The State Worker

Chronicling civil-service life for California state workers

March 8, 2012
Column Extra: A little more about the CalPERS computer error

Thumbnail image for 100602 yolo county gavel.jpgWith just 400 to 450 words for our weekly State Worker column, some of what we learn each week never sees print. Column Extras give you the notes, the quotes and the observations that inform what's published.

Our State Worker column in today's Bee looks at how CalPERS is continuing to deal with nagging problems concerning its $500 million-plus computer system. This time the trouble touched about 4,200 retirees whose health insurance premiums were incorrectly withheld. Twice.

Here are some snippets of email correspondence this week between The State Worker and CalPERS spokesman Brad Pacheco that we've arranged in a Q&A format, and the text of a letter sent to affected members on Feb. 22 and Feb. 23 that explained the withholding mistakes and the fixes.

What brought the January error to CalPERS' attention? Was there some characteristic these 4,200 retirees shared that put them into this tiny pool of members affected by the withholding error?

This issue was brought to our attention when members contacted our Call Center reporting differences in their withholdings. We were not able to identify any unique characteristic in the population of 4,200 members affected but rather a system error that we fixed immediately.

How much money per member on average and in sum total are we talking about for each mistake?

It's important to note that the average amount for those affected is $50 so in most cases the impact will be a reduction of about $8 monthly over six months.

Why did CalPERS decide to reclaim the January money over six months instead of in a lump-sum?

The full health premium payment was automatically scheduled to be deducted from the same retiree warrants in March, to recover the monies due to CalPERS. However, we subsequently concluded that a double deduction in March may be a hardship for some of our members, and so we decided to refund the additional monies deducted for March and to instead deduct the premium (that was not deducted in January) over a six month period.

Has CalPERS run a cost analysis for what the two errors cost in terms of staff time and other resources?

We have not conducted an internal cost analysis related to the staff and system time. As we have discussed before, with a new system covering 1.6 million members some issues are to be expected. Our priority is to correct the issue for our members while ensuring we are complying with Government Code section 20160, which requires us to take action to correct errors and recover payments owed to CalPERS for benefits.

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Here's the letter CalPERS sent to those 4,200 retirees on Feb. 22 and Feb. 23:

Due to a computer error, your monthly health premium was not deducted as it should have been from your January retirement warrant (referred to as "Undeducted January Health Premium" for the purposes of this letter). Please rest assured that this error will not result in any disruption of your health coverage. To correct the error, our computer system deducted the Undeducted January Health Premium from your March retirement warrant in addition to your normal monthly health premium. Because we understand the inconvenience this double deduction may cause you, on February 27, 2012, we are mailing you a separate check (or direct deposit, according to your situation) for the amount of the Undeducted January Health Premium.

CalPERS is required by Government Code section 20160 to take action to correct errors made by CalPERS and to recover payments owed to CalPERS for benefits. Therefore, starting with your May 1 retirement warrant, your Undeducted January Health Premium will be collected in equal, incremental deductions over a six month period from May to October. These increments will be deducted in addition to your normal monthly health premium.


If you have information or documentation you believe contradicts the information provided above that you would like CalPERS to consider prior to finalizing this payment plan, please contact CalPERS no later than Monday, March 12, 2012, at:


California Public Employees' Retirement System
P.O. Box 720723
Sacramento, CA 94229-0723
Or
HealthPremium@CALPERS.CA.GOV

We sincerely apologize for any inconvenience this error may have caused. If you have any questions, please feel free to call us at 888 CalPERS (or 888-225-7377).

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About The State Worker

Jon Ortiz The Author

Jon Ortiz launched The State Worker blog and a companion column in 2008 to cover state government from the perspective of California government employees. Every day he filters the news through a single question: "What does this mean for state workers?" Join Ortiz for updates and debate on state pay, benefits, pensions, contracts and jobs. Contact him at (916) 321-1043 and at jortiz@sacbee.com.

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