FEDweek

Addressing the Annuity Payment Problem

You’ve all heard about it. If you are someone who is getting ready to retire, you’re anxious about it. And if you just retired, you’re frustrated about it. I’m talking about the OPM’s delays in processing retirement applications.

Last week I wrote about recently passed legislation that allows OPM to begin collecting a fee for processing retirement applications that were generated by early retirement and buyout offers. In that article I mentioned that the additional money would help OPM to increase the staff that processes those applications and reduce a backlog that has been largely generated by early retirement pushes by agencies, especially the U.S. Postal Service.

Now I want to tell you how large that backlog is and what OPM is doing, besides staffing up, to deal with it.

In October 2010, the backlog of claims was 38,400 and in April 2011, 43,000. The backlog crested in October 2011, with a grand total of 55,565 waiting in a cue to be processed. Although the number had been reduced to 48,378 in December, it still represents a backlog that delays the processing of a claim to over 150 days.

On January 17, OPM submitted a plan to the Hill that summarized the steps it is taking to reduce the backlog to a manageable size. First it will increase the staff that processes claims by 50 percent. Second, it will streamline the process. Third, it will use improved information technology. And finally, it will develop more cooperative relations with the agencies, especially when it comes to data exchange.

On Monday, January 23, I heard the OPM director, John Berry, expand on the steps they were taking, adding some verbal flesh to the outline above. While most of his comments were directed at increased staffing and intensive training, what caught my ear was the on-going top to bottom review of the claims process being carried out by experts from other agencies.

Berry mentioned one immediate gain in efficiency from their presence. The experts observed staff members removing staples from retirement applications. The staffers said that they wished the applications would come in without staples, which are murder to remove and eat up a lot of time. When agencies were asked why they stapled the applications, they said they thought that’s what OPM wanted them to do. Problem identified, problem solved.

According to Berry, it will take 18 months to cut the number of applications to a manageable 13,000. Brought on board to do that already are 56 legal administrative specialists (processors) to adjudicate claims, two customer service specialists to handle service credit redeposits, 16 customer service specialists to process lump-sum death benefit claims, and 16 paralegals to handle court-ordered benefits cases. And there are more hires in the works to increase OPM’s ability to handle phone calls and answer correspondence.

While skeptics abound, there are other who believe (or at least hope) that OPM can turn the corner and provide retirees with the kind of service they deserve after having put in the years of service needed to qualify for a hassle-free journey into retirement.