accenture team and maybe at the higher levels in terms of the things we would like to see in terms of… therefore…How does that translate down to the NYCERS staff working with the Accenture people. Are they pulling their punches and are they giving it their all?”

(interruption by the Chairperson):

“and so, thanks for the question, I ask you (the project manager) to be mindful in your response that we are in in public session.
“It may be the case that we should have this as an offline conversation.”

After the following silence and subdued laughter, the trustees moved on to the next topic.

Based on the Chairperson’s comments and the silence of all the other trustees, it is clear that the Board is aware of the fiasco surrounding the LRP project and are intent on keeping the problem under wraps.

Time for the Department of Investigation

I recently posted about the incompetence surrounding the LRP project. There now is evidence of a coverup surrounding the LRP project. It is definitely time for Department of Investigation to look into this project.

PR Nonsense from the NYCERS FY-2026 Budget Report on the LRP project

MAJOR TECHNOLOGY PROJECTS/DIGITALIZATION

Legacy Replacement Project (LRP)

The Legacy Replacement Project (LRP) is a transformative, five-phase project to build a new pension administration system. As part of NYCERS’ overall strategic vision, LRP will streamline and automate operational processes and enhance the client experience. In Phase 0, NYCERS and its system integrator completed an overall project assessment, followed by Phase 1, the implementation of foundational changes, in January 2023.

During Phase 2 execution, the team encountered challenges including design delays, complex configuration needs, unforeseen technology compatibility issues, and difficulties in decommissioning the legacy system. As a result, the team decided to deploy the completed Phase 2 functionality as a separate, smaller phase (Phase 2.0). Phase 2.0 successfully deployed on January 21, 2025 as planned, delivering improvements to document management, security, and agency tools. NYCERS and its system integrator are currently replanning the remaining program scope to mitigate risks and ensure a high-quality outcome. The replanning is expected to be completed by June 30, 2025, with the combined Phases 2 and 3 beginning immediately thereafter. The program is now anticipated to be completed by December 2030.

A Four Year Delay in the NYCERS LRP Project - Time for DOI to Investigate

In its FY-2024 financial report (released in December 2024), NYCERS stated that there was a serious delay in completing its Legacy Replacement Project with only a vague reference to changes in the legacy systems. NYCERS promised a report with a new schedule at its February 2025 Board meeting. See the text below:

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.

February 2025 Board of Trustee Meeting

Last week at that meeting, the staff reported to the trustees that the new tentative completion date for the LRP project would be at the end of 2030 rather than the original September 2026 date. That is over four years behind schedule for a five-year contract.

Since December, Accenture (the "systems integrator"), the firm developing the project, delivered a revised high-level plan for the completion of the remaining scope of the project with a target date as of the end of 2030. The NYCERS staff stated that it had reviewed this plan.

Going forward, Accenture will provide a detailed resource plan supporting the 2030 completion target date. This detailed plan is needed for NYCERS to be able to give final approval for the new plan. The NYCERS approval of this new plan is targeted for the spring of 2025.

After a two-minute presentation there were no questions from the trustees concerning this four-year delay. This is obscene.

Background

NYCERS started the LRP project in July 2015. It was the brain child of Liz Reyes, the IT director at the time. She now is the deputy executive director and is hoping to become the executive director in May when the incumbent retires.

NYCERS signed the LRP implementation contract with Accenture in April 2021. It had an approximate term of five years with a total cost of $85.1M.

Three years later in 2024, Accenture notified NYCERS that the September 2026 completion date was not achievable.

When does gross incompetence become criminal?

I am not aware of any evidence of corruption involving the LRP project.

However, NYCERS’s glaring incompetence and obvious inattention to the project’s risks raises red flags that should be investigated.

NYCERS has never produced a cost/benefit analysis for this project.

Gartner has been under contract to NYCERS since 2015 providing advice on the LRP project. What was that advice?

During 2019 and 2020, NYCERS paid Accenture approximately $12M to install a Salesforce application. This means that Accenture has had extensive experience with NYCERS’s operations. Why did it take Accenture three years to come up with a new completion date four years out from September 2026?

