OPM proposes new rules for electronic retirement system

The Office of Personnel Management has issued a proposal aimed at accommodating changes associated with implementing its new electronic retirement record-keeping system.

The proposed rules, published last week in the Federal Register, would authorize alternative methods for processing retirement, health and life insurance applications, notices, elections, and other records under the agency's Retirement Systems Modernization project. Certain regulatory provisions governing benefits processing are incompatible with the effort to modernize the retirement system, OPM said in the notice.

The rules, which request public comment by Sept. 17, would permit OPM to obtain information such as signatures, retirement forms and other records electronically. The new rules would allow such forms, "which would otherwise be required to be made in writing, to be submitted in whatever form the director of OPM prescribes, including electronically," the notice stated.

The rules also would give employees planning to retire 35 days from the date of their notice of retirement to change any survivor benefit elections. Current regulations set the deadline for changing survivor elections to the date of the first regular monthly payment or final adjudication, according to OPM.

The modernization project is intended to improve the quality and timeliness of services to federal retirees and the more than 3 million active employees in the Civil Service Retirement System and the Federal Employees Retirement System. Under the current paper-based record-keeping system, it often takes months for retired federal employees to receive the correct annuity payment.

The project will enable federal employees and retirees to access their retirement and insurance records online and to use Web-based tools that will provide enhanced retirement and insurance counseling. "The most important features are that employees will receive better and faster service when they retire, and they will receive the full amount of their earned annuity," said Robert Danbeck, managing director of the project at OPM. "In other words, no estimated payments."

OPM has made modernization one of its top funding priorities. Thus far, the House has appropriated $26.5 million for the project in fiscal 2008, while the Senate Appropriations Committee has approved $27.5 million.

The personnel agency is planning to bring General Services Administration employees into the electronic records system by February 2008 as part of its first wave of conversion. Four additional migration waves will follow the launch, gradually bringing information for all active federal employees into the retirement system by February 2009, Danbeck said.

In May 2006, 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 the system. Integic Corp. of Chantilly, Va., a subsidiary of Northrop Grumman Corp., won an agreement to digitize the employee records.