Back to the Future: OPM and the Federal Employee Retirement Tsunami

By on January 23, 2012 in News, Retirement

Imagine, if you will, working for Uncle Sam in the 1940’s. World War II is coming to an end. The troops are coming home. Federal employees who worked during the war years may be retiring or leaving government. What would an agency do to keep up with the backlog of paperwork? Computers as we know them did not exist. Paper, pencils, and clerks kept the paper moving.

So, essentially, an agency would do the same thing that the government would have done in the 1920’s or 1930’s. Hire more people. That was necessary to get the work out the door. It also isn’t a bad deal for agency employees. If your agency hired more people, chances are the supervisor and others would get promoted. More people = more important work and a higher grade and a higher salary.

The federal government is now changing again. A lot of new employees were hired in the 1960’s and 1970’s. These people are now retiring. It isn’t a surprise. OPM predicted a “retirement tsunami” back in 2006. In an open forum, featuring the  “top thinkers and doers from the federal sector’s personnel policy and program arenas” OPM announced “Taking the Leap: Innovation and Results for a New Public Service.”  The message from OPM: “new programs—and better ways of thinking—are required now to solve the (retirement) problem.”

Unfortunately, after “taking the leap,” the bottom was filled with rocks and the agency efforts crashed. Here is a short summary of what has happened and how OPM now intends to address the problem it first identified in 2006.

OPM was fortunate in some ways. The tsunami that was predicted to start in 2008 didn’t happen. It has had several more years to plan for the deluge.

OPM and Handling the Retirement Tsunami 

The retirement flood has now started.

Back in 2008, OPM announced “with great pleasure,” the introduction of the RetireEZ computer program. The OPM director at that time wrote: “This means you will receive your full annuity at the first payment, rather than after a period of reduced interim payments—eliminating a practice that has disadvantaged new retirees and been a barrier to our ability to achieve the highest level of customer service. This modernization moves Federal agencies from a labor-intensive, paper-based process to a modern, electronic system that contains all the Federal and military service records needed to compute the annuities of Federal employees.”

That sounded great. Unfortunately, the “great pleasure” announced by the OPM public relations person did not survive subsequent events.

Canceling the RetireEZ Project 

Two years, and a few million dollars later, OPM announced it was shutting down work by the contractor on “the agency’s retirement systems modernization project, after the contractor allegedly failed to deliver critical pieces of the system on time.”  OPM announced that it would have to decide the future of the RetireEZ program. The program was eventually cancelled.

The agency then announced it would proceed to upgrade the system using its own personnel. OPM announced in 2008: “The 10-year, $290 million contract was cancelled due to Hewitt’s failure to deliver a functioning retirement calculation engine in support of RetireEZ. The termination takes effect immediately. No work under the contract had been performed since OPM issued a stop-work order in May 2008. Additional elements of the overall RetireEZ program, including the process improvement element and data conversion, are unaffected by this action and progress continues to be made in both areas.”

Spring forward to 2011 and 2012. How is it going for federal employees who are retiring? Are they getting their retirement payments on time? Did the progress the agency was making pan out for federal retirees?

Apparently, it isn’t going well.

According to the current OPM director John Berry in testifying before a Congressional committee on November 15, 2011, the agency 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.

The Solution? Hire More People and Upgrade Technology 

So, what is the agency going to do?

It is going back to the future. In fact, a federal employee who worked on the federal retirement program 50 or more years ago may feel right at home even though retirement process is more complex and probably few if any typewriters but lots of people using paper and pens.

OPM is going to hire more people to do the work to solve the problem. In a blistering critique of OPM’s performance in this area,  one columnist wrote in December: “Nevermind that OPM has already more than doubled the size of its workforce over the past decade through the controversial practice of intragovernmental funds transfers….It’s what Washington does best: throw more money and people at a problem that simply can’t be solved that way.”

OPM now states: “It is our goal to eliminate the current backlog in 18 months so that 90 percent of retirees will receive their full annuity payments within 60 days of retirement by July 2013.”

