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OPM details fixes for pension check delays

Jan. 23, 2012 - 06:00AM   |  
By STEPHEN LOSEY   |   Comments
Office of Personnel Management Director John Berry pledged in October 2010 to fix a big problem: the delays new federal retirees face in receiving accurate pension checks  but the problem has gotten worse.
Office of Personnel Management Director John Berry pledged in October 2010 to fix a big problem: the delays new federal retirees face in receiving accurate pension checks but the problem has gotten worse. (File photo / Getty Images)

For years, the Office of Personnel Management has been months late when getting accurate pension checks out to new federal retirees.

But since OPM Director John Berry http://www.federaltimes.com/article/20101020/BENEFITS02/10200304/">pledged in October 2010 to fix the problem, it has only gotten worse.

In October 2010, http://www.federaltimes.com/article/20101018/BENEFITS02/10180301/1047/BENEFITS02">it took OPM 138 days to process an average retirement claim, and it had about 38,400 cases backlogged.

Today, processing times are 156 days 13 percent longer, and the backlog is 48,378 claims 26 percent bigger.

Many receive pensions that are a quarter to a third less than what they are owed for five months or more. Others get less than half of what they are owed, and some retirees have told Federal Times they have been waiting more than a year for their full pension, forcing them to dip into savings or their Thrift Savings Plan and pay early withdrawal penalties.

The Office of Personnel Management last week unveiled a long-awaited plan to fix the problem once and for all.

The plan, submitted to lawmakers Jan. 17, calls for:

A nearly 50 percent increase in OPM's retirement processing staff.

Streamlining processes.

Improved information technology.

Better cooperation and data exchange with other agencies.

Those steps will bring the backlog down to a "manageable" 13,000 open cases within 18 months, according to the OPM plan. By July 2013, Berry wants 90 percent of retirees to receive their full annuity payments within 60 days of retirement.

"Federal employees face unacceptable delays in receiving retirement benefits after years of honorable service to the nation," the plan's executive summary said. "OPM and our retirement services team are committed to providing our annuitants with the service they deserve."

But OPM has a hard road ahead http://www.federaltimes.com/article/20111127/BENEFITS02/111270306/">and it's falling further behind.

Retirement applications surged 24 percent for the first 10 months of 2011. And the wave of retirements is likely to grow even more as agencies under increasing budget pressure offer more early retirement incentives and buyouts to get employees off their payrolls.

Critics skeptical of plan

Some of OPM's most vocal critics organizations that hear constant complaints from the federal and postal retirees they represent are glad OPM has laid out how it plans to solve the problem. But they fear it won't work.

"It's rather hopeful," said Dave Snell, retirement benefits director for the National Active and Retired Federal Employees Association. "But I would rather have seen some teeth to it. Rather than voluntary overtime or voluntary compliance by other agencies, something that is mandatory, because I think this is an emergency."

Ernie Kirkland, the National Association of Letter Carriers' director of retired members, was unimpressed.

"It's more of the same, it appears," Kirkland said. "I think they're trying. But it seems like they're just throwing bodies at a problem, and I don't think they're there yet."

Snell said he's glad to see OPM devoting more manpower to retirement, though he said many of these new hires won't have much effect for at least several months while they are being trained. And OPM has focused on the right areas for improvement, he said.

"It's going to help," Snell said. "Is it going to reduce the backlog by the goal date? I'm a little skeptical."

Kirkland was dismayed that OPM's plan does not call for including in the interim annuity payment a Social Security supplemental payment for Federal Employees Retirement System retirees under 62. OPM said it cannot include that supplemental, which many FERS retirees use and can be several hundred dollars a month, because employing agencies do not have Social Security payroll information that would be needed to calculate that supplemental. OPM said it would have to get that information from the Social Security Administration, but has not done so.

Kirkland doesn't buy that explanation, and said OPM should reach out to SSA before it reaches the final stages of annuity processing, as is its current method.

"They can do it," he said. "I think they just don't want to spend the time."

Kirkland said OPM should do more to maximize the interim payments, and bring them up to 95 percent of what retirees are eventually paid. OPM has been trying to do this, but in fiscal 2011 only averaged an interim payment of 80 percent.

But Kirkland isn't sure what else can be done to fix the problem.

"I don't think the workers can work any harder than they are," Kirkland said. "We talk to them. We know they're busy."

OPM said it wants to increase the amount paid during retirees' interim period, but its plan does not say how it will do that.

OPM has spent more than $100 million over the last 20 years trying to solve the incomplete annuity problem, with little to show. Its most high-profile failure came in 2008, when former OPM Director Linda Springer pulled the plug on the automated RetireEZ program, which did not work.

OPM's plan

The plan relies heavily on rebuilding OPM's staff of legal administrative specialists who process retirement claims, and bolstering other support staff to give those specialists more time to concentrate on complicated cases.

For example, OPM plans to hire 20 additional customer service specialists within six weeks, who will work with employees on a new claims development team. That team will focus on preparing cases to make sure that when a legal administrative specialist receives a case, no other work is required.

Berry and other OPM officials have frequently said that processing is hampered by incomplete case files that require employees to hunt down missing documents.

OPM is also identifying employees elsewhere in the agency with adjudication experience and authorizing overtime hours so they can help out with pension processing.

But OPM said it is only authorizing overtime to specialists who have proven they can accurately and swiftly adjudicate claims.

OPM is also trying to find other support duties that administrative staffers or managers can take off of legal specialists' hands and free them up to do more processing. And OPM pledged to remove failing specialists who cannot or will not improve.

This will allow legal administrative specialists to increase their productivity from an average 700 claims per year to 1,100 per year, OPM said. OPM is considering new annual production standards, and creating both individual and group incentive programs to help meet the goal.

OPM has reorganized its call center staff into two groups. One answers basic questions about retirement claims, but more complicated questions will be sent to specialists who would otherwise be processing claims. This has cut the number of calls referred to legal administrative specialists down to nearly a third, from 7,216 calls in a three-week time frame to 2,577 calls, OPM said.

OPM has ambitious goals for its new hires, and claimed that its 56 new legal administrative specialists will be able to process an additional 3,000 claims per month by July on top of the roughly 7,700 monthly claims OPM now processes. Other reforms will add another 2,000 claims to its monthly capacity, OPM said.

Its 16 new lump-sum death benefit specialists are also expected to reduce that office's current backlog of 52,503 cases by up to 50 percent.

The plan also said OPM is about to start testing a long-term IT project with the Interior Department's National Business Center, which handles payroll for about 15 percent of the nonpostal federal workforce.

This system would automatically collect necessary retirement data from payroll providers, which would remove much of the manual processing that currently goes on.

But even here, RetireEZ's failure continues to haunt OPM.

"With the recent failure of RSM [Retirement Systems Modernization], other payroll centers have been reluctant to participate and are not as far along," OPM said.

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