Press Release

State Acts Promptly to Safeguard Alaskans Against Potential Identity Theft

January 28, 2010

Juneau, Alaska - Attorney General Dan Sullivan announced today that the State of Alaska has reached a settlement with PricewaterhouseCoopers LLP to provide credit protection for about 77,000 former and current public employees whose names and confidential information were misplaced by the professional services firm.

The lost personal information is for the public employees and retirees who were participants in the Public Employees Retirement System and the Teachers Retirement System in 2003-2004.

"In this settlement, PricewaterhouseCoopers has accepted responsibility for this security failure," the attorney general said. "Most importantly, the firm has agreed to protect Alaskans by paying for identity theft protection and credit-monitoring, or a security freeze, for each of the 77,000 Alaskans who are potentially affected by this failure and by ensuring that Alaskans are reimbursed for losses that they might incur as a result of ID theft caused by this breach."

Sullivan also noted that other provisions of the settlement protect the state's finances by, for example, requiring PricewaterhouseCoopers to pay for up to $100,000 of the cost of notifying affected individuals.

"However, our overriding goal has been to make sure that our citizens who might be at risk are protected," he said. "We have achieved that."

The information on Alaska public employees and retirees originally was maintained by Mercer, the former longtime actuary for the state, who provided financial projections for the state's retirement systems. The state is suing Mercer in connection with the services it had previously provided the state.

As part of the discovery process in the lawsuit, a law firm representing the state requested Mercer's modeling and analysis of the state's future retirement obligations. This modeling information contained the personal data.

In the ongoing litigation, the law firm then turned that information over to the state's experts, PricewaterhouseCoopers, for use in evaluating Mercer's actuarial models. In early December, PricewaterhouseCoopers discovered that the information was missing.

The state was notified of PwC's security failure last week and obtained the data files containing specific information about the Alaskans involved Friday. As soon as officials in the Department of Law became aware of this breach, they began intensive discussions and negotiations with PricewaterhouseCoopers regarding efforts to locate the missing information and to put in place protections for Alaskans.

The Alaska Department of Administration is preparing notices that will go out to affected individuals with details on how to obtain the protections afforded through the settlement with PricewaterhouseCoopers. In the meantime, public employees and retirees who have concerns can contact the Department of Administration at 1-800-821-2251 during normal business hours.

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Department Media Contacts: Communications Director Patty Sullivan at patty.sullivan@alaska.gov or (907) 269-6368. Information Officer Sam Curtis at sam.curtis@alaska.gov or (907) 269-6269.