IN THE NEWS

Lawmakers Push for Solution to Delays in Full Pension Payments

August 08, 2005

By Stephen Barr

Washington Post

Key House members have served notice at the Office of Personnel Management that they are concerned about delays in processing and approving full pension payments to federal employees who have filed their retirement papers.

Some retirees have reported waiting several months for OPM to tally up the correct amount for their monthly checks and have questioned why.

When an employee retires, OPM provides an interim payment designed to avoid overpaying a retiree until the final pension calculation. Most employees get an accurate pension payment within 75 to 90 days, but some wait for months if they have complicated work histories or worked at several agencies.

Once OPM calculates the correct annuity, it sends a lump-sum payment to cover the months when the retiree got a "haircut," as the new OPM director, Linda M. Springer , put it at a July management conference in Washington.

Springer said she was aware of problems in processing retirement payments. "That is not something to be proud of, and it's a system that needs to be fixed," she said at the conference.

In a letter to Springer last week, the House members promised to work with OPM to correct problems that have caused retirees to wait for a complete pension payment.

"The discrepancy in their annuity can harmfully affect retirees' financial management plans and impair their ability to earn interest on accounts or investments, or in some cases to even affect their ability to pay current living expenses," the House members wrote.

The letter was signed by Reps. James P. Moran Jr. (D-Va.), Thomas M. Davis III (R-Va.), Steny H. Hoyer (D-Md.), Frank R. Wolf (R-Va.), Albert R. Wynn (D-Md.), Chris Van Hollen (D-Md.), Benjamin L. Cardin (D-Md.) and Jon Porter (R-Nev.) and Del. Eleanor Holmes Norton (D-D.C.).

Davis is chairman of the House Government Reform Committee, which oversees OPM, and Porter serves as chairman of the House federal workforce subcommittee.

The House members asked Springer to provide details on how OPM plans to correct annuity underpayments, how many retirees have received underpayments and what OPM is doing to speed retirement claims.

In June, OPM officials said retirement claims have been increasing by about 10 percent annually and appear on track to go up by that much again this year. To cope with the rising workload, OPM has renewed plans to buy technology that will automate some services and shift from paper personnel files to digital records.

The project, known as retirement systems modernization, should help speed payments of full pensions. At the July conference, Springer said the project was one of her top priorities.

OPM pays more than $52 billion per year in retirement benefits to about 2.4 million retirees and their survivors.

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