The Legacy Replacement Project on Life Support

Collapse of the Legacy Replacement Project - Update 1/14/2025

I just recently commmented on spending problems with the Legacy Replacement Project at NYCERS.

Days later I became aware of a statement in the NYCERS FY-2024 NYCERS financial report, pages 12-13. The report was released in late December 2024, roughly three weeks ago. The statement indicates serious problems with LRP project. Below is the quote.

Quote from FY-2024 NYCERS ACFR

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.

The quote opens with an inaccurate statement that the LRP project started in FY-2021. It started in FY-2016. The project is now in its tenth year, FY-2025. It is also not responsible to say that it will be completed by September 2026.

The real problem, however, is raised in the highlighted text in the quote. As stated in the previous year's ACFR, Phase 2 was projected to "launch" in September 2024. That target has now vanished.

NYCERS states that at some point during FY-2024 a "range of legacy system changes" surfaced which impacted the Phase 2 timeline. At that point NYCERS was in the midest of the ninth year of the project or the third year of the Accenture contract. NYCERS gives no specific details of what the "changes" are and how they impact the project. I suspect that the scale of the legacy systems are overwhelming the standard Penfax software application which NYCERS contracted to handle the legacy functions. This obstacle will either force a redesign of the project with an associated delay or a revelauation of the total project.

NYCERS states that it will discuss a new timeline at the Febuary 2025 Board of Trustees meeting. That should be an interesting meeting.

The new Phase 2.0 is stripped down application that does not support any of the functions of the legacy systems. This minimal application has a delivery date of January 2025. This date is four months after the Septemebr 2024 date for the original Phase 2.

It now appears that the excutive director will be retiring on May 1, 2025 after seven and half years at NYCERS.

This project is out of control.

NYCERS CAFR/ACFR Comments on the Legacy Replacement Project since 2016

In light of the chaos described above, please refer to the quotes below from NYCERS annual financial statements from 2016 to 2024. The quotes are updates on what is happening with Legacy Replacement Project. Obviously NYCERS never thinks that anyone will backcheck what they said the year before.

I will let the quotes speak for themselves.

2016

NYCERS has embarked on a multi-year project to modernize our business processes and related technology. The principal objective of this initiative is to replace our legacy data processing environment and establish a new Pension Administration System that will transform the way we do business and interact with our members, pensioners, and various stakeholders such as employers and other City agencies. The intended outcome is to provide streamlined services in a modern context using up-to-date technologies that are flexible and provide value in an ever-changing environment.

2017

NYCERS is on a journey of transformation through the accomplishment of key initiatives that will span the next 5 to 6 years. We have been preparing for our upcoming multi-year legacy system replacement project, including developing the Request for Proposals, data analysis and data cleansing.

2018

During fiscal year 2018, NYCERS continued along the journey of transformation through the accomplishment of several key initiatives designed to help us deliver a world-class customer experience and enhance our operations, while preparing for the replacement of our legacy systems.

2019

The Legacy Replacement Project (LRP) is a 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 is intended to 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.

NYCERS issued a Request for Proposal (RFP) for the LRP on April 18, 2019. Proposals were received on July 15, 2019 and are currently under review.

2020

The Legacy Replacement Project (LRP) is a 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 is intended to 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.

NYCERS issued a Request for Proposal (RFP) for the LRP on April 18, 2019 and expects to complete contract negotiations with the selected vendor by December 31, 2020.

2021

The Legacy Replacement Project (LRP) is a 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 is intended to 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.

The LRP will be completed over five phases. Phase 1 began on June 22, 2021. It is anticipated each phase will take approximately one year to complete.

2022

The Legacy Replacement Project (LRP) is a 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 is intended to 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.

The LRP began in June 2021 and is expected to be completed by June 2026 over five phases.

Phase 1 is scheduled to launch in January 2023.

2023

The Legacy Replacement Project (LRP) is a 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 is intended to 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.

The LRP began in June 2021 and is expected to be completed by June 2026 over five phases. Phase 1 launched in January 2023. Phase 2 is currently scheduled to launch in September 2024.

