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The accounting firm PricewaterhouseCoopers LLC. is responsible for the security breach.
Attorney General Dan Sullivan says the company has known about the breach since early December, but just informed state officials days ago.
"Let's just say when I heard about it, and they originally knew about it, I wasn't- we weren't pleased," Sullivan says. "And the initial phone call from me to PricewaterhouseCoopers wasn't very pleasant."
With the large volume of possible identity theft victims, the state felt making this announcement was the quickest way to distribute the information.
"We wanted to get notice out to affected individuals as soon as we could, which from our perspective is really as much of a notice event as it is a press event," Sullivan says.
The lawyers hired by the state to handle pending litigation against the state's former retirement investment company, Mercer, hired PricewaterhouseCoopers as subcontractors to study Mercer's statistics.
That was in early December, when they lost the names, birth dates, and social security numbers of any public employee, teacher or retiree who worked for the state prior to 2005. PricewaterhouseCoopers did not inform the state until a few days ago.
With so many
"Paying for identity theft protection or a security freeze for each of the 77,000 Alaskans who might be affected by this," Sullivan says. "And by also reimbursing Alaskans for any losses they may incur as a result of identity theft that was caused by this breach.
If all Alaskans need the protection, Sullivan says the settlement could be worth tens of millions of dollars. However, the attorney general says he hopes that does not happen because that would mean there had been many identity theft victims.
In a statement PricewaterhouseCoopers General Counsel Charles Gerdts says, ""PricewaterhouseCoopers LLP has entered into an agreement with the state of Alaska that provides protective safeguards for those individuals whose information was lost. The firm regrets that the information was misplaced while under our control, and has made a significant commitment in reaching this resolution expeditiously. "
Click here if you are a victim and need more information.
State Press Release
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.
To contact the Newsroom, call 907-274-1111.