In its new plan for fixing the problem a few years after it was identified, here is how the agency summarizes its new approach:

I. People

  • Bring “all hands on deck” to add claims production capacity immediately
  • Hire 56 new Legal Administrative Specialists (LAS)
  • Hire 20 new Customer Service Specialists (CSS)

II. Productivity and Process Improvement

  • Establish higher production standards and consider production bonuses
  • Expand work hours and effective use of overtime
  • Complete Lean/Six-Sigma review of the claims process
  • Ensure LAS have complete cases and more time to process claims

III. Partnering with Agencies


  • Improve accuracy and completeness of incoming claims
  • Involve Chief Human Capital Officers
  • Provide more frequent feedback to agencies on claims deficiencies

IV. Partial, Progressive Information Technology (IT) Improvements

  • Pursue long-term data flow strategy
  • Explore short-term strategy to leverage work agencies do now
  • Review and upgrade systems used by LAS

We knew the work was coming; we knew how much work it would be in order to process the paperwork; the government spent millions on a program that apparently did not work and now, about six years after the agency announced it was aware of and preparing for the paperwork deluge, the federal retirees who are waiting for months to get their retirement payments are the ones suffering the immediate brunt of this bureaucratic disaster.

© 2016 Ralph R. Smith. All rights reserved. This article may not be reproduced without express written consent from Ralph R. Smith.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources.

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  1. Ole Time Vet says:

    Look folks, those of us that have been around the government for a few decades, how many time will we have to provide our name, rank, ssn, dob for it to be stored in one more great computer system that someone can figure out how to push the button and have all this data print out? Send it to the retiree for review, make corrections and return for final processing. By the way this can all be done electronically. Will this eliminate jobs. . .I think not. . someone would still need to monitor, update & maintain “the” system? The other problem is trust. . Government Agencies do not trust enough to release all this data without some control.
    enigma1083: retirement is what people have been setting aside. . .you shouldn’t have to wait 6 months to get it. . !

  2. enigma1083 says:

    In my opinion if you don’t have enough money set aside to sustain you comfortably for at least 6 months., perhaps you should consider postponing your retirement until you do.

  3. jclark says:

    Another article says OPM will lay off 356 because of less work. Instead of hiring new people to do retirement packages take this group and move them over to do this job. They are OPM types so they should be easy to train on how to complete a retirement package. Should be able to whittle this down in about a year and get everything back on track.

  4. Happily retired in Idaho says:

    Retired on the 29th of December 2012, received my first check the second week of February and received my makeup check on May 17 and began receiving my full annuity in June.

  5. Kcgirl84 says:

    Nine months and counting for a full check.  It’s like having a baby, only longer.  How anyone is supposed to survive on “interim” payments is beyond comprehension.  Fortunately,  I had several weeks of annual leave and I had a small rainy day fund.  The wait  has turned into a deluge.  I read there are currently over 50,000 retirement applications pending and OPM is processing between 7 and 8 thousand per month.  At that rate there is a 7 month backlog and they receive between 7 and 8 thousand new applications each month.  at that rate, they will never catch up.  It’s a disgrace.  I don’t see congressional outrage about that, but when it comes to freezing salaries, increasing federal employee contributions to their retirement, and general bashing of the federal workforce, some members of Congress are right there.  For the general public’s information, federal employees must contribute to their retirement in order to receive matching contributions, health insurance have been increasing an average of 8-15% per year.  There is no free ride.      

  6. Mae McGee from Chicago IL says:

    Ater working for the Federal  Government over 42 years, I retired on December 31, 2011. I still have not received my full pension. I think It is a  shame.(7/13/2012). I can not even get a status report when I inquired. Somebody help me and others!

  7. Frank Gonzalez says:

    Here is a possible tentative solution which can be resolved with electronic transfer of retirement funds:
    I will explain: The backload of work is in OPM not the releasing facility from where the emloyee is retiring.
    This workload is because the releasing facility need to submit a final package of information to a designated
    processing center for a final review of the retirement entitlement. Here they compute medical plan deduction,
    life insurance deductions, tax witholding, etc. in order to reach the final amount of the retiree’s check. If you multiply the number of retiree’s by the number of releasing facilities, you come up with a significant backload of work. Here is my recommendation: I would continue paying the retiree from the releasing facility salary appropriation at a rate of 75% of what his monthly check would be; then have OPM transfer the funds to the releasing facility salary appropriation on a monthly basis. The remaining 25% would be OPM marging for final adjustment for the resons aforementioned. I believe this tentative SOP would aleive the retiree economic
    burden, allow OPM to scrutinize the retiree’s package and come up with the final figure of his monthly check.
    Once the final figure as been obtained, then OPM would pay the retiree from their own appropriation.