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. >p> 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.

An Agency Adrift

During the 12/12/2024 NYCERS Board of Trustees meeting, the executive director, Melannie Whinnery, presented the FY-2024 budget reconciliation report. The key item in the report was that NYCERS had only spent $130.3M, which was $38.1M less than the budgeted amount of $168.4M.

The cause of the shortfall was reported to be mainly due to:

1. $27.2 M delayed payments for the Legacy Replacement Project (LRP, an IT upgrade project) because of the delayed implementation of the project and
2. $9.0 M unspent payroll allocation because of difficulty in hiring new authorized personnel.

The LRP shortfall

In the FY-2024 budget, the LRP project was budgeted at $61.03M for consulting services. I guess we can assume that, in spite of the shortfall and delays, NYCERS did pay $33.83M ($61.03M-$27.20M) for consulting on the LRP project in FY-2024.

Listed below are the official NYCERS budget and ACFR non-payroll costs for the previous eight years:

Non-Payroll Shortfalls

Year	Budgeted	Actual	Underspent
2024	$98.0M	$69.8M	$28.2M
2023	$90.4M	$47.8M	$42.6M
2022	$84.5M	$52.7M	$31.8M
2021	$50.2M	$38.7M	$11.5M
2020	$45.9M	$31.9M	$14.0M
2019	$43.5M	$38.4M	$5.1M
2018	$21.8M	$19.2M	$2.6M
2017	$20.9M	$20.2M	$0.7M

Since FY-2020, as seen in the table above , NYCERS has been significantly underspent the budgeted amounts for its non-payroll expenses with the LRP project being the big-ticket item.

The LRP project was proposed in the spring of 2015 and was originally to start in FY-2016. Miscellaneous components of the project finally did get started in FY-2018. An RFP for the LRP was issued in December 2017. It was, however, withdrawn six months later in June 2018.

The current executive director was hired in the fall of 2017

In FY-2021 the LRP contract was finally awarded to Accenture for $85M with a five-year term ending in June 2026. As reported at the December Board meeting, a stripped-down version of Phase 2 is supposed to be in place by the first quarter of 2025.

Phase 1 appears to have been in place by the spring of 2023. It basically entailed the selection of an off-the-shelf commercial pension administration software package, PENFAX. The annual license charges started in FY-2022 and are currently budgeted at $4.4M in FY-2025. This is just for the licenses and not the customized application. The package will need extensive customization which I suspect will be the core work of Phase 2 through Phase 5.

This project is way behind schedule and will be way over budget, assuming it is ever implemented. I cannot overstate the enormous costs that are being incurred by this project. NYCERS never lets on that this project is its tenth year of dvelopment and that it was origianlly a five year project.

LRP Costs

For the seven years since FY-2018, the costs for

1. software licenses have increased from $2.2M to $10.8M with a total cost for the seven years of $39.9M, and
2. computer consulting has increased from $3.0M to $40.4M with a total cost for the seven years of $104.4M. Yes, over $100 million.

These significant costs are despite the shortfall in spending.

You would think that there must be members of NYCERS, NYC workers belonging to DC-37, who could do this work more effectively and at less cost.

Note: DC-37 is a NYCERS trustee.

There are eleven consulting companies who have been paid over $2.0M in the last seven years:

Consultants Paid over $2M

1	Accenture	$41.0M
2	Gartner	$12.1M
3	InfoPeople	$8.6M
4	Universal Technologies	$7.5M
5	Rangam Consultants	$5.4M
6	Spruce Technology	$4.2M
7	Blue Hill Data Services	$4.2M
8	Experis US Inc. ---	$2.8M
9	Linea Solutions	$2.5M
11	Computer Management Resources	$2.5M
19	ZebraEdge Inc.	$2.2M

There are another twelve companies who have been paid over $1.0M in the last seven years. That is at least $12M plus.

There are another eight companies who have been paid over $500,000 in the last seven years. That is at least $4M plus.

We are not talking about DOD here. This is just a large municipal pension system, one of five in NYC.

