The current delays in retirement processing are unacceptable and eliminating the current backlog is my highest priority for 2012. 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.
– John Berry, OPM Director, January 17, 2012
Strategic Plan for Retirement Services
For years, the Office of Personnel Management (OPM) has had a serious, intractable problem with unacceptably slow processing of annuity applications for retiring Federal employees. By 2012, the burgeoning backlog of retirement applications in the OPM inventory had grown to the point where Congressional hearings were held.
Director Berry was asked whether it was true his staff took an average of three hours to do one annuity calculation. When he responded “yes,” he was asked what was the problem? His answer: “I don’t know.” Incredibly, the questioner then dropped the line of questioning, failing to ask Mr. Berry to find out the cause of the problem.
To help reduce the backlog, Congress threw money at the problem:
- Augmented, voluntary overtime
- Mandatory overtime (94,000 hours in 2012!)
- Hiring of 40 additional “legal administrative specialists”
- Hiring of 22 temporary customer service specialists.
Did the above actions help? As of October 2014 there were 14,137 annuity claims pending and by August 2016 the total was 16,334.
So, what is the root problem? The root problem is the calculation of the FERS annuity supplement.
Under the best of circumstances, an OPM specialist can complete just three supplement calculations in one day, while the same person can easily do 8-10 CSRS annuity claims daily.
The annuity supplement manual calculation is quite intricate and lengthy. In fact, when Reg Jones, former head of Retirement and Insurance Services at OPM, was asked for the formula used to calculate the supplement, he responded “The formula for calculating the SRS (special retirement supplement) is too complicated for mere mortals to execute.” – Ask the Experts, federaltimes.com, Feb 17, 2005
Typically, there are 29-35 data elements required for the calculation: year of birth, first full year of FERS service, number of years of FERS service, and salaries for all full years of FERS service. It takes 3 minutes or so to enter this information.
The status quo at OPM is to “fast track” annuity claims not needing calculation of the annuity supplement. This “cherry picking” causes the under-60-day report to look better, at the expense of the long-suffering retirees qualifying for the supplement. So, assume all the 16,334 pending claims need to have the supplement calculated, and calc time is 5 minutes instead of 3; 16,334 * 5 = 81,670 minutes, or 1,361 hours, or 34 weeks.
The 34 weeks is with only one person working the claims. The current staff of 150+ Legal Administrative Specialists will be about 150 times faster.
Being number and arithmetic intensive, the calculation of the annuity supplement is ideal for an automated approach. Specifically, what is needed is a dedicated computer program, custom designed for the demanding calculations.
By way of example, the author has developed software that does the annuity calculations, and this is an example of the reports it produces. You can request a free copy by emailing: email@example.com.
There may be other solutions, but the broader point is that the process can be automated to quickly eliminate the backlog of retirement claims.
It does not appear unreasonable to believe that a short time after automation, the current inventory/backlog will be essentially gone. OPM’s chronic, severe backlog problem can be readily fixed, with considerable benefit to mission accomplishment.