Energy Department employees Karen and Lavelle Adams of Upper Marlboro, Md., retired in June. Since then, it's been a nightmare.

They get only partial pension checks — half or less of what they say they are entitled to — until the Office of Personnel Management sorts out exactly what they should be getting, a process that could take between six and 12 months. Meanwhile, to keep up with mortgage and bill payments, the Adamses withdrew retirement savings from their Thrift Savings Plan — at a 20 percent penalty.

Similar stories are playing out nationwide. The National Active and Retired Federal Employees Association said member complaints about similar delays have shot up in recent months.

"OPM has informed some agencies that they were now taking six to 10 months, or 12 months, to complete retirement applications this year," said Dave Snell, NARFE's retirement benefits director. "Normally, OPM is very good about getting resources moved around to attack these big workloads, but they may not have the resources to handle all of these as timely as they'd like."

The Adamses and other retirees say they were told by OPM that full retirement checks are delayed longer than usual because of a recent surge in U.S. Postal Service early retirements: more than 18,000 in the last two years.

OPM did not respond to repeated requests to discuss the annuity backlog and how it is addressing the problem.

In a statement, OPM Director John Berry said he is "not happy with the speed, accuracy or service level of the retirement processing system." He added: "Historically, this has been a people-and-paper process, but people and paper don't adjust easily to surges."

Berry gave no deadline or goal for improving the process, adding that "electronic solutions are years in the future, but we are dedicated to making the process more predictable and transparent now."

In a written response to Federal Times questions, OPM said the "administration has asked Congress to help OPM maintain its retirement processing capacity during these unexpected surges by letting agencies contribute their resources towards processing during such surges. We are also in the process of hiring 40 more legal administrative specialists."

A long-time problem at OPM

OPM calculates checks using an outdated system of paper-based records that has defied four attempts at modernization over 23 years. The result is that retirees — between 46,000 and 62,000 a year — receive partial annuity payments that are roughly 60 percent of what they are owed for months until OPM figures out what the full exact amount should be.

Once the full amount is calculated, OPM sends out checks to cover the amount of money underpaid in those initial monthly checks. Those reimbursement checks do not include interest.

OPM's last attempt to modernize its process for calculating retirement checks was in 2008, but that ended in failure when OPM canceled a contract with Hewitt Associates after the company's system proved inadequate at handling the complex calculations required.

After that, OPM took a more incremental approach to the problem. Berry in April said he hoped to have a basic retirement calculator in place by 2011 to handle standard, uncomplicated annuity calculations, which he estimates make up 60 percent to 70 percent of retirements. Berry said once that basic calculator is in place, he will expand its capability to help employees with more complex retirement circumstances.

But even that less-ambitious effort appears stuck. In August, the White House declared OPM's retirement systems modernization program to be "high risk" and in need of more scrutiny. "At OPM, the retirement modernization system is essentially halted," White House chief information officer Vivek Kundra said during an Aug. 23 conference call.

OPM CIO Matthew Perry told reporters then that the agency has taken four shots at reforming the retirement process, at a cost of $136 million, over the last 23 years. He said modernizing the retirement system is a high-priority project, but the complex business rules involved and reliance on vast numbers of paper records make it difficult.

"We want to get the information out of the black box and how we calculate the retirement benefits awarded to a person and make those all visible," Perry said.

Anthony Vegliante, the Postal Service's chief human resources officer and executive vice president, said it isn't fair for OPM blame the Postal Service for its problems. Lengthy delays in getting retirement checks right have plagued OPM for years, he said.

Early retirements at the Postal Service numbered 13,429 in 2009 and 4,705 in 2010. But total retirements at the agency for both years were about 32,000 annually. That's only slightly higher than the normal number of annual postal retirements, which is roughly 30,000, he said.

"That's kind of unfair," Vegliante said. "What if they get an extra 5 percent retirements? What's your backup plan? If they don't have a backup plan, I don't think they should be blaming others. I think we're the excuse du jour."

A challenge for new retirees

Meanwhile, federal retirees are frustrated by OPM's inability to pay them what they're owed — and in some cases they are struggling.

When the Adamses sent e-mails to OPM asking when they would get their full annuities, they got only automated responses saying the agency would respond in 15 to 20 days. But no responses came. After 20 days, they sent another fruitless e-mail.