The Staffing Shortfall and the Option Letter Delay

In the spring of 2023, as part of the NYCERS FY-2024 budget presentation, the executive director outlined serious production problems at the agency, especially the delays in producing option letters for new retirees (9/3/2923). Because of these problems the executive director asked for thirty two new full-time employees. The trustees approved only an increase of sixteen employees, raising the agency’s total of full-time employees to 501.

In the spring of 2024, the executive director, in a remote video meeting with the Municipal Labor Committee, projected that the option letter delay would be reduced to six months by the end of July 2024. She did, however, gave herself some leeway in that the agency was having trouble hiring new employees. July came and went without hitting the six-month mark.

As of the December 12, 2024, NYCERS Board meeting, NYCERS staff reported that the option letter delay was at nine months ( November 2024) down from 13 months in the fall of 2023. The new six-month target date was now moved to the first quarter of 2025. It was noted that the number of retirement applications had dropped in 2024, which was a help with decreasing the delay with producing the option letters.

At the same Board meeting the staff attributed the delay in solving this problem to the agency’s failure to hire new employees.

In FY-2021 and FY-2022 NYCERS had no problem hiring forty-five new employees.

Listed below are the official NYCERS budget and ACFR payroll costs for the previous eight years:

Payroll and Fringe Shortfalls

Year	Budgeted	Actual	Underspent
2024	$67.9M	$60.2M	$7.7M
2023	$56.0M	$57.7M	-$1.7M
2022	$51.3M	$52.3M	-$1.0M
2021	$48.1M	$48.7M	-$0.6M
2020	$45.9M	$45.7M	$0.2M
2019	$43.9M	$43.7M	$0.2M
2018	$40.9M	$40.4M	$0.5M
2017	$39.7M	$39.5M	$0.2M

Is a New IT System Worth $487M?

In the spring of 2015, NYCERS initiated a five year project (LRP) to modernize its IT systems. It was supposed to cost $132M and take five years.

It is now 2023, and the first phase of the replacement project is still in test. NYCERS has already budgeted $329M as of FY-2024 for the project and is projecting another $158M as of FY-2027, the new end date for the project. That adds up to a total of $487M. NYCERS unfortunately has a track record of underestimating future costs. So we should expect a higher total cost assumimg completion of the project.

The NYCERS budget was $55.2M in FY-2015. If you project a 3% increase every year, the FY-2024 budget would be $72.0M. The actual budget for FY-2024 is $165.9M.

In 2014, the City experienced a runaway IT project, CityTime. You can read the DOI report on the NYC.gov website. Just search for "CityTime" on the website. The LRP project is starting to look a lot like the CityTime project. There is no evidence of corruption but there is a lot to support a conclusion of gross incompetence.

Mayor Adams Budget Knife and the FY-2024 NYCERS Budget Update

In a June 17, 2022 posting, I outined the history of NYCERS administrative budget.

On June 21, 2023, the NYCERS trustess adopted the FY-2024 admin budget.

It was a 13.3% increase over the FY-2023 budget. See the updated table below. The numbers speak for themselves. I wonder if the trustees are aware of this spending history.

At the same time NYC adopted a FY-2024 budget that was a reduction from $111.2B to $107.7B, a 3.5% cut. To be fair, the FY-2023 budget was originally adopted at $101.1B. What made the Mayor allow NYCERS to increase its budget by 13.3%, while the City's budget was cut by 3.5%?

