There's been a lot of debate during the past year over whether federal employees' compensation is too generous compared to the pay and benefits their private sector colleagues receive. Depending on one's perspective and the data used, federal workers are paid either too much or too little. Let's say, for the sake of argument, that federal employees on average receive generous retirement packages. That's much less of a benefit it if they have to wait several months after they retire to fully access their money.
Last week, I wrote a column about OPM's efforts to improve its much-criticized retirement claims process. I received a great deal of feedback from federal retirees who are having difficulty receiving their annuity payments in a timely fashion, or at all. They're understandably frustrated with the process and in many cases, the lack of response from the government; many of them rely on their annuity to pay for mortgages, children's education and the basic necessities of life.
Herb Lucki, a former Interior Department employee who also worked at the Defense Department and retired in December 2010, said he received his first interim payment expeditiously, but he's still only getting 35 percent of his annuity, which is tough. "Retirement is supposed to be an enjoyment of life, not a period to worry if one will run out of money or not. I'm not a poor man, however, I am not a rich man either. I live within my means, and based on what my annuity is supposed to be, I would and will be very comfortable. However, it's not very comfortable living on 35 percent of what I am supposed to receive, and not have an explanation as to why this is."
Others have had different challenges with the retirement claims process. Before Mary Loiselle, a former senior executive at the Homeland Security Department, retired in December, she made some changes in her paperwork associated with life insurance, health care benefits, her survivor benefit, and the bank account in which she wanted her payment deposited. Of those four changes, only one was processed correctly. "The claim was processed timely, but they missed things," Loiselle said.
Loiselle was particularly concerned about losing her health insurance -- which she stipulated that she wanted to keep -- from January to April. "I called my HR rep, and she was dumbfounded," Loiselle said. "She had submitted all of the paperwork showing that I wanted to continue having health care coverage in retirement." Loiselle eventually got OPM to rectify the situation, but only after she tracked down through a phone call to OPM's Boyers, Pa., office the name and contact information of the person handling her claim in Washington. "I believe that in their haste to lessen the adjudication time and move through the volume of applications that they have, they don't pay attention to the paperwork they have in front of them," she said. "Each application is a person, with decisions made and effects on their future. The frustration I felt was excruciating."
Still another reader said he was impressed with the government's speed and accuracy in processing his retirement claim, which took 15 weeks. "I was also impressed with the clarity of the communications I received from the Labor Department, National Finance Center in New Orleans and OPM," said Jim Smith of Sylvan Lake, Mich., in an email, referring to the Office of Personnel Management.
It's certainly not a cinch to process quickly thousands of complicated retirement claims. Of the 43,000 total retirement claims now in the queue, 70 percent of them were submitted from January to March, which is typically the busiest season for people to put in for retirement. That is a 22 percent increase in claims from the same time last year. And to save money, OPM is terminating its retirement systems modernization program, designed to automate the federal retirement process through a large-scale project. "Eliminating the RSM program as a formal budget item will save at least $2 million in administrative costs while we conduct a bottom-up review of the retirement service process and maintain a focus on achievable goals to automate the retirement processing system," OPM Director John Berry said during an April congressional hearing on the agency's fiscal 2012 budget request.
In the meantime, OPM has hired 40 more claims examiners who will be out of training and ready to work this summer, and the agency also plans to provide recipients with the name and contact information of the employee handling their case. Many readers expressed aggravation over not knowing who was handling their claim and where to seek specific information. OPM has a toll-free number and website to field inquiries, but some still complain about long wait times or unhelpful customer service.
"Our paramount goal is to improve the overall claims adjudication process," OPM said in a statement. "There is no simple or easy solution that is capable of instantly remedying the problem, but we are doing everything in our power to improve service to our annuitants as rapidly as possible within the constraint of available resources. We have begun several initiatives to not only speed up claims review but to streamline other attendant retirement procedures."
OPM said the agency is committed to providing retirees with as much of their annuity as possible in interim payments, but there are factors that complicate that goal. "Some of the conditions that could cause the annuitant to receive less than the agency's NET estimate are: a FERS annuity supplement, unpaid service credit deposits, redeposits or military deposits, a court order on file at OPM, or the retiree is entitled to a special computation as a law enforcement officer, firefighter, air traffic controller or other special retirement group."
Federal pay and benefits increasingly have become the target of spending cuts from Republicans and Democrats. The problems with federal retirement claims processing aren't exactly on the political front burner. But the issue is having a real financial effect on federal retirees across the country.
As Loiselle put it: "It's not a good time to toot the horn of government employees. But gosh darn it, what would they do without us?"