Expert's View

Those of you who are considering retiring have heard horror stories about OPM’s processing of retirement claims. And those of you who have recently retired can confirm many of them. It was because of these problems that On May 9, OPM’s Inspector General Patrick E. McFarland testified before the House Subcommittee on Federal Workers, U.S. Postal Service and the Census Committee on Oversight and Government Reform.

Although McFarland stated that he believed OPM’s most recent strategic plan to address the retirement claims backlog was sound, he expressed concern with the reduction of quality control measures. He said:

Based on testing done by RS’s [Retirement Service’s] Quality Assurance group, the adjudication accuracy rate for retirement annuities dropped from 91.7 percent in 2011 to 90.9 percent in 2012. It dropped again during the first quarter of 2013 to 90.6 percent. This drop in adjudication accuracy is troublesome, and well below OPM’s target rate of 95 percent. To put this in context, since RS adjudicated approximately 112,000 claims in fiscal year 2012, a one percent decrease in accuracy translates to an additional 1,120 cases with errors that require re-adjudication. Not only must OPM expend additional man-hours to correct these errors, but it creates further delay that potentially causes hardships for annuitants and their families. Moreover, by definition, these error result in improper payments, either overpayments or underpayments to the annuitant.

The reasons for these problems aren’t hard to find. And they haven’t changed much since I worked at OPM: a largely paper-based system, failed efforts (some at huge cost) to automate that system, reductions in staff in anticipation of those efforts succeeding, too many retirement applications coming in that are incomplete or inaccurate, and, when early retirements and buyouts are offered, tidal waves of applications that overwhelm the system.

Add to that the fact that the retirement system is saddled with rules about what is creditable service and under what circumstances, variations on those rules, and exceptions to the variations. The end product is a system that is ripe for error. And when those who are in charge of making those determinations are pressed to cut a backlog, accuracy will inevitably suffer.

Having watched the speed and quality of retirement case processing rise and fall many times over the years, I predict that things will get better. However, it will take time.