Division of Retirement and Benefits says 2024 eReporting outage was a thwarted intrusion; $2.7M appropriation funded make‑whole payments

Christopher Novell described an incident beginning Nov. 4, 2024, when the Division of Retirement and Benefits’ network showed "unusual activity" and the Office of Information Technology suspended access while investigators responded. Novell told the committee the division concluded no member data were accessed and no money was stolen.

Because the suspension interrupted the division’s eReporting payroll submission system, employers and the division implemented a manual fallback: employers sent spreadsheets to the division’s active payroll team, which entered and reconciled payroll reports. The division staged employer uploads when the eReporting system was restored on Feb. 6, 2025 to avoid overwhelming the system.

Following discussions with the Department of Law, Office of Management and Budget and the legislature, an appropriation of $2,700,000 was requested and approved to compensate participants for lost investment earnings while reports and calculations were being completed. Novell said make‑whole payments totaling $1,300,000 were posted to 23,996 participant accounts between June 17 and July 21, 2025; the remaining balance (~$1,400,000) was returned to the state.

Novell described the calculation method used (the U.S. Department of Labor’s Voluntary Fiduciary Correction Program calculator, applied by the division’s recordkeeper) and said payment amounts ranged from less than a penny to $368.90, with an average around $54.58 depending on calculation method. He told the committee 99% of employers had submitted the reports by the May 30, 2025 deadline and that the division completed reconciliation and loss‑of‑earnings calculations thereafter.

Senator Keel (and other members) praised the division and IT for locking down the system and preventing theft. Novell acknowledged the manual workload and said the division will provide updated reports to the committee on employers that remain in arrears or have catch‑up arrangements. No participants were held responsible for lost earnings as a result of the outage, per the agreement between the division, Dept. of Law, OMB and the legislature.

The committee thanked division staff for their work and closed the session; no legislative action was taken at the Feb. 9 hearing.