When they finally got through to someone on the phone, they were told the Postal Service retirements had put OPM behind and it would be about six months before they got their complete annuities.

"I don't think it is even 50 percent [of what we are owed]," Karen Adams said.

The Adamses said they are worried they will not be able to cover their mortgage, and are frustrated by the lack of communication from OPM. They asked OPM to send documentation saying their full annuities are delayed so they can convince their mortgage lender to let them slide on their full monthly payments for a few months. But OPM has not done so.

"I'm concerned we'll start going into foreclosure," Karen Adams said. "I don't have the kind of mortgage you can just catch up on. We've got a pretty high mortgage, but we'd be able to cover it if we had our entire annuity payment."

The Adamses recently took a partial withdrawal from their Thrift Savings Plan accounts to cover their mortgage and bills, but it cost them a 20 percent penalty. And Karen Adams said the IRS will likely penalize them further for their early withdrawal.

‘You're in the dark'

One retired federal law enforcement officer, who asked not to be named, submitted her paperwork months before she retired, but it didn't help her get her full annuity any faster. The officer turned in her paperwork in September 2009 and retired Jan. 1, 2010 — but she didn't receive her first full check until this month, nine months after she retired.

She said she suspects her status as a law enforcement officer and the fact that she worked part-time for a few years complicated matters.

"I think they just stuck mine at the bottom of a pile," she said. "That's the impression I got. You could never get a hold of anyone at OPM. Just a stupid canned response."

It wasn't until she asked her congresswoman for help in July that her case seemed to start moving. In August, she got a check partially supplementing her previous partial payments. A second check arrived in September covering the rest of the balance, and her first complete annuity arrived Oct. 1.

"If they had just called me and said, ‘Here's the issue, here's where we're at,' I probably wouldn't have contacted her," she said. "But nobody was responding. That's what's frustrating."

The new retirees interviewed by Federal Times said another problem is that they do not receive statements from OPM recording their payments and withholdings. OPM could not tell them whether taxes were being withheld from their partial annuities, leaving many to wonder if they need to set money aside to pay those taxes next April.

"I have no record of anything they've taken out," said Ken Ott, who retired from the Navy in July and believes he is now receiving about 75 percent of what he is owed. "I don't understand how they can do this.

The retired law enforcement officer said when her retirement calculations were finished, she discovered OPM was withholding taxes.

"If someone doesn't fill you in on anything, you're in the dark," she said. "It didn't affect my plans, but you couldn't make plans for the rest of your life because you didn't know what your total annuity was going to be."

Snell said all retirees under age 62 who are covered by the Federal Employees Retirement System also are not getting a special supplemental annuity — which they receive until they become eligible for Social Security — until OPM finishes their annuity calculations. That amount varies based on how long someone worked for the federal government and the size of their career Social Security benefit.

"They're really feeling the financial hardship," Snell said.

But experts say there may not be much OPM can do to speed things up. Snell said if they try to pull more employees from other divisions to handle the surge in retirements, other aspects of OPM's mission could falter.

Former acting OPM Director Michael Hager said the agency could pay its staff to work more overtime and hire more contractors, but tight budgets may not allow that.

"It's not as easy as Berry saying, ‘Let's do it,'Ÿ" Hager said. "Someone has to say, how do you pay for that?"

Snell said OPM has bumped some NARFE members to the top of the list when NARFE asked for help.

Origins of the problem

Experts say today's problems stem from several factors. In recent years, OPM scanned the government's roughly 144,000 file-cabinet drawers of paper records into digital files.

But many of those records still require manual interpretation and processing because they are riddled with Post-It notes, incomplete and illegible data, and handwritten notes in the margins. And OPM continues an effort to clean up those files, page by page.

The wide variety of retirement systems — compounded with other factors such as breaks in service and transitions between different agencies or branches of government — has vastly complicated the retirement process. Data from all those systems must be stitched together, and most experts believe it is impossible to create an all-encompassing automated retirement system.

And the government isn't going to banish paper employment records anytime soon. Even new employees hired today still have at least some of their personnel records in paper form, Hager said.

"My goal [while running OPM] was to have no paper in the retirement area. When I left, a lot of great progress had been made," he said, but more progress still remains.

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