Bush seeks upgrade of retirement benefits processing

President Bush proposed an additional $26.7 million this week to modernize the federal retirement system, with a goal of authorizing requests for new retirement benefits within five days and achieving at least 95 percent accuracy in payments.

The money will be used to "greatly improve the speed and accuracy of federal retiree benefit payments," according to Bush's 2007 budget, unveiled Monday. Many federal retirees find it takes months until they receive an accurate annuity payment after they retire.

The Retirement Systems Modernization, as the project is known, will convert "millions of paper retirement records to electronic data and contract for the information technology needed for the system," the Office of Personnel Management stated in a budget document.

OPM's Chief Financial Officer Clarence Crawford told reporters Wednesday that the increase is especially gratifying in a year when the president is proposing major cuts in many domestic agencies.

The increase "demonstrates the administration's value and commitment to the Retirement Systems Modernization." Crawford said. "That got the lion's share of the increase. For [a] domestic agency to have gotten that kind of increase shows the full support of the administration."

OPM's total discretionary budget received a proposed net increase of $17.2 million from the fiscal 2006 funding enacted by Congress. The agency is funding almost $14 million of its requested discretionary increase through internal offsets.

When Linda Springer took over as OPM's director last summer, she said resolving the annuity delays was "right at the top of the list" of her goals.

"If you've moved from place to place, several agencies -- 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 at the time. "That's a system that needs to be fixed . . . It's more back-office . . . a sign of excellence, a sign of good management that I think American taxpayers deserve."

In addition to the retirement modernization project, OPM is seeking $1.5 million for more employees to process annuities until the new system is brought online. OPM said it anticipated taking 18 to 36 months to complete the upgrade once the agency awards the contract.

A modernized system will allow the government to tabulate benefits for new retirees in five days or less, OPM said. The system also will improve accuracy of the claims from 90 percent to 93 percent in the older Civil Services Retirement System and from 95 percent to 97 percent in the Federal Employee Retirement System.