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Interim pensions for new retirees more accurate, OPM says

Nov. 9, 2011 - 06:38PM   |  
By STEPHEN LOSEY   |   Comments
Kenneth Zawodny is associate director of retirement services at OPM.
Kenneth Zawodny is associate director of retirement services at OPM. ()

Most new retirees are receiving more accurate interim pensions in the months after they leave the federal government, the Office of Personnel Management said Oct. 27.

For years, OPM has sent new retirees annuity checks that were often a fraction of what they should have received, causing tens of thousands of retirees serious financial hardship for six months or more while the agency calculated the correct pensions. But Ken Zawodny, OPM's associate director of retirement services, said in an interview that OPM in June began using the initial pension estimates from retirees' employing agencies to determine their interim annuities.

Because of that switch, 95 percent of new retirees are now receiving, on average, 90 percent of what they are owed, Zawodny said.

"I think we're getting closer" to solving the problem, he said. "We continue to reach out to the agencies and work with them to refine the calculations that they're performing and ensuring that all agencies large and small are using best practices."

But the National Association of Letter Carriers, a vocal critic of OPM's inability to fix the interim annuity problem, doubts OPM's latest claims of success.

Ernie Kirkland, the union's director of retired members, said one member retired Oct. 1 and is getting one-third of what he is owed.

"They're nowhere near 90 percent, from what we're seeing," Kirkland said.

Dave Snell, retirement benefits director for the National Active and Retired Federal Employees Association, said his organization has seen complaints drop off.

"Overall, my feeling is that we're getting fewer complaints but we're still getting them," Snell said.

Still waiting

OPM's move to use agencies' initial estimates hasn't benefited some feds who retired before the change was made. Some retirees have been receiving partial pensions of far less than 90 percent for several months and at least one has waited more than a year for what she is owed.

Nancy Gondron retired from her 30-year career as a Veterans Affairs Department registered nurse Oct. 31, 2010. For more than a year, Gondron has received about two-thirds of what she's owed, not counting the Federal Employees Retirement System (FERS) supplement that is likely to add another few hundred dollars to her pension.

In a Nov. 2 interview with Federal Times, Gondron said she regularly calls and emails OPM to find out what's holding her pension up, but gets little help.

"It's such a big mess," she said. "It's just like, you beat your head against the wall."

Gondron said OPM told her in late October that it is trying to track down a paper copy of her SF 3100 form, which has her work history and salary. OPM has an electronic copy of the form, but for some unexplained reason needs the original paper copy.

Gondron isn't sure the paper copy of her record still exists. She recently emailed the National Personnel Records Center in St. Louis to see if it has a paper copy, but hasn't heard back.

"I'm willing to drive down there [from Illinois] to look myself if necessary," Gondron said. "If I find it, I might drive to Washington to deliver it to them myself."

Mechanical engineer Stephen Watkins said he's been getting about one-quarter of what he's owed since he retired from the Army Corps of Engineers eight months ago.

Watkins said that before he retired, he knew OPM's pension processing was backlogged, and made sure he had enough money saved to last roughly six months. But those savings are running thin, and last month he started dipping into his Thrift Savings Plan far earlier than he expected to.

Watkins started calling OPM last summer to ask what's holding his pension up, but didn't get the help he wanted. He said one OPM official he spoke to "seemed very confused, and had poor communication skills." He said another didn't seem concerned about his problem and tried to pass Watkins off to someone else.

"Around July, I never thought I'd look at November and be in the same situation," Watkins said. "I've done everything I think I can do, and I've been more than patient."

If Watkins doesn't get his full pension soon, he may have to find another job.

"I didn't walk into this blindly," Watkins said. "I read the articles. I had several thousand saved up, and a spouse who works. But my idea [for retirement] was to improve my golf game, not go back to work."

OPM adds staff

Zawodny said OPM now takes 125 days on average to finish new retirees' complete claims a slight increase from the 117 days OPM reported in May, but still below the 138 days OPM took in October 2010. The increase to 125 days may be because a large number of employees retired in June and July, Zawodny said. He was not sure why more employees retired this summer.

OPM has about 130 employees processing retirement claims in Washington and Boyers, Pa. That includes 35 newly hired claims examiners who finished their training about a month ago and are now processing less-complicated cases. OPM hired 40 new examiners earlier this year, but five washed out or found other jobs and are expected to be replaced.

OPM has provided online accounts to retirees with pending claims, Zawodny said. Previously, only retirees whose claims had been finalized had online accounts. But new retirees still can't use those online accounts to check the status of their claims and who at OPM is processing those claims. Zawodny said he's not sure when that will be ready, and is working with OPM's chief information officer to resolve the problem.

Kirkland also said the interim pensions still don't include the Social Security supplement some FERS retirees are owed, which is usually worth several hundred dollars a month. That supplement, which is paid to FERS employees who retire before becoming eligible for Social Security benefits, isn't issued until OPM finishes calculating a retiree's final pension.

OPM in April said including the supplement in an interim payment would further complicate the process and would require additional software programming and more data from agencies.

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