Processing Time for Calculating Annuities is Getting Worse: Is it OPM’s Increasing Workload?

Over the years, OPM (Office of Personnel Management) processing time for calculating annuities for new retirees has gotten progressively worse. Is it the increasing workload that is causing the problem? Here are the statistics.

Over the years, OPM (Office of Personnel Management) processing time for calculating annuities for new retirees has gotten progressively worse. It is scandalous. However, we all know what their excuse is: it is the increasing workload!  Right?

In an effort to stem the tide, OPM hired 40 new employees, who will be fully trained and coming online in the near future.  This is called “throwing money at the problem.” It works fine as long as you have an unlimited source of cash.

Employees working on annuity processing are working more overtime. Lots and lots of overtime. This is more “throwing money at the problem,” using an unlimited source of cash. Whatever happened to working smarter, not harder?

Another tactic that is sure to help is that OPM will start using agency estimates to figure interim annuities.  That is, currently, when employing agencies provide the paperwork on a new retirement, they include their estimate of what the annuity will be.  OPM will simply accept these estimates at face value, and use them to calculate the interim payments, which may stretch out for many months.

Interim payments

A third policy change was announced some months ago, but is not yet fully implemented.  This is increasing the amount of the interim annuity to a significantly higher percent of the estimate.  The initial percent has ranged from as much as 85% to well below 50%.  Nobody could understand this range, or why OPM was so stingy with the employee’s money.

Although increasing the percent for interim payments will do nothing to resolve the basic problem, it will be welcomed by new retirees who have had to struggle with sharply reduced payments.

Every year but one, since 2006, total retirements have dropped!  Retirements in 2010 were 25.6% fewer than 2006. Does this sound like an increasing workload to you?  I didn’t think so.

So, what is going on? Until now, I thought the answer must be in the increasing number of FERS retirements, which carry with them the complex, intricate FERS annuity supplement. But no, this cannot be the answer.  FERS retirements have actually declined, with the 2010 total being less than any year in the 5-year span.

Is it the economy? Yes, one can point at the economy — eligible employees have delayed retirements until TSP accounts have fully recovered, the job market is better, etc. This may well be true, but it still does not support the claims of a heavier workload, does it?  On the contrary, whatever the cause, shrinking numbers of retirements would seem to be a declining workload, right?  So, please do not blame the economy.

When Federal agencies want more money from Congress, they explain why they need it.  The explanation can be a change in mission, different circumstances, increased workload, etc.  Here is my question:  with a workload that declined every year for the past five years, how on earth did OPM justify their need for 40 more employees? Less work = more staff?  This is not a rhetorical question — I really want to know.  Don’t you?

The retirement statistics above are from OPM’s “Statistical Abstract” reports, provided to me by an employee of the OPM office of statistics.  They include nearly all Executive Department and many Congressional employees, but no intelligence agency or postal workers.  The latter is about 600,000+, and the number of intelligence employees, of course, is unknown.

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.