The Future of the Retirement Backlog

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By on February 21, 2019 in Retirement with 0 Comments

Two large vertical stacks of files and papers side by side depicting a massive backlog of work

OPM has largely addressed the retirement claims backlog by throwing more bodies and hours at the problem after abandoning unsuccessful attempts in previous years to automate the process.

~ Page 30, NARFE magazine, November 2015

The backlog of annuity cases waiting to be calculated for recent retirees has bedeviled OPM for years. In 2012, it became so bad Congress summoned the agency director to testify about the cause of the burgeoning backlog. Under oath and on camera, he stated he did not know the cause.

Congress did not question this, instead choosing to dump a truckload of money on the problem:

  • increased voluntary overtime
  • over 94,000 hours of mandatory overtime in 2012, per K. Zawodny, head of RS
  • hiring of 66 new Legal Administrative Specialists and 22 temporary Customer Service Specialists – this was in 2012, also
  • hiring of 40 new representatives in FY16, per page 5 of Agency Financial Report for FY 2016, “Reducing the Retirement Claims Inventory”

Alas, the problem has persisted. In February of 2018 the inventory backlog was 24,225, with the low for the year being 17,489, in April.

The backlog problem has been so bad for so long, it became necessary to invent a neologism: “steady state,” defined as 13,000 claims. This is the new normal. If they ever get the backlog down to 13,000 we will know everything is okay. Right? (The 13,000 retirees waiting for their full annuities may not agree.)

What is the root cause of the difficulty? Is there a way to fix it? When will the inventory backlog start decreasing, significantly?

In 2012, the OPM office of actuaries prepared a comprehensive projection of the populations of active and retired employees, and survivors, on the rolls annually through 2112. For FERS employees, the predictions (with number of deaths not shown) were:

Year Number of Retirees on the Rolls Increase from Previous Year Shift Over Previous Year
2013 477,145 N/A
2014 524,195 47,050
2015 570,164 45,969 blip
2016 621,168 51,004
2017 676,851 55,683
2018 736,815 59,964
2019 801,121 64,306
2020 868,498 67,377
2021 937,563 69,065
2022 1,007,439 69,876
2023 1,078,215 70,776 (peak)
2024 1,148,580 70,365
2025 1,212,989 64,409
2026 1,277,937 64,948 blip
2027 1,343,214 65,277 blip
2028 1,406,733 63,519
2029 1,467,956 61,223
2030 1,526,540 58,584
2031 1,582,138 55,598
2032 1,635,404 53,266

In 2043, the FERS active employee population peaks at 2,619,000. There will be 2,071,171 FERS retirees on the rolls in 2043. This is an increase of just 27,673 from the 2,043,498 in 2042.

Why do the annual increases of FERS retirees increase nearly every year till 2023 and then, even though the active FERS employee population continues growing, start dropping? The actuaries did not address this.

Root Cause

The root cause of the backlog problem lies not with CSRS or FERS annuities per se, but specifically with those FERS retirements that include the dreaded annuity supplement, for which most FERS retirees do qualify. (To qualify for the supplement, a retiree must be under 62. For the years 2009-13, the average age at FERS retirement was 60.3 years, per OPM.)

Even with a modicum of automated help, calculation of the FERS annuity supplement takes about three hours per case compared to less than one hour for a CSRS claim. The future offers fewer of the easy CSRS cases and correspondingly more of the hard, FERS-with-supplement cases.

Much of the above is speculative, certainly, but it appears the annual flow of new retirees will peak in 2023, after which for some reason the increases each year will gradually diminish. Maybe not. As noted above, the population of active FERS employees is projected to continue rising till 2043, when it will level off at 2,619,000, with a retiree population of 2,071,171.

In any case, it is quite clear something needs to be done other than simply throwing bodies and hours at the problem; this has been tried and failed, abysmally.

Please bear in mind determining the annuity supplement is all about numbers. These numbers are manipulated serially, in accordance with specific rules.

What is ideal for such a situation? Did you say computer? You are right.

Solution

Acquire and use a custom, dedicated computer program for full, accurate calculation of the annuity supplement in minutes rather than hours. Such a tool will turn the situation around, in dramatic fashion. The backlog will melt away in no time at all, never to return.

Will above solution call for a million dollar budget, dozens of meetings/briefings with white board or power point presentations, multi-page progress reports on a quarterly basis, and other signs of a bureaucracy run amok? No, it will not.

The solution will require one (yes, one) highly skilled programmer, assisted part time by one or two journeyman agency employees, and about 4 weeks, to develop a working model.

The model will be fine tuned and de-bugged, which will take perhaps two more weeks. Then it will go into limited production, for testing on actual claims. Finally, after no more than two months, total, it will be ready for use in full production. Yes, Virginia, this really can happen.

For more information on annuity supplement software, email Robert Benson at [email protected].

© 2019 Robert F. Benson. All rights reserved. This article may not be reproduced without express written consent from Robert F. Benson.

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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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