Calif. Pension System's Computer Glitches Led to Coverage Problems

Problems with the rollout of a new computer system at the California Public Employees' Retirement System have led to delays in death benefit payments and generated erroneous letters telling some members that their health insurance coverage has been revoked, the Sacramento Bee reports.

Officials do not know how many members have been affected.

Details of the Issue

CalPERS launched its new benefit-tracking system, called "my | CalPERS," in September with assistance from Accenture, a private technology company.

The new system consolidated about 50 systems into one. The new system cost about $507 million, and it was implemented about two years behind schedule. Since September, programmers have made 1,340 changes or improvements to the system and carried out 16 systemwide upgrades.

The changeover has increased the time it takes CalPERS to process death benefits from about 45 days to up to 90 days.

According to Brad Pacheco -- a CalPERS spokesperson -- delays in changing a payout from a pension benefit to an initial death benefit could affect how health insurance premiums are deducted from the payment. If a payment is missed, insurers could issue a cancellation letter, Pacheco said.

CalPERS Response

CalPERS officials said that no members will have their medical coverage taken away and that the company is working to pay out death benefits as quickly as possible.

Pacheco added that CalPERS is working with its health insurance vendors including Blue Shield of California and Kaiser Permanente to suspend sending cancellation notices.

CalPERS member services staff said last week that they plan to have the issue resolved in 60 to 90 days. They added that affected members likely would have to pay for medical expenses out of pocket and be reimbursed later (Ortiz, Sacramento Bee, 11/24).

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