  8. Roy0384 says:

    Yeah, well….  I retired 12/31/2011.  It’s now mid-July.  Only a call to my Senator’s office right after the 4th of July to see if they could ‘prod things’ a little, did I get an answer that my retirement annuity had been finalized within a week after my initial call.  Coincidence?  Maybe.  Or more likely the “squeaky wheel” got the attention.

    The BAD NEWS is a co-worker who retired in Feb of 2011 had to wait 6 months until her annuity had been finalized as well.  So, do we really see this abysmal situation getting better over time? Not really, nor do I expect zero interest rates to improve our economy over time. Never trust the BS
    J. P. Frogbottom

  9. G Walton says:

    IRS retired just shy of 1 year ago.  Still on interium payments.  Typical bureaucratic BS.  Director Berry needs to go.  What a disaster.

  10. Pgagalvin says:

    I retired 6/30/2011 & still receiving only an interim payment. My situation is very simple as FERs employee I worked 19 plus years without a break in service. Simple yes! When I spoke with a customer service agent at OPM’, I asked what their intake assessment process was and was told OPM treats all cases as first in first out. Well from reading some previous comments in these articles that I’ ve read, some retirees have received their final payment amounts within a very short time e.g. 3-4 months. Certainly, they haven’t had to wait 8 months or longer.
    There doesn’t seem to be any initial evaluation process in place even to ensure the quoted rule/policy of first in – first out, or to separate the more simple from the complex type of cases, sorting and prioritizing as needed to expedite, etc.

  11. Maureen says:

    Why is it Social Security can pay their recipients an accurate payment within 2 weeks and the federal employee has to wait months for a  correct annuity???

    • Bruce says:

      Military retirement worked the same. I received my first full check the month after I retired from the Army. However, I still work for the gov and am not looking forward to the next retirement application!!

  12. Patiently Waiting says:

    I retired 31 Aug 2011 and am still waiting for mY full annuity.  That puts us right at six months now.  After calling OPM and listening to the customer service representative whine about being overworked and understaffed, I am thoroughly convinced they are in no hurry to get my annuity finalized.  The longer they drag their feet on this, the better their chances of getting more hires.  I could not get by with that in my job.  I would have been fired.  This is a sad state of affairs the way we are being treated after faithfully working our whole careers.  Maybe they should start at the top and start firing those who manage this system.

  13. DisabledFed says:

    Hope that you do not have to retire on disability. That is something you do not plan for…but should. I was disability retired on 25 March 2011 and am still receiving interim payments as of today, 7 Feb 2012, with no end in sight. I went from $50k to $14K in the blink of a terrifying eye and I never saw it coming. What I was told I would receive and what I have been receiving in “interim payments” are so far apart and it has been a struggle to keep my head above water each month. I was not at fault for getting sick and becoming disabled yet every month I receive yet another “interim payment” it rubs salt further into the wound already raw. This needs to stop and stop NOW!

  14. eleanorwaiting says:

    Good Day,
    I have been waiting for the resolution on my claim since April 2011 with no end date in sight.  I have written to my congresswoman, the president, the director of OPM  and everyone else that I could think of.  What I see here is a failure on OPM’s part to take care of the retirees in a timely fashion.  OPM has put me in a financial hardship and my savings are almost gone just trying to make ends meed on their so called INTERIM payment that I  receive on a monthly basis.  My representative in Washington, won’t answer my calls or respond to my emails, I am at the end of my rope and don’t know what to go or to whom I should seek counsel from, can’t afford a lawyer.

    • HR Manager (Retired) says:

      Wow – your situation is the worst I’ve ever heard of in my almost 40 years in the HR business.  Some suggestions (my may have already tried these): 1)  visit, if you can, your old HR office to see if they can help and ask them if there was anything wrong or missing from your application; 2)  if you are a veteran contact one of your local Vet organizations; 3)  before hiring a lawyer at your expense contact your union, if you were a member, or one of the retiree organizations such as National Active
      and Retired Federal Employees (NARFE) as they maybe be able to help you free of charge; 4) go to your Congressional rep’s next town hall meeting and confront her – be polite but firm. Don’t forget to expand this to your Senators; 5)  contact one of your local TV stations to see if they want to do a story about your situation – be sure to have all the facts and dates readily available before you contact them.  Good luck.