History of NYCERS Admin Budget 1996-2024

Fiscal Year	F/T Count	P/T Count	College Aides / Hourly	PS Budget	OTPS Budget	Fringe	Total	% Increase
2024	501	30	16	$54,290,508	$98,040,138	$13,633,903	$165,964,549	13.37%
2023	485	30	16	$43,016,089	$90,436,500	$12,942,144	$146,394,733	7.92%
2022	474	27	16	$38,397,943	$85,531,063	$11,719,465	$135,648,471	37.94%
2021	438	27	16	$36,842,549	$50,210,145	$11,283,945	$98,336,639	7.10%
2020	438	27	16	$35,262,139	$45,862,557	$10,689,350	$91,814,046	4.97%
2019	428	35	0	$33,592,612	$43,532,302	$10,344,565	$87,469,479	39.44%
2018	411	35	0	$31,704,410	$21,832,718	$9,194,015	$62,731,143	3.55%
2017	401	35	0	$31,056,080	$20,916,796	$8,605,288	$60,578,164	4.81%
2016	392	35	0	$30,233,989	$19,407,619	$8,155,517	$57,797,125	4.70%
2015	392	5	30	$29,131,972	$18,154,572	$7,915,476	$55,202,020	3.68%
2014	383	5	30	$26,813,635	$18,761,240	$7,669,819	$53,244,694	2.18%
2013	380	5	20	$26,623,635	$17,951,822	$7,532,499	$52,107,956	1.93%
2012	372	12	0	$25,756,827	$18,781,428	$6,603,649	$51,122,139	1.14%
2011	372	12	0	$26,046,827	$18,492,228	$6,006,573	$50,545,628	2.76%
2010	372	12	0	$26,046,827	$17,777,228	$5,362,640	$49,186,695	1.88%
2009	371	13	0	$25,189,842	$18,208,861	$4,879,903	$48,278,606	6.22%
2008	371	13	0	$23,597,857	$17,259,313	$4,799,066	$45,656,236	10.80%
2007	364	13	0	$22,616,783	$14,258,471	4,375,788	$41,251,042	5.73%
2006	342	13	30	$20,255,911	$14,683,855	$ 4,076,823	$39,016,589	1.01%
2005	342	13	30	$19,737,687	$14,851,355	$3,887,624	$38,476,666	1.2%
****
1996	154	0	30	$6,199,709	$2,573,715	na	$8,773,424	5.93%

The NYCERS Trustees Are Out of Touch

At the April 17, 2023 NYCERS Board of Trustees meeting, a NYCERS employee gave an update on the status of the Legacy Replacement Project (LRP). You can find the start of the presnation at the 53rd minute of video of the meeting. It runs for four minutes and ends with no questions from the brain dead trsutees.

I defy anyone to explain in plain English what the employee said. Maybe it's that the project is 15 months behind schedule. The four minute ramble is the most incoherent pile garbage I have ever heard.

The LRP

The LRP was started in 2015. Since FY-2016 NYCERS has spent over $50M on consultants and over $30M on software.

The City - Cutting Health Benefits for City Retirees on Medicare

While the City is turning a blind eye to runaway software projects at NYCERS, it is cutting the health benefits for city retirees on Medicare.

Climate Change and Private Equity

Someone needs to tell the Comptroller and the trustees that when it comes to private equity/limited partnerships, they have absolutely no control over what the PE general manager does with the money that the pension fund invests with the PE fund. You want to take action about climate change - get out of limited partnerships. They are for the dumb-dumbs in the room.

IBM and the Legacy Replacement Project

In April, IBM released a presentation, Myth versus reality - Modernization on IBM Z, outlining the firm's strategy for upgrading IBM's traditional mainframe systems.

The main thrust of the presentation is that converting to other platforms is significantly more expensive than upgrading the mainframe platform. Of course, IBM has a vested interest in this claim but the firm's arguments match up with my experience in building systems over the years.

As reference, in 2016, I helped a client convert from in-house AS/400 based application system to a a third party MS Sequel Server based industry oriented application system. The implementation required customization but the conversion was relative simple because the new application was already written and the old AS/400 system functioned on a very basic flat file system without overwhelming transaction volume.

The NYCERS situation, however, is radically more complex with massive transaction volumes. In addition the new application is not yet written.

IBM also has published a short five page document listing the problems that conversion projects run into Problems with Offloading Data.

The Bleeding Has Started - Legacy Replacement Project - $85.0M - Accenture

Legacy Replacement Project - $85,076,693 – Accenture

On February 26, 2021 NYCERS finally awarded the Legacy Replacement Project (LRP) contract to Accenture. The cost of the contract is $85,076,693. The LRP is supposed to be a five-year project. It was first proposed in the spring of 2015.

