UK Regulators Warn Pensions to Check Data After Capita Breach

TPR, FCA and ICO are urging Capita clients to find out if any of their data has been stolen.



U.K. regulators are asking hundreds of pension plans and other firms to check to see if any of their data has been stolen following a security breach at pension administrator Capita plc.

Capita is one of the largest third-party administrators in the U.K, and, according to the firm, administers more than 450 pension plans with 4.3 million participants. The company announced in early April it had “experienced a cyber incident” on March 31 that mainly affected access to internal applications.

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After investigating the matter, the firm determined that the initial unauthorized access of data took place on or around March 22 and was interrupted by Capita on March 31. Although the company said the interruption significantly restricted the hack, it also said there was “some evidence of limited data exfiltration from the small proportion of affected server estate which might include customer, supplier or colleague data.” 

As a result of the breach, The Pensions Regulator, the U.K.’s watchdog for workplace pensions, sent a letter to hundreds of pension plan trustees to inform them of risk to their plan’s data. The Financial Conduct Authority and the Information Commissioner’s Office, which is the U.K.’s independent body for upholding information rights, are also urging companies to find out if any data has been stolen.

“We are continuing to closely monitor the incident at Capita,” said a TPR spokesperson, who declined to share the letter sent to pension trustees. “We are engaging directly with the company regarding their communications with schemes, and we are in discussions with other regulators, trustees of schemes and relevant organizations.”

The FCA said it continues to engage with Capita to understand the extent of any data compromise and impact on the firms to which they provide outsourced services. “We have also written to FCA-regulated firms that are clients of Capita to ensure they are fully engaged in understanding the extent of any data compromise,” the FCA said.

The ICO released a statement that other affected organizations “should also consider their position and report data breaches where necessary.”

The ICO said companies must notify it within 72 hours of becoming aware of a personal data breach, unless it does not pose a risk to people’s rights and freedoms. It also cautioned that if a firm decides a breach does not need to be reported, “they should keep their own record of it and be able to explain why it wasn’t reported, if necessary.”

Related Stories:

SEC Settles Charges with Firm Over Failing to Report Hacking Attempts

Texas ERS Hacker Gets 8 Years in Prison

Your Hacking Risk: What You Don’t Know Really Can Hurt You

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Illinois Nears Completion of Statewide Police Pension Consolidation

IPOPIF CIO Kent Custer reported that 324 of 357 pension funds have consolidated, totaling $9.1 billion.



The nearly consolidated Illinois Police Officers’ Pension Investment Fund has moved into its new headquarters in downtown Peoria. The pension fund marked the occasion with an April 13 open house that included members of Peoria City Council welcoming the IPOPIF to the city.

 

In 2019, the Illinois General Assembly passed a bill that allowed for the consolidation of 650 police and firefighter pensions into two statewide funds for investment purposes—one for police and one for firefighters. The move was aimed at improving the financial stability of the pension funds and at easing pressure on local governments to raise taxes to fund those pensions.

 

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However, in early 2021, 18 police and firefighter pension funds filed a lawsuit alleging that the consolidation violated the state constitution. In May 2022, an Illinois circuit court judge ruled against the complaint, and that ruling was upheld by an Illinois appeals court in February.

 

Almost four years after the bill was passed, the police pension consolidation is still not complete; however, “the team at IPOPIF is seeing light at the end of the transfer process tunnel,” according to the pension fund’s most recent newsletter. IPOPIF CIO Kent Custer reported at a recent board meeting that 324 of the 357 participating pension funds have fully transferred and reconciled pension assets worth approximately $9.1 billion.

At the meeting, Custer also discussed short- and long-term asset allocation changes being enacted by the pension fund. He said the initial short-term allocation was established to accommodate the IPOPIF transition and the subsequent buildout of diversified strategies, including private market investments. He noted that initial allocations to public equities were 8% underweight to long-term allocations, reflecting awareness of heightened valuation risk in late 2021.

 

Due to recent market corrections, Custer said he sees the opportunity and risk for equities to be in better balance. He said the rationale to underweight equities has weakened, and there is an increased risk of missing out on equity upside.

 

Custer also discussed other investment initiatives at the board meeting, including:

 

  • Seeking to hire two additional investment officers to work from the Peoria office, preferably with experience in the private markets sector. The board approved the hires during the meeting;
  • Evaluating small-cap equity and multi-asset-class credit for a potential search recommendation. The staff is currently gathering information and planning the evaluation; and
  • Gathering information in preparation for potential private market consultant search.

 

The Firefighters’ Pension Investment Fund announced in a February statement that “approximately 99% of local firefighter pension funds have successfully completed the transition process,” with assets totaling more than $8 billion.

 

Related Stories:

Court Rejects Legal Challenge to Illinois Pension Consolidation

Illinois Passes Police, Fire Pension Consolidation Bill

Illinois Group Wants Municipal Pension Consolidations

 

 

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