Utah Retirement Systems tells Legislature backlog in initial retirement payments stemmed from IT upgrade and staff turnover; fixes underway

Utah Retirement Systems told a Utah Legislature interim committee that delays in processing initial retirement payments this year resulted from a technology upgrade that drew subject-matter staff away from day-to-day processing and from higher-than-expected staff turnover.

The explanation came during a presentation by Dan Anderson, executive director of Utah Retirement Systems, who told the committee, “we, due to a confluence of issues … have fallen below the standards that we expect of ourselves and that our members and our stakeholders expect of us. And we own that.”

Anderson said the retirement application process remains largely manual because URS must assemble decades of personnel and payroll records from multiple data sources. He described the current quality-control practice as one in which “three different retirement calculator employees will go through” a file to ensure accuracy, and said that manual work combined with the pension-administration IT upgrade and unanticipated turnover in management and staff produced a backlog during the early months of 2025.

The nut graf: URS said its short-term response reduced the backlog substantially and that a new pension administration system — already in late-stage implementation — should shorten processing times further. The department described immediate steps taken to restore service and outlined a timeline for broader improvements.

Anderson told the committee URS enacted several short-term fixes as soon as the problem was identified: cross-training staff from other parts of the retirement division, reassigning a subject-matter expert from the IT project back to benefit calculations, hiring new staff and bringing back a retired former employee to help, directly communicating with members affected by the delay, and — in some urgent cases — processing off-cycle payments outside the usual monthly batch payroll. “We really tried to once we became aware of the situation, really tried to put some immediate short term fixes in place,” Anderson said.

Status and timeline

Anderson said URS maintains a benchmark that first retirement payments should be processed within 90 days and that the agency has returned close to its long-term performance levels. He told lawmakers that at the peak of the backlog the office had more than 200 retirees waiting beyond the 90-day window, and that figure has fallen to a single case now pending only because of a pending domestic relations order filed in a divorce proceeding. Anderson said URS manages roughly 80,000 retirees and that, with the new administrative system and cleaned, centralized data, “virtually all of our retirements should be paid within the first 30 days” once migration completes — a goal he said could be met within about a year.

Statutory timing and planning

Anderson and members discussed statutory timing: under current law and practice a public employee may submit a final retirement application up to 90 days before their last day of employment, and URS can finalize an effective retirement date up to 90 days after termination. Anderson explained the 90-day window is the current standard but said URS will analyze whether earlier submission lanes or queueing can reduce the practical window to avoid an interruption in monthly income for retirees who plan in advance. Representative Walter asked whether URS could treat applications submitted at least 60 days before retirement differently so payments could begin on time; Anderson said URS would analyze the data and “be happy to do that analysis.”

Reasons for the backlog

Anderson summarized causes as: 1) a major IT upgrade that consumed subject-matter experts; 2) management- and staff-level turnover that reduced capacity more than expected; 3) the decision not to immediately backfill some positions for cost reasons; and 4) annual seasonal spikes in retirement applications that occur early in the year. Those factors together, he said, created an episodic operational shortfall rather than a long-term systemic failure.

Measures to reduce future risk

Anderson offered three lessons learned: build more robust downside scenario planning when shifting personnel to large IT projects; improve and formalize metric reporting to detect declines sooner; and complete the pension administration system migration to centralize decades of payroll and employment data. He said URS will retain the cross-trained staff and other short-term measures until the new system is fully operational. He also described plans to enhance internal performance monitoring so that similar problems are detected earlier.

Committee questions and follow-up

Committee members pressed for specifics about timing and customer experience. Senator Eskimia asked whether the 90-day statutory timeframe could be shortened by statute; Anderson said the change that will deliver the fastest improvement is technology, not a statutory amendment, and that “virtually all of the payments will be done within 30 days” once the new system is fully rolled out. Representative Walter emphasized the hardship for individuals and asked URS to analyze how often the theoretical 180-day window (90 days before retirement plus 90 days after) occurs in practice and then propose ways retirees who apply earlier could be guaranteed a seamless payment start date. Anderson agreed to perform that analysis.

What this means for members

Anderson said URS has been contacting members affected by the backlog and, when appropriate, issued one-off off-cycle checks to address urgent needs. He stressed the agency’s commitment to accuracy in final calculations and said the three-person verification step is labor intensive but important for avoiding payment errors. He closed by reiterating that URS has implemented short-term fixes and remains engaged to complete the data migration and system upgrades that should shorten processing times and improve customer experience.

Ending

The committee thanked URS staff for the briefing and asked for follow-up data on the timing analysis and on metrics tracking. Anderson said URS would return with more detailed metrics and analysis on early-application outcomes and the timeline for the administration system roll-out.