EBSA Press Release: Labor Department Warns Employee Benefit Plan Administrators about Year 2000 Software Problem and Calls for Immediate Action [02/09/1998]

Archived News Release — Caution: Information may be out of date.

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Today, Assistant Secretary of Pensions and Welfare Benefits Administration Olena Berg reminded employee benefit plan administrators and service providers of the need for action to address the looming Year 2000 software problem in order to protect workers' benefits as the century turns.

The problem -- computer software that recognizes years only by the last two digits -- is widespread and difficult to fix because datelines are buried throughout interlocking software applications and programs. Any computerized tasks requiring date-dependent computations or comparisons, such as computing interest, determining length of service or calculating retirement benefits, will be affected. The problem involves not only plan record-keeping systems, but also such systems as employer payrolls that interface with plans and whose performance is essential to plan operation.

"This is a cybernetic minefield that will take considerable time and effort to clear," warned Berg. "No ready technological solution has emerged, and experts agree it is unlikely that one will. Therefore, plan administrators and service providers cannot afford to gamble on a last-minute, technological fix. They must act now."

Berg stressed that plan administrators have a fiduciary responsibility to see that the Year 2000 problem is addressed. If they have not already done so, she noted, plan administrators should take steps immediately to identify the computer systems needed for plan operations, determine who is responsible for those systems and establish procedures for assuring that workable strategies are in place to address the Year 2000 problem.

In many instances, service providers to plans will have legal responsibility under existing licenses, agreements or maintenance contracts to participate in solving the problem. "In the end," Berg said, "it is the plan administrator's responsibility to be certain that their service providers are on top of the problem."

Archived News Release — Caution: Information may be out of date.