US public pensions failing on operational risk
Outdated systems and lax controls mean it may only be a matter of time before a US public sector pension plan experiences a major operational risk failure
It sounds like an operational risk manager's worst nightmare.
As recently as 2003, the State Employees' Retirement System of Illinois was printing paper cheques to transfer funds between the state treasury and the bank accounts used to pay retirement benefits. At one point, the plan's accountant had paper cheques totalling almost $1.7 billion on his desk.
"We had a batch of seventeen $99 million cheques, because the system couldn't generate anything higher than that," says Tim Blair, director of
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