OPM’s retirement backlog has fallen off the agency’s list of top management challenges

The Office of Personnel Management Office of the Inspector General last month reported that the agency’s backlog of pending retirement claims, long a source of headaches for agency leaders and retiring federal workers alike, no longer constitutes a “top management challenge” for the agency.

The news came in the form of the inspector general’s annual report on management challenges in fiscal 2025, in which the oversight office concluded that OPM has made “continued improvements” to the process in recent years.

“For this year’s top management challenges, we removed the retirement claims processing backlog due to OPM’s continued improvements in this area,” the report states. “While there is continued concern regarding Retirement Services meeting its goal of achieving an average case processing time of 60 days or less, OPM is continuing to work to enhance the Retirement Services customer experience, which includes performance measures related to the average number of days to process retirement applications.”

During the Biden administration, OPM has taken a more proactive posture towards reducing the backlog of pending retirement claims. The agency boosted staffing and overtime during peak seasons, such as the annual spike in requests around the start of the calendar year, and it created an online guide to help departing federal workers better understand and navigate the retirement process, as well as avoid common errors that contribute to long processing times.

Those measures appear to have made an impact: since the peak of the COVID-19 pandemic, when the backlog consistently hovered above 20,000 pending retirement claims, OPM has brought the inventory of retirement requests down to better than pre-pandemic levels. So far this year, only in January—the annual peak of submissions--has the backlog exceeded 20,000 claims, and by the end of last month, it fell to within 2,000 claims of the agency’s “steady state” goal of 13,000.

September marked the second straight month in which OPM made headway on its retirement backlog, falling to 14,494 outstanding claims. And measured on a monthly basis, the average time it takes for a retirement claim to be processed fell to 63 days, just three days from the agency’s 60-day goal.

Though the retirement backlog no longer dominates OPM’s management challenges, the agency should turn its focus toward insuring the “financial integrity” of its benefits programs—namely OPM’s role administering federal workers’ employer-sponsored insurance benefits. That includes the successful rollout of the new Postal Service Health Benefits Program, which is slated to begin when the federal benefits open season begins Nov. 11.

“The upcoming first Open Season of the PSHBP will present challenges for ensuring that USPS subscribers and members are able to successfully enroll in plans and navigate the PSHBS,” the inspector general wrote. “It will be a challenge for OPM to ensure the [Postal Service Health Benefits System] is operational before Open Season due to a narrow development and testing window. OPM is also challenged with ensuring that USPS enrollees receive adequate communication to understand the PSHBS as well as the new requirements to participate in the PSHBP.”

OPM received an additional $24 million over fiscal 2024 funding in the September continuing resolution that funded federal agencies until December due to the additional costs associated with standing up USPS’ new health insurance program for employees this fall.

The inspector general also continued to prod the agency to address concerns raised in a 2023 Government Accountability Office report that found gaps in the agency’s oversight of the Federal Employees Health Benefits Program to ensure that enrolled beneficiaries are still eligible for benefits. The inspector general’s office has previously estimated the cost of ineligible family members retaining benefits as between $500 million and $3 billion per year.

“Ineligible family members receiving FEHBP benefits remains a top management challenge for OPM,” the report states. “[OPM] has taken or has plans to take appreciable steps towards addressing this issue, including issuing further and more robust guidance in benefit administration letters as well as monitoring recommendations from GAO. However, ineligible member enrollment in the FEHBP remains an ongoing difficulty for the agency.”

As the report states, last April OPM announced new measures aimed at curbing improper payments due to family members retaining benefits despite no longer being eligible, such as when a dependent reaches age 26 or a spouse becomes divorced, including requiring agencies to review family members’ eligibility for FEHBP for a random 10% sample of FEHBP enrollees.

Part of the difficulty in auditing FEHBP’s beneficiary rolls is the decentralized nature of the system across more than 100 federal agencies. OPM officials have said that they hope the development of the USPS insurance system, which will be centralized within the HR agency, could be a model for building the needed capabilities for OPM to conduct better oversight over FEHBP.

“I’ve been involved in enough IT projects in my time to say that until it’s done, it’s not done, but it is our honor to be able to implement this provision for postal employees, and we look forward to turning on a modern system that can be a model for FEHB going forward,” said Acting OPM Director Rob Shriver at a meeting of the House Oversight and Accountability Committee last May.