I have been writing about the LRP for the last six years. My first post was in 2015. My most recent post was in 2020. This boondoggle started in the spring of 2015 and has been dragging along ever since. Thank god the legacy systems built by civil servants have lasted over 40 years.

On of April 8, 2021, in support of the LRP project , the trustees adopted a massive increase in the NYCERS FY-2022 admin budget. The amount approved was $136.0M. As contrast, the budget in FY-2015 was $55.0M. This is at the same time as the mayor is cutting the medicare benefits of NYC retirees.

I have no hope that this lunacy will stop. After a six year delay in the start of this project, the trustees at the board meeting were thanking Liz Reyes for her great work on the project. What can you expect from people who are brain dead.

Accenture LRP Contract

The initial work, Phase 0, is a ten-week effort by Accenture to analyze its contract plans and possibly propose changes but with no cost increases. This phase may be longer than ten weeks. At the end of this phase either side can opt out of the contract without penalty or cost.

The second part of the contract, Phase 1, is scheduled to start July 1, 2021 and end December 31, 2021. The five-year term of the contract gives us an end date of June 30, 2026. I wonder who will be in the White House then.

Other Contracts Linked to the LRP Project

1. NYCERS has paid Gartner, the consulting firm, $7.1M since FY-2015.
2. Risk advisor to the Board of Trustees. The contract was awarded to Linea Solutions, Inc. on 7/21/2020 at a cost = $4,598,496 with a period of five years.
   • Will need to be place until 6/30/2026.
3. Quality Assurance advisor (projected award date - April 30, 2021) to NYCERS staff for the project. Contract being negotiated. Cost unknown. Period five years.
   • Will need to be in place until 6/30/2026.
4. Mainframe maintenance for five years while the LRP is being implemented. Contract awarded on 2/11/2019 to Blue Hill Data Services. Cost = $3,894,000. Period of five years.
   • Will need to be place until 6/30/2026.
5. FileNet maintenance for five years while LRP is being implemented. Open RFP issued on 11/7/2019. Cost unknown.
   • Will need to be place until 6/30/2026.
   • NYCERS has allowed this system run out of support both from Microsoft and IBM.
6. Roughly 30 computer consultant contracts, each averaging $150,000 per year. Yearly cost of $4.5M
7. Office reconfiguration in FY-2020 that cost $3,448,080.
   • In FY-2000 NYCERS moved into 133,000 sq. feet of totally brand-new class A office space. It was the most modern office space in the NYC government. It rivaled anything in the private sector. God help us what they have done to that office.
8. Customer Relationship Management (CRM) software. Contract was awarded to Accenture, the same firm with the LRP contract, on 8/8/2018
   • at a cost = $14,832,123, with two modifications:
   • $654,000 as of 6/1/2020, and
   • $138,780 as of 12/24/2020.
9. In FY-2019 and FY-2020 NYCERS paid Accenture $11,575,713, and $4,381,360 to a third-party firm for licenses & support as part of the CRM project.
   • Not sure what the value of the CRM is to the NYCERS membership.
10. A replacement IVR system contract was awarded on 12/29/2020 to Genesys Telecommunication Labs. Cost = $712,885.
    • The first phase of this system is promised to be in place by 4/30/2021. It will entail switching over from in-house Avaya interactive voice response (IVR) system to a cloud-based phone system integrated with the CRM system. At this point Genesys will not have an IVR in place.
    • Phase 2 does not yet have a timeline, scope of work, or I suspect a price tag. It is not clear whether Phase 2 is covered by the initial cost figure.
    • Phase 2 is the part where Genesys will create the new IVR system. Sounds like Avaya needs to stay in place until after Phase 2 is completed.
    • I do not see how this will solve the call center chaos that exists at NYCERS. In spite of the obvious, there is no word of increasing the call center staff.
11. At the Dec 10, 2020 board meeting the Trustees adopted a resolution approving the ten-year LRP project at a cost of $279.0M.
    • Not sure what value this has except to warn everyone that a tsunami is coming.

