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Interim payments rise for nearly one-third of recent retirees

Jan. 17, 2011 - 06:00AM   |  
By STEPHEN LOSEY   |   Comments
Office of Personnel Management director John Berry pledged in October to speed up the annuity check process.
Office of Personnel Management director John Berry pledged in October to speed up the annuity check process. (Chris Maddaloni / Staff file photo)

The Office of Personnel Management said Jan. 6 it has increased interim payments to almost one-third of recent retirees awaiting their full pensions.

About 36,000 recent retirees are now receiving interim annuities which are sometimes as low as half of what they are owed for months while OPM tries to calculate the correct amount.

After http://www.federaltimes.com/article/20101018/BENEFITS02/10180301/1047/BENEFITS02">a Federal Times story in October detailed the problems many retirees face getting their complete pensions, OPM Director John Berry pledged to maximize interim annuities as much as possible by the end of December to ease the burden on them.

Bill Zielinski, OPM's associate director of retirement and benefits, said in an interview with Federal Times that OPM last month increased interim payments for 29 percent of recent retirees by 5 percent on average.

"There's a lot of factors that go into that final payment, like survivor annuities and life insurance selection … and if someone has a court order" due to a divorce, Zielinski said. "We've been going through and looking through those [factors] to see where we can increase the amount" paid to retirees.

Zielinski also said OPM is working on additional changes that will bump up some U.S. Postal Service retirees' interim pensions by 5 percent, and some Defense Department retirees' interim pensions by 3 percent. OPM will shrink the amount it takes out of interim pensions for life insurance to increase the Defense annuities, he said.

Berry had pledged to hire 40 new employees to help calculate annuities and further shrink the backlog, and said in November he was waiting for Congress to approve a 2011 budget with funding for those new hires. But the government will operate at 2010 levels under a continuing resolution until March, and OPM has not yet received extra funding.

Zielinski said OPM has decided to move forward with the hires anyway. OPM has delayed some expenditures and moved money around from other parts of the budget to pay for those hires. Zielinski said he wasn't sure OPM would come up with enough money to hire all 40, but said he hopes to come close.

"This is such a critical need," Zielinski said. "Our ability to [shrink the backlog] depends on bringing them on board."

OPM's analysts are working overtime in some cases as much as 10 hours per week to process annuities, Zielinski said.

OPM has already cut the backlog of cases, which was 38,000 in October, by 2,000, he said.

OPM also temporarily transferred 40 workers to process annuity claims in October. Those additional staff will be working on annuities indefinitely, Zielinski said.

But OPM is expecting in the first three months of 2011 to receive a wave of another 33,000 federal retirements, which will further burden the agency's claims processing. OPM expects a total of 100,000 feds to retire this year.

OPM has created focus groups with union leaders and the Labor Department to find ways to speed up the process and eliminate logjams in file transfers, Zielinski said.

More coverage

http://www.federaltimes.com/article/20101108/BENEFITS02/11080302">OPM will stop shorting retirees' early payments (Nov. 8)

http://www.federaltimes.com/article/20101103/BENEFITS02/11030304/">OPM to boost interim annuities for new retirees (Nov. 3)

http://www.federaltimes.com/article/20101020/BENEFITS02/10200304/1047/BENEFITS02">OPM director pledges to speed up annuity payments (Oct. 20)

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