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Benchmarking: DRS is cost-competitive but faces complexity and IT-project-driven costs
Summary
DRS staff told the LEOFF2 board CEM benchmarking places the agency near median on service and low on per-member cost ($91), but major IT projects drive a meaningful share of current spending; excluding major projects, cost per member falls to about $65.
DRS budget and performance staff presented CEM benchmarking results to the board on Nov. 19, noting that the Department of Retirement Systems compares favorably to peer pension administrators on cost per member and service measures but ranks high on system complexity.
"DRS is right, right near the median, right near the average," said Seth Miller, describing the service score tied to phone-response metrics. Marcus Erlander added that CEM places DRS in a tie for fourth for system complexity among their peer group. Miller told the board DRS's cost-per-member figure is about $91 and that if major project costs are removed, the figure drops to roughly $65 per member.
Presenters emphasized that many peer systems are also replacing aging IT systems, and that the pink portion of the CEM chart shows how much major projects add to per-member cost. Erlander said CEM breaks the differences into components including FTE cost, front-office staffing and other administrative areas. "Of that $42 [difference], we can say that $10 of that difference is a difference in overall FTE costs," Erlander said while walking through the breakdown.
Board members questioned how modernization affects long-term costs; presenters said the modernization (CorePAM) is expected to reduce manual work and, over time, improve training efficiency and member service. The board did not take formal action on the benchmarking presentation but asked staff to continue providing CEM updates and deeper metric breakdowns at future meetings.
