Retirement Planning Retirement PlanningRetirement Planning
Advice on how to prepare for life after government.

Trick or Treat

The secret is finally out: the Office of Personnel Management still processes retirement claims in 2010 much the same way it did in 1920. The process remains paper-based, requiring a human being to sift through the paperwork documenting an employee's career to be sure that he or she is receiving the proper retirement benefit.

OPM Director John Berry deserves credit for being transparent and open about the issue of modernizing retirement processing. He named William Zielinski as associate director of OPM's Retirements and Benefits Office in June. Zielinski must reduce the backlog of retirement claims in the short term and try once again to modernize OPM's processing system. As Berry acknowledged, the current situation, characterized by lengthy delays in processing claims, might not get much better any time soon. More than 40 percent of the federal workforce is 50 or older. In 1985, the figure was 25 percent.

OPM is hiring additional personnel to handle the workload. But retirement claims processing requires an in-depth knowledge of interpreting the evidence that documents a federal employee's career, which is complicated by all the changes in law and policy during the past few decades.

Processing retirement applications probably isn't going to be a speedy electronic process any time soon. So how can you make the best of the situation?

Cash Out Your Leave

When I was employed as a retirement specialist in the 1980s we would encourage our employees to save up their annual leave in the year they were planning to retire so that they would receive a substantial lump-sum payment for unused leave. The reason was they might have to live on that money while their retirement claims were being processed. This advice still holds true today.

Even if you don't already have a large stash of cash on hand (other than your tax-deferred retirement savings in the Thrift Savings Plan), you can count on receiving a payment for all your accumulated annual leave from your agency when you retire. This is the last check you'll get from your agency. It usually follows your final biweekly paycheck.

Suppose you carried over 240 hours of annual leave at the beginning of this year. If you didn't take any leave all year (but earned eight hours of leave for each of 26 pay periods), you could retire on Dec. 31 and cash in 448 hours of unused leave.

Once the dust has settled and your retirement has been processed, you'll get a lump-sum payment to cover the amount you have been underpaid during the time your application was being evaluated. Then you can spend or invest that money.

Documented Service

The complicating factor in retirement processing is assessing the paper trail that documents an employee's service. It's in your interest to make sure claims processors have the correct information. That means you should maintain a complete documented history of your federal career, especially all the personnel action statements (SF-50s) that document your service. They include several pieces of information vital to processing your retirement application:

  • The exact date you began an appointment.
  • The exact date the appointment ended.
  • The type of appointment (temporary, career conditional, permanent, etc.)
  • The retirement system you were covered by.
  • Your type of duty (full time, part time, intermittent).
  • The exact date you changed to a different retirement system, or type of service.

Your agency will compile the documents that verify your service from your official personnel folder (either a cardboard folder with an Acco fastener holding it together, or the E-OPF file in a database). You will be asked to sign off on a summary of your service before you retire. At that point, if something isn't clear to you, ask questions.

I've found that when employees request a retirement estimate from their agencies, they tend to focus only on the dollar amount of the projected benefit. But the two most important parts of the estimate actually are the first page, showing the data used to create the estimate, and the page in the middle with a summary of your federal career.

Look carefully at the data page, especially at the following information:

  • Date of retirement
  • Service computation date
  • Sick leave balance
  • High-three average salary
  • Survivor benefit election (if any)
  • Retirement system
  • Amount of any unpaid service credit deposits

The summary of service page is equally important, because it is the basis for the certified summary mentioned above that you will be asked to sign upon retirement.

Getting Help

According to OPM, "it is the agency's responsibility to guide the employee through the retirement process, supplying all of the information the employee may need about retirement and continuing insurance coverage into retirement."

The only problem is now the number of employees who are in need of assistance far exceeds the number of specialists who are adequately trained and experienced to handle their needs. Try to be understanding of the workload at your agency (after all, you might be doing the work job of two or three employees yourself these days), and plan ahead for retirement by requesting counseling up to a year in advance of actually retiring. The agency will prioritize the requests it receives, giving precedence to employees who are retiring soon, or applying for disability benefits.

Finally, be aware that some factors in the process are beyond anyone's control. My friend Anne lost her husband, who was a federal employee, to cancer in 2002. As she was waiting for OPM to process her survivor annuity claim, she noticed an unusual name in the obituary column one day that happened to be the same as the person at OPM who was handling her claim. She tried calling the claims examiner and found that his voicemail message had been replaced with a generic answering service. She finally found out that the person who was processing her claim had indeed died himself.

Anne's claim already had languished because some of the records of her late husband's service, which spanned four different agencies, were missing. Then the claim had to be transferred to another examiner, adding to delays. Her application was in "interim status" for 15 months before the problems were finally resolved. She received a retroactive payment and since then, has received her annuity every month with no problems or delays.

Tammy Flanagan is the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars. She has spent 25 years helping federal employees take charge of their retirement by understanding their benefits.

For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Monday mornings at 10 a.m. ET on or on WFED AM 1500 in the Washington metro area.

Upcoming programs will feature guests discussing health insurance open season this fall:

  • Nov. 1: Walt Francis, Checkbook's Guide to Health Plans for Federal Employees
  • Nov. 8: Jane Overton, GEHA Federal Health Plan (Fee-for-service plan and HDHP)
  • Nov. 15: John Patrick, Kaiser Federal Health Plan (HMO)
  • Nov 22: Tom Bernatavitz, Aetna Federal Health Plan (HMO/consumer-driven plan and HDHP)

Tammy Flanagan has spent 30 years helping federal employees take charge of their retirement by understanding their benefits. She runs her own consulting business at and provides individual counseling as well as online training for the National Active and Retired Federal Employees Association, Plan Your Federal Retirement as well as the Federal Long Term Care insurance Program. She also serves as the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars.

For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Federal News Radio on Mondays at 10 a.m. ET on WFED AM 1500 in the Washington-metro area. Archived shows are available on

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