FY-2021 Budget: A Year of Challanges

On May 14, 2020, the NYCERS Board of Trustees adopted the FY-2021 Admin Budget. The new budget reflects a 3% reduction from the FY-2020 budget due to the economic impact of the Covid-19 virus epidemic. I had previously predicted a much larger reduction.

The amount of the new budget is $78.7M down from the $81.1M in FY-2020. NYCERS chose to take the full 3% reduction in the non-personnel part (OTPS) of the budget and avoid any payroll cuts. This meant that the OTPS amount from FY-2020 was reduced from $45.9M to $42.8M in FY-2021.

While a 3% reduction is significant for any organization, this 3% reduction is a radical cut for NYCERS. Based on planning information in the FY-2020 budget report, NYCERS was planning to increase its OTPS for FY-2021 to $88.0M. This increase was meant to fund the first year the implementation phase of legendary Legacy Replacement Project (LRP).

This “five year” project has been in play since the spring of 2015 and the contract has not yet been awarded. There is a current promise to award the contract in the fall of 2020. As of today, the agency has not been authorized to spend the $46.0M needed to start the actual work on the project. I suspect the agency has delusions that the trustees will approve a budget increase in the fall. In anticipation NYCERS mentions this objective in a note buried in the supporting charts in the budget documents.

A prudent evaluation of the City’s finances would lead to a much more cautious view. This is not a traditional budget crisis for the City. The full impact of the epidemic, on many levels, is unknown. Any attempt to increase the NYCERS budget will run into intense political push back. In fact, it is quite likely that there will be more reductions during the year.

I have been commenting on the LRP project since 2015. The budget that year was $47.3M. Last year it was $81.1M. NYCERS has still not written a line of code for the LRP project. It now looks like it will be another lost year.

In this year’s budget document NYCERS made mindless claims about its Enterprise Risk Management (ERM) program. You can read the verbal garbage below. NYCERS can be forgiven for not having foreseen the Covid-19 disaster but by chasing after a monster five-year IT project, NYCERS set themselves for an epic disaster. Let no one say that they were not warned.

Instead of methodically building small replacement pieces for the old application systems and being in position to adapt to ever changing technology, NYCERS chose to chase after a phantom.

NYCERS did however buy themselves an upgraded website for $40M with annual support cost of $3.0M. NYCERS is the ultimate white whale when it comes to IT contracts.

Verbal Garbage

This is a quote from the executive director's budget letter. I defy anyone to translate this into plain English.

MANAGING RISKS

NYCERS continues to experience a significant amount of change. In recognition of this, we will continue to mature our Enterprise Risk Management and Information Security programs in FY 2021. We will also continue our data cleansing efforts to reduce the risk of having inaccurate data in our new pension administration system. Our data validation practices are also being continuously reviewed and enhanced. Enterprise Risk Management (ERM) Program

NYCERS’ ERM Program was established to enhance enterprise-wide risk governance, including identification, mitigation, management, and monitoring, as well as creating a risk-focused culture.

During the past year, the Enterprise Risk Committee (ERC) made significant progress in maturing NYCERS’ ERM Program. A comprehensive suite of governing documents was developed that includes an Enterprise Risk Charter, Risk Appetite Statement, and Risk Escalation Criteria. The ERC also offered educational webinars to Executives on Finding and Fixing Fraud and Creating a Sustainable Vendor Risk Management Program. NYCERS’ first Fraud Risk Assessment is currently in progress.

In FY 2019, an agency risk assessment was conducted. In FY 2020, the risk assessment was expanded to include division risk assessments in addition to the agency risk assessment. In FY 2021, the risk assessment will be expanded to begin at the unit level, so that the assessment process identifies risks at every level of the organization and surfaces material risks for appropriate action.

NYCERS’ ERM program was created and supported by staff who also have full-time operational roles. Now that the program has been implemented, it requires resources not only to continue to grow the program, but also to monitor the risks that have been identified. In FY 2021, we will continue to mature the ERM program to include additional critical risk identification and mitigation initiatives that will require dedicated attention and expertise, including the development of a robust Vendor/Third Party Risk Management process.