Project: Pension administration system

Jurisdiction: Kansas

Agency: Public Employees Retirement System

Vendor: Roseville, Minn.-based Sagitec Solutions

Date core system completed: January 2007

Total system cost: $8 million

When an agency is responsible for the retirement benefit records of nearly 800,000 current and former state and local government employees, it cannot depend on a 40-year-old computer system to manage that information. That was one of John Oliver’s first discoveries when he became CIO for the Kansas Public Employees Retirement System (KPERS) in 2001. “The original system had its origins in KPERS’s origins in 1962. It had been revised and modified over the years, but it was basically very out of date,” he says. “We get a lot of calls from members, and looking up information took an inordinate amount of time.”

The agency needed a new system that would more efficiently manage employee and retiree pension benefits, including tracking employee contributions and calculating monthly benefit payments for retirees. In fall 2004, KPERS contracted with Roseville, Minn.-based Sagitec Solutions to implement a Web-based pension administration system, including pulling data from the old system into a new database.

By January 2007, the core Web-based system was active. It connects to the state’s accounting system to disburse pension benefits, and it is linked to a document management system so paper documents that have been scanned and saved electronically can be viewed along with employee records.

The 1,500 active employers — including the state, all school districts, many police and fire departments, and many cities and counties — that previously had to report beneficiary changes or reconcile employee contributions using paper forms or spreadsheets, now can send the information directly to the KPERS database through an interactive Web portal. Soon, KPERS members will be able to access the information through the Web, but for now, they can call KPERS, and staff typically can find the answers to their questions immediately. “A large percentage are handled on that first contact,” Oliver says.

KPERS now has a system that can adapt easily to new employee benefits rules passed periodically by the state legislature. This year, for example, the state approved a new pension plan with different vesting and contribution rules for employees hired after July 1, 2009. As a result, KPERS will need to adjust its benefits calculations for new employees. Oliver expects that change to be much more manageable with the new software. “We’re going to be able to implement that at a comparatively low cost and with very few changes to the system because of its flexibility,” he says.