The Teacher Retirement System of Texas is part way through a state-side tour to visit other state pension funds that have implemented new technology systems, as it decides the best path for its own system review.
Deputy director of the TRS, Brian Guthrie and Amy Morgan, director of management information systems, have a much better idea of the scale – in time and money – of the system’s technology project.
They are about half way through a tour of nearly 10 state pension systems, visiting California, Michigan, and New York, and recently reported back to the board on their findings.
“We learned a lot about how to proceed and not to proceed on new technology,” Guthrie, who is responsible for directing and overseeing TRS operations and administration, says. “In many cases those systems have been through this, Michigan and New York state have, and they told us: ‘God Speed. You guys are in for it.’.”
In July 2009 TRS began The Next Generation project, which identified TRS’ strategic business needs that required a technology solution. Four themes emerged: improving external communications and service delivery; streamlining internal work processes for greater efficiency; modernising the technical environment to ensure proper skill sets were in place for the future.
As part of that, seven projects were identified to bring the fund in line with the main project aim. They are: financial systems upgrade; unified member module; eForms and self service; workflow automation; electronic records management; electronic communications with reporting entities; technical architect, business analyst and process improvement.
The tour of other state systems is a valiable insight into how best approach this massive project.
“We have a lot of hard work ahead of us, but we are well positioned, and are being very diligent in our planning,” Guthrie says.
Both Guthrie and Morgan concur they had an “overly simplistic view” of the steps involved in such a project.
“I thought we would do an internal review, have one or two external parties present to us, do some planning and choose an off the shelf product or customise,” Guthrie says. “It’s not that simple. It requires more planning and preparing yourself for the change.”
One of the biggest projects revealed by the tour, has been the importance of clean data. The other funds communicated to TRS that understanding the existing data, where it resides and the condition it is in is important before anything else is done.
“They showed us you need to clean the data before you implement a new system. The system enables you to see and manipulate the data, but it’s all about the data,” she says. “We were hoping we could get away without doing it, but everyone has been saying if you didn’t do it you should have.”
All the funds they visited advocated bringing all legacy data forward, so there are no short cuts.
“It doesn’t matter what shiny system you use if you’re putting garbage in. We didn’t estimate the scale of this,” Guthrie says.
This issue, the TRS executives discovered, caused some of the pension systems they have visited to go over budget and their time frames. They estimate this alone could take 18 months and up to $1 million.
But with the overhaul comes benefits. New York State, for example, now has a new system that allows for the collection of information from members and non members.
“We don’t collect information about part time workers who aren’t part of our system. New York State is collecting it and anticipating they will become full time teachers and be part of the system,” Guthrie says.
TRS also has plans to visit San Diego, Arizona, Iowa, Louisiana and Kansas.
“There are systems that have done it in different ways and there are a good cross section of experiences to draw from,” he says.
“We haven’t found out anything yet to say we can’t do it, there are just a few detours along the way. We haven’t got in the car and started driving yet, but we are making sure our itinerary is ok and we have our map.”