The Office of Personnel Management (OPM) announced that a new, fully digital retirement processing system is being rolled out governmentwide this summer.
OPM’s Acting Director Charles Ezell made the announcement in a memo sent to agency heads. He wrote:
The federal workforce deserves a retirement process that matches the demands of the 21st century. Legacy systems, with outdated technology and cumbersome procedures, have delayed retirements and frustrated employees who have dedicated their careers to public service. By harnessing modern technology and inter-agency collaboration, OPM has been working to deliver a retirement process that is fast, user-friendly, and responsive to the needs of our employees.
The new online retirement processing system launches in less than one month. Starting June 2, 2025, all new retirement applications started on that date or later must be submitted electronically. OPM said that for these and all future applications, any newly created paper retirement packages will not be accepted and will be returned to the agency for digital resubmission.
Additionally, effective July 15, 2025, OPM will facilitate retirement applications through its Online Retirement Application (ORA) and no longer accept paper submissions.
Starting June 2, 2025, all federal agencies served by the National Finance Center (NFC)
and the Interior Business Center (IBC) must submit retirement cases electronically via ORA. Training and onboarding assistance will be provided, and all agency HR staff must complete the training by June 2.
OPM said it will coordinate directly with payroll providers to ensure all agencies they service will have access to ORA in the near future.
Historical Significance of the New System
Some historical perspective shows just how astounding the pace at which this has been achieved is. In the early 2000s, for instance, OPM tried and failed to get a retirement processing modernization program developed known as the RetireEZ project. The Government Accountability Office (GAO) described it this way in a 2012 report:
In late 2001, retaining the name RSM, the agency embarked upon its third initiative to modernize the retirement process and examined the possibility of privately sourced technologies and tools. Toward this end, the agency determined that contracting was a viable alternative and, in 2006, awarded three contracts for the automation of the retirement process, to include the conversion of paper records to electronic files and consulting services to redesign its retirement operations.
In February 2008, OPM renamed the program RetireEZ and deployed an automated retirement processing system. However, by May 2008 the agency determined that the system was not working as expected and suspended system operation. In October 2008, after 5 months of attempting to address quality issues, the agency terminated the contract for the system. In November 2008, OPM began restructuring the program and reported that its efforts to modernize retirement processing would continue. However, after several years of trying to revitalize the program, the agency terminated the retirement system modernization in February 2011.
After scrapping it completely, OPM went back to processing retirement applications by hand using paper. That process has continued until today.
After the Department of Government Efficiency (DOGE) began its work, it spotlighted the antiquated nature of processing federal employees’ retirement applications. Elon Musk told reporters about the mine near Boyers, PA that houses massive amounts of paperwork which makes up federal employees’ retirement applications. The unusual and arcane process was one which drew the attention of DOGE as something that could and should be modernized.
Airbnb co-founder Joe Gebbia joined the DOGE team and took the lead on modernizing OPM’s retirement processing system. He told Fox News, “This will be an online digital process that will take just a few days at most… it’s an injustice to civil servants who are subjected to these processes.”
OPM announced in late February that it had successfully processed its first retirement application completely online and did so in less than a week. On May 2, Gebbia announced that 25 federal employees were retiring through a process conducted fully online.
Now, just five days later, OPM has begun rolling the system out to the federal government as a whole. So, in the span of a few months, DOGE and OPM’s Retirement Services team have apparently achieved what the agency failed to do over a span of about a decade with the RetireEZ program. Count me impressed.
Why This is Significant for Federal Employees
The manual, paper based process OPM has been using to process federal employees’ retirement applications is a slow one. According to the OPM Retirement Quick Guide, the current estimate as of April 2025 is that a federal employee who submits his retirement application now will have to wait 3-5 months to get his full annuity payment because that is how long the agency currently estimates it will take to fully process a retirement application.
The current system is also prone to errors. If there are any errors in a federal employee’s retirement application package, it causes further delays in the process.
Additionally, the current process depends on coordinated efforts between different stakeholders, namely federal employees, payroll offices and OPM. That is a lot of back and forth that can lead to additional delays.
OPM has this advice for federal employees in one of its frequently asked questions on retirement which helps put the process in some perspective:
You can help reduce delays in processing by submitting your application in advance and by making sure your Official Personnel Folder (OPF) is complete. If you submit your paperwork early, your personnel and payroll offices will be able to complete their action before your retirement date.
This process has created a backlog of retirement applications. As of the end of April, it was “only” 16,173 which is actually pretty good when you consider how high the backlog has been at times in the past. In 2012, for instance, it was routinely over 40,000 and topped 60,000 at the end of January that year. The bigger the backlog is, the longer the delays are likely to be for federal employees waiting to get their full annuity payments.
OPM’s “steady state goal” for the backlog of retirement claims is 13,000 which indicates that the agency doesn’t think it will ever be eliminated completely. The last time it was at or below that level was in 2015, although it did get close in late 2024 when it was reduced to 13,844 at the end of November. Presumably, the backlog of outstanding paper based retirement applications will be eliminated fairly quickly upon a successful rollout and full adoption of the online system.
Contrast the old system with the new online system that has been developed. If it works the way it has been described, processing time could go from months to seconds. A Fox News report from April 9 cited a White House official who described the artificial intelligence behind the new retirement processing system. According to the article, “…it could take less than one second to finalize a federal employee’s retirement.”
OPM is rolling out this new paperless retirement system governmentwide in less than a month, so presumably it is ready for prime time. If all goes well, this is likely to be a game changer for new federal retirees.
