The Public Employees’ and Teachers’ retirement funds created Indiana Pension Systems Inc., to manage their recordkeeping computer systems, the Indianapolis Star reported. The two funds also decided to end relations with their current technology provider.
“Innovation like this has its risks. You’re never going to be 100% foolproof. But we think the benefits far outweigh the risks,” said Craig Hartzer, executive director of the Public Employees’ Retirement Fund.
Two public agencies going into private business together is a novel idea for the state — an initiative approved by each fund’s board of trustees and the office of Governor Joe Kernan. If this works, pension officials say, they may try to sell their pension computer system to other states or other funds.
In 1999, the funds hired Michigan-based Covansys to build and manage their recordkeeping systems. Fed up with an unreliable computer system that caused delays and errors for pensioners, the two funds agreed in March to pay Covansys $3 million to settle up its charges end ditch the contract.
Hartzer said forming a new company was the best option. It’s easier for private companies to hire and retain quality information technology staff at better salaries. The two funds don’t need two separate computer staffs — and this deal formalizes their working relationship. When there are computer problems, the technology help is in the same city, provided by a company devoted entirely to the pension funds, officials asserted.
Officials from both funds pledge that this will be an open venture – by being subject to audit by the State Board of Accounts, making sure that its records are public and its meetings are conducted in open, and adhering to a strict ethics policy the company already has adopted. Background checks on employees have been done, and a personnel handbook has been adopted.
The new technology firm governed by a five-member board that’s appointed by the boards of trustees of each fund. The company’s board hires a chief executive officer to run it. For the time being, that’s William Christopher, who isn’t being paid for his company duties, and is also director of the Teachers’ Retirement Fund.
Together, the funds have $15 billion in assets money for more than 300,000 retirees and beneficiaries.