Berry to Congress: Annuity Processing Backlog is Bad, Will Get Worse

By on November 26, 2011 in Current Events, Retirement with 95 Comments

Last week the news media carried stories about the Office of Personnel Management’s poor performance regarding annuity payments for new retirees.  It takes months before OPM finally decides on the correct amount, and in the interim they pay significantly less than they should pay, i.e., they reduce the amount of the projected annuity by about 20%, and they reduce the amount for the annuity supplement to $0.0.  This latter cut is substantial, because the supplement is usually in the range of $700 – $1,100 monthly, a considerable sum of money to lose for six, or more, months!

In testimony on November 15 before the house Subcommittee on the Federal Workforce, of the Oversight and Government Reform Committee, OPM director John Berry agreed with Chairman Dennis Ross his staff is able to complete only 3.5 retirement cases per day, per employee, and he agreed this was “unacceptable.”  Mr. Berry also stated he has no business plan for fixing this problem, and the backlog is getting worse.

Berry proposed increasing staffing by another 40 employees, which would be in addition to the 40 added last year.  Fortunately, he was told Congress would not approve this.  Despite the previously added workers, the backlog is actually getting worse!  What is going on?

(Note: the 3.5 cases completed per day per worker, consist of both CSRS and FERS.  The CSRS cases require less than one hour per calculation, with FERS computations needing more than three hours each.)

So, what is the real cause of the problem?

Retirees under age 62 and at or above the MRA qualify for the FERS annuity supplement.   Calculation of the supplement is quite lengthy and intricate.  With no software for this formidable process, OPM does it manually; consequently,  one FERS case involving the supplement typically takes more than three hours to complete. With the maturing of the FERS system, there are progressively more FERS retirements each year.  More FERS retirements means more supplements to calculate.

Is there a practical remedy?

Yes, there is. Use of well-designed, dedicated software, in lieu of manual methods, will do the job.  There are at least three software applications, available commercially, for doing the FERS annuity supplement,.  The firms that market these programs would love to have the opportunity to work with OPM to refine and upgrade their software to OPM’s needs and specifications.

The Office of Personnel Management needs to find, acquire, and use dedicated software for computing the FERS annuity supplement.  Cases that formerly took 3+ hours will then be finished in well under one hour, with a higher degree of accuracy.  The backlog will melt away, and stay away.  Problem solved.

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© 2016 Robert F. Benson. All rights reserved. This article may not be reproduced without express written consent from Robert F. Benson.

About the Author

Robert Benson served 35 years in various Federal agencies, as both a management analyst and IT specialist. He is a graduate of Northwestern University.

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