President’s budget pushes electronic retirement system

By Brittany Ballenstedt

February 6, 2007

About a year from now, federal employees may be able to begin accessing their retirement records online.

With the release of President Bush's budget Monday, the Office of Personnel Management outlined its hopes to attain $15 million in fiscal 2008 for its Retirement Systems Modernization project.

The funding would be used to "replace OPM's legacy information technology systems with modern technology, move from paper to electronic record-keeping and enhance core retirement business processes to meet the needs of active and retired federal employees by providing access to account information and planning tools," according to the president's budget proposal.

The system is being designed to improve the quality and timeliness of services to the more than 3 million active employees covered under the Civil Service Retirement System and the Federal Employees Retirement System.

Currently, when federal employees retire, it often takes months until they receive an accurate annuity payment. That's because OPM stores its paper-based retirement benefits documents in a series of file cabinets at a Boyers, Pa., facility. In fact, an OPM official said that last year, if the cabinets were laid end to end, they would stretch from Washington, D.C., to Baltimore and begin to come back.

By eliminating paper records, the new system will enable the government to better manage the retirement benefits of the 60 percent of federal employees expected to retire over the next 10 years, OPM officials said.

OPM Director Linda Springer said at a briefing Monday that gaining the resources necessary for modernization is the agency's highest funding priority.

"The men and women of the federal workforce [who] have spent decades working for us deserve to have their information calculated correctly the first time," Springer said.

OPM requested almost $27 million for the project in fiscal 2007, but under the continuing resolution passed last week in the House, the agency would receive only about $13 million. Springer said the $15 million request for 2008 would not be enough to finish the project, but would be sufficient to begin the process of creating electronic records for the 25,000 employees expected to begin retiring in March 2008.

Springer said OPM is aiming to go live with the project in February 2008. According to a timeline on the agency's Web site, all General Services Administration employees will be able to view their retirement information online as of the launch date. Four additional active employee migration waves will follow the launch, gradually bringing all active federal employees' information into the retirement system.

The National Active and Retired Employees Association praised the administration's request for modernization funds. "We're glad to see that OPM has made it a priority to speed up these claims to ensure that retirees receive their full annuity after they retire," the union said.

In May, OPM awarded a 10-year, $290 million contract to Hewitt Associates of Lincolnshire, Ill., to create the electronic system. Accenture later won an additional contract to develop business transformation and IT models to move the government to an electronic retirement system. Integic Corp. of Chantilly, Va., a subsidiary of Northrop Grumman Corp., won an agreement to digitize the employee retirement records.

By Brittany Ballenstedt

February 6, 2007