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.

So, With an Unlimited Budget, I Guess Five Months is Good Enough for an Option Letter.

In December 2019, I wrote a complaint about how NYCERS was taking six or more months to produce final benefit letters for newly retired members.

At the March 11, 2021 Board of Trustees meeting, the "Chief Operations Officer" reported to the trustees that NYCERS was now getting the benefit letters out in five months and had met its goal. She also asked if she could stop reporting to the trustees about the benefit letters as long as she was meeting the five-month goal. The trustees agreed to the request.

I am sorely tempted to call the trustees stupid but that is not accurate. The decision they agreed to was stupid just like paying $245M/yr for bad investment advice.

First of all, five months is a poor goal. The traditional goal is three months. Second, they now have no way of knowing whether this goal is being maintained. Third, this is the key monthly production figure for NYCERS along with the number of loans issued each week. It should be the highlight of the executive director's monthly report to the trustees.

Note: There is no civil service title at NYCERS for chief operations officer. In fact the legal civil service title is deputy executive director and there is another person in that position. That person is legally responsible for the functions being assigned to the "COO". I suspect, however, that person is on her way out. Here we have the Dilbert Principle in full bloom.

Delays in Loan Processing at NYCERS

NYCERS recently posted the following notice on its web site:

September 4, 2012

In order to better serve our members and retirees, NYCERS is upgrading its technology system. As a result, some transactions may take longer to process. For example, loan applications will take at least 20 days to process as we implement these technology improvements. Thank you for your patience and cooperation.

Loan processing is the most high profile service at NYCERS. Over 50,000 members a year apply to NYCERS for a loan backed by the members' pension contributions. For that reason it is the most automated system at NYCERS. The traditional turn around time for a loan is one week. Applications received between any given Thursday and the following Wednesday are vouchered the next Thursday and the loan checks are mailed out on Friday. A Wednesday application is actually mailed out two days after it is filed.

Almost all loans have a processing fee. It currently is $40. The members are paying for this service and are entitled to quick and accurate service. When I left NYCERS in 2005, the fee was $15.

NYCERS has allegedly "upgraded its technology system". Instead of the one week turn around, it will now take three weeks. I suspect there is a very serious problem with the loan processing system. NYCERS does not give an understandable explanation or a projected solution to this problem.

The loan system I left in place in 2005 was working very well and was less expensive to run than this new "upgraded" system. It would appear that new technology should make things better. NYCERS, however, is quite comfortable claiming the opposite. The fact that NYCERS does not see this contradiction, is troubling.

I suspect we are not being told the real reason for the delay. By the way, what are the other transactions being delayed?

This is a service that the members are paying for out of their paychecks. Is NYCERS giving the members a discount on the fee because of poor service? I don't think so.

Why did the trustees and the executive director allow this problem to occur?