Watchdogs

GAO: OPM’s retirement system needs its own departure plan

The Office of Personnel Management is taking too long to process federal retirement applications and lack of technology is to blame, according to a report released publicly by the Government Accountability Office June 14.

According to the report, more than “100,000 federal employees depend on OPM each year to process retirement benefits, such as life and health insurance, in a timely manner.” Individuals begin receiving regular monthly benefit payments once the process is completed.

However, federal retirement application processing has met significant delays due to OPM’s antiquated processing operations, which requires federal employees to submit paper applications through their agencies.

GAO found that, between 2014 and 2017, OPM processed only 57 to 59 percent of retirement claims within 60 days annually — falling short of its goal to process 90 percent of claims within 60 days. OPM set a goal in April 2018 to process all applications within an average of 60 days, but only achieved this for five out of the nine months from April and December 2018.

According to OPM, the root causes of retirement application processing delays are paper-based applications, which often result in inaccurate data due to manual data-entry errors, insufficient staff and up to 40 percent of applications missing information needed to finalize processing.

Insufficient staffing is an especially important problem during the peak workload period from mid-January to February. During this period in fiscal years 2016 to 2018, OPM received an average of 13,200 applications per month, “a considerable increase over its average of about 7,200 per month at other times of the year.”

OPM has tried to address this problem in the past, but with little success. The agency attempted to deploy an automated retirement processing system in 2008 and made efforts to address GAO’s respective recommendations to improve the system, but terminated the modernization effort in February 2011.

In 2013 OPM crafted a “strategic vision for modernizing retirement applications processing” that “envisioned a paperless system that would timely authorize accurate retirement benefit payments, answer customers’ questions, and promote self-service account maintenance.” Of the plan’s five key initiatives, two are developed and partially implemented, one is partially developed and two are partially developed and awaiting further direction from OPM’s IT leadership.

However, OPM “was unable to provide estimated time frames or costs” for the plan’s initial phases.

OPM officials said that “additional information technology modernization work is dependent on sufficient funding, support from the Office of the Chief Information Officer, and development of a tech enterprise architecture roadmap.”

GAO stated such factors are important, but "do not preclude OPM from establishing estimated cost ranges and time frames — practices consistent with industry best practices and IT project management principles.”

According to the report, OPM’s lack of cost estimates and timelines for a modernization plan mean there are no measurable results with which to evaluate resource needs or interim progress.

OPM’s retirement application processing modernization plans lack specific performance measures, such as a requirement to complete processing steps in a certain time frame — even though “agencies and payroll centers that submit these applications to OPM are required to do so within a certain time frame.”

Also according to the report, “The number of unprocessed applications in inventory does not include disability retirement applications still pending approval." As a result, "OPM’s performance information for both application errors and inventory does not reflect the full extent of processing delays because various applications have been excluded. OPM officials were unable to explain to us why or how they decided to exclude certain applications.”

GAO made six recommendations, including that the “OPM should develop a retirement services IT modernization plan for initial project phases” and “develop and implement policies for assessing staffing strategies intended to improve processing times.” OPM concurred with one recommendation and partially concurred with five recommendations.

This isn’t the first time OPM’s systems have been evaluated and found to need improvement, and these shortcomings are potentially a factor in a proposed reorganization of the agency.

According to OPM acting-Director Margaret Weichert, the federal employee retirement system is tied into the same system that currently processes security clearance background checks.

With a transition of OPM’s National Background Investigation Bureau to the Department of Defense announced in April 2019, part of the funding source for maintaining the retirement system will be unavailable to agency leadership.

This rationale is part of why, in June 2018, the Trump administration proposed dismantling OPM and placing its different pieces among other executive agencies. The proposal included moving retirement services to the General Services Administration.

According to Weichert, merging federal retirement services with GSA could help the agency avoid financial problems, since GSA could help OPM modernize its aging IT infrastructure.

GAO recommended that OPM continue “to develop plans to modernize retirement IT systems … given that the details of the reorganization are still unknown and that the move ... may not occur in the near term, or at all.”

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