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OPM this month to issue quicker, more accurate annuity checks for new retirees

Jun. 6, 2011 - 02:23PM   |  
By STEPHEN LOSEY   |   Comments
Bill Zielinski is OPM's associate director of retirement services.
Bill Zielinski is OPM's associate director of retirement services. (Office of Personnel Management)

The Office of Personnel Management expects to meet its goal of boosting interim pensions for most new retirees this month.

Bill Zielinski, OPM's associate director of retirement services, said in an interview Monday that the agency will use the initial pension estimates from retirees' employing agencies to determine their interim annuities. He said OPM has finished studying agencies' initial estimates to ensure they are accurate in most cases and also to identify scenarios where someone's estimate will likely be inaccurate and should not be used.

Zielinski first told reporters in April about the new strategy and his plan to have it in place within 60 days.

"We'll begin using agency estimates this month," Zielinski said. "What we're really into now is analyzing those [study] results and finding those places within which we think there's risk or vulnerability or issue with the estimates that we have."

The problem of incomplete annuity payments has plagued OPM for years and angered tens of thousands of federal retirees. The agency takes months to process pensions for new retirees, and in the meantime, some receive interim payments amounting to half of what they are owed or less. Affected retirees say being shortchanged for so long causes enormous financial hardship, and many must dip into savings or withdraw funds from retirement accounts such as the Thrift Savings Plan while OPM straightens out their pensions.

But the new strategy of using agencies' initial estimates won't work for all new retirees. Zielinski said some retirees have very complex service histories, and their employing agencies may not have accounted for all the factors that go into determining someone's pension. OPM is now looking for the "red flags" that would alert claims examiners about such a situation, to make sure OPM doesn't overpay retirees and later require them to repay the government.

"It's not always easy," Zielinski said. He wasn't sure what percentage of new retirees likely will have service histories too complex to use initial estimates.

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