Lawmakers rap OPM on underpaid retirement annuities

Nine members of Congress have lent their weight to the issue of underpaid federal retirement annuities, in a letter sent to the Office of Personnel Management last week.

The letter expressed concern over the "serious delays in processing and approving full annuity payments to federal employees upon their retirement."

The problem is one that OPM Director Linda Springer has stated is "right at the top" of her list on how to improve her agency.

At the Excellence in Government conference last month, co-sponsored by Government Executive, Springer told the audience that some employees must wait up to six months after retiring to be paid their full annuity. Until then, they receive an estimated annuity that often amounts to much less than what they are owed. OPM gives a lump sum payment to make up the difference.

"That's a system that needs to be fixed," Springer said. "If you've moved from place to place…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 the initial payout is "in the neighborhood" of 80 percent of the total owed to retirees.

The congressmen said in their letter that the discrepancy can have a negative impact on retirees' financial management, interest earned and even their ability to pay living expenses.

Reps. Benjamin Cardin, D-Md.; Tom Davis, R-Va.; Steny Hoyer, D-Md.; James Moran, D-Va.; Jon Porter, R-Nev.; Frank Wolf, R-Va.; Albert Wynn, D-Md.; Chris Van Hollen, D-Md.; and Del. Eleanor Holmes Norton, D-D.C. signed the letter.

"We are interested in how OPM intends to minimize the duration and impact of interim payments, how many retirees have experienced underpayments and how they're being notified, what OPM is doing to promote early retirement filing, and what, if any, additional resources OPM may need to be successful in this effort," the letter stated.

Springer added that fixing the system is "a sign of good management that I think American taxpayers deserve."

Chad Bungard, spokesman for the House Government Reform Subcommittee on Civil Service and Agency Organization, said members are still waiting for a response from OPM and are determined to "make sure that they get the job done."

Leaders of the National Active and Retired Federal Employees Association, an organization whose mission is to protect and improve the retirement benefits of federal employees, met with OPM officials in July to discuss the issue of underpaid retirement annuities and said they were pleased with the agency's level of commitment to change toward expediting the process.