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Retirement division paid $1.3 million after eReporting outage; one employer still catching up
Summary
Division of Retirement and Benefits told lawmakers a November 2024 eReporting outage caused delayed employer contributions; a manual process and partner Empower returned $1.3 million to member accounts (PERS $692,000; TERS $552,000; SBS $64,000). The division said members could challenge calculations and one employer remains outstanding.
The Alaska Division of Retirement and Benefits told the House Finance Committee on Feb. 3 that an employer-reporting outage following a November 4, 2024 attempted intrusion required a manual backlog process and resulted in the division making members whole to satisfy federal rules.
Director Cathy Lee said the division moved systems into the state cloud after a cybersecurity investigation determined there was no breach but discovered the employer reporting tool was incompatible with the cloud. Employer reporting was interrupted from about Nov. 4 to Feb. 6, during which the division used a laborious manual process to process contributions. E-reporting returned to service on April 9 and the division processed posted back contributions in date order.
Empower, the division’s record keeper, used the U.S. Department of Labor voluntary fiduciary correction calculator and posted computed gains or losses to participant accounts. Lee said the division paid $1.3 million total to correct accounts: PERS $692,000; TERS $552,000; SBS $64,000. As of the Feb. 3 meeting, all employers had caught up except one, and the remaining balance will be returned to the state on 06/30/2026 if unresolved.
Notifying members and appeals
Committee members pressed the division on member notice and whether employees could challenge Empower’s calculations. Lee said the division notified employers and asked them to inform employees, published notices on the DRB website, and sent letters. Members who disagreed with their calculated amounts could request Empower’s calculation; Empower would provide the underlying Department of Labor calculator output on request so members could challenge the result.
Members kept account access and elections
Lee and CFO Christopher Noble told the committee that members retained portal access during the outage and could make election changes; Empower’s correction methodology accounted for election changes by calculating owed amounts up to the point of change and then from that point until processing was complete.
What lawmakers asked for next
Lawmakers expressed concern about employee confidence after the incident and requested follow-up on communications and employer outreach to strengthen trust. The division said Empower and department representatives engaged directly with employers and employees and that Empower provided resources at no charge to support the remediation.
Committee adjourned and requested additional data and future presentations.
