GovernmentExecutive.com

Editor's note: Regular Retirement Planning columnist Tammy Flanagan will return next week.

About a year ago, when Linda Springer took over as director of the Office of Personnel Management, she pledged to fix the lag time in retirement benefits processing.

When federal employees first retire, the pension check they receive is often just an estimate -- a lowball estimate -- of the benefit they actually accrued.

"If you've moved from place to place, several agencies -- and by and large we've been in a paper environment for a lot of your records -- it will take time for your actual annuity amount to be finalized," Springer said last July. "That's a system that needs to be fixed."

The back-office processes are now getting some help from global consulting firm Accenture, OPM announced late last week. The personnel management agency awarded a $40 million, four-year contract to the company to develop business transformation and information technology models to transfer the government to an electronic retirement system.

"With Accenture's support and expertise, we are one step closer to eliminating the current, antiquated, paper-driven system of retirement benefits processing," Springer said in a statement announcing the contract.

Accenture's agreement is the second in a three-step project called Retirement Systems Modernization. As part of his fiscal 2007 budget proposal for OPM, President Bush suggested $26.7 million in funding for that project.

In early May, OPM announced a 10-year, $290 million deal with Hewitt Associates of Lincolnshire, Ill., to carry out the first step. The idea is to create a one-stop electronic shop for federal employees and retirees to access their retirement records and for the government to compute pensions.

A third contract is in the acquisition process and OPM officials expect to award it in August. It will provide the actual conversion of paper records into the electronic realm. The entire process, OPM said, will not be completed until 2010.

Accenture's task is more theoretical. The business transformation half of the contract will, in OPM's words "align the people, processes and organization to achieve maximum benefits and efficiencies of the solution," including training, communication, organizational design and competency assessments for the processors.

In the technological half, the company will develop in-house technology for OPM to efficiently sort the data housed in the system, and harmonize the new system with OPM's financial systems.

A modernized system will allow the government to tabulate benefits for new retirees in five days or less, OPM said. The system also will improve accuracy of the claims from 90 percent to 93 percent in the older Civil Service Retirement System and from 95 percent to 97 percent in the Federal Employee Retirement System.

COMMENTS

• Ms. Flanagan, I hope your time off was for something enjoyable, like a vacation. Now, back to the grindstone! I am confused about the correlation between annuity and FEHB for my spouse. I went to a retirement presentation, and my notes don't seem to agree with what I am seeing elsewhere. And I can't seem to find anything useful in the FERS/CSRS handbook. I understand that if a minimal distribution is not made from the FERS Basic Annuity, one can not continue health insurance. Can I roll over any of my FERS Basic Annuity to an IRA? If so, does that constitute a "minimal distribution" for purposes of maintaining FEHB health insurance? If I can (and do) roll over any of my FERS Basic Annuity to an IRA, does any money need to be left in the FERS Basic Annuity to continue health insurance? If so, how much? Perhaps you could delve more deeply into this subject in a future column. And thanks for all of your thought-provoking columns. Charles FERS, Detroit GovExec.com reader Posted June 7, 2006 5:21 PM
• "The back-office processes are now getting some help from global consulting firm Accenture, OPM announced late last week" Accenture is the old Andersen consulting firm that had to separate because of conflicts of interest. Accenture was lucky to separate before Andersen was forced out of business because of its role in the Enron failure and shredding of critical papers. More importantly, Accenture moved its operation offshore to avoid U.S. income taxes and continues to be awarded contracts by U.S. government agencies when there are many U.S. companies that pay taxes who could perform equally well or even better than Accenture! The U.S. government should not contract with Accenture unless and until they become a U.S. company paying U.S. taxes on all U.S. contracts! This system is a perfect example of one that small local businesses could provide for OPM and probably would provide a better product that actually worked in less time and for far less money! OPM has no clue how easy this system is and should be ashamed to let this big contract to a foreign based firm! There are many local firms in the D.C. area that could do this work far better than Accenture and also that are American companies! Where are you Duncan Hunter? Taxpayer Posted June 5, 2006 6:54 AM
• I'm willing to bet $1 million that this contract does not include a provision to hold the contractor monetarily liable in the event they lose or displace government employee personal information. I'll also bet that the contractor allows their employees to take my personal data home. I also bet there is no contract provision to force the contractor to have a "bulletproof" computer firewall to prevent hackers from stealing my personal information, and if they do allow thieves to steal the data how will I be compensated?. The government is clueless when it comes to security of personal data, our borders, 9/11, VA, government credit cards, hurricanes, etc. The only way I can benefit from all this chaos is to sell my own personal data and make a few bucks. They have already lost my personal data twice and I didn't make a dime. If I sound bitter it's because I am!!!!!!!! Un-Civil Servant GovExec.com reader Posted June 2, 2006 9:36 AM