OPM begins prep for annual retirement surge

The Office of Personnel Management on Friday announced new plans aimed at helping the federal government’s HR agency better weather the annual surge of retirement applications from departing federal employees that occurs each winter.

Between January and March of each year, OPM sees a significant spike in the number of retirement applications it receives from federal workers departing government. Just this year, the agency saw a more than 100% increase in new claims between December 2022 and January 2023. The end result is an increase to the backlog of pending claims that can take months to dig out from.

That backlog has long been a pain point for the HR agency, which until recently has struggled to devise a plan to modernize the retirement process to make it less dependent on paper forms and OPM’s infamous cavern of employee records in Pennsylvania. But in September, OPM released a long-awaited IT strategic plan, which includes the creation of a pilot “digital retirement system,” electronic retirement records and an online application process by 2026.

In the meantime, OPM Director Kiran Ahuja has made finding other ways to streamline the retirement process a priority. Last spring, the agency unveiled a new guide to help retiring federal workers understand the timeline associated with various aspects of processing their claims, as well as a series of tips to avoid errors that can lead to processing delays. The backlog of pending retirement applications has hit six-year lows on two separate occasions this year, once in June and most recently in September.

In a memo to agency heads Friday, Ahuja tasked federal agencies with a series of tasks aimed at making it easier for OPM to handle the annual retirement wave. Additionally, OPM will increase “staff capacity” to handle the surge in applications.

“As OPM director, I am requesting your agency’s assistance in this process,” she wrote. “On average, more than a quarter of all applications submitted to OPM for adjudication are submitted with errors that delay annuitants’ receipt of their full retirement annuity. The best way to reduce these delays is to ensure that applications are free from errors before they are submitted to OPM, and for agencies, payroll providers and OPM’s Retirement Services to work closely to address questions and errors in a timely manner.”

Ahuja wrote that OPM has developed a “monthly error report” to track how errors are impacting the backlog of pending cases and as a “starting place” for agencies to work together on possible solutions.

Additionally, Ahuja asked agencies to improve their own HR processes to reduce unnecessary processing delays. She called on agencies to provide OPM with estimates of how many employees they expect to submit retirement applications between December and March, as well as to ensure that retirement packages are submitted to OPM within 32 days of an employee’s departure from government.

“While OPM begins counting processing time upon receipt of a retirement application package, the gap between retirement and receipt to OPM adds to the time a retiree waits for their first payment,” Ahuja wrote. “Expediting this process can provide a better and faster experience for annuitants.”

The memo also tasks agencies will implementing their own “quality assurance processes” that would review each retirement application before it is sent to OPM, so that errors can be corrected earlier in the process and potentially avoiding lengthy delays caused by incorrect or incomplete information. And it encourages agency HR employees to brush up on their knowledge of the retirement process by attending OPM’s annual training on the topic.

“Completed applications can be processed in as little as 30 days compared to those with mission documentation or information, which can take much longer,” Ahuja wrote. “Internal quality assurance at the agency level will reduce errors and shorten processing times. OPM is similarly committed to reducing error rates and working collaboratively with agencies and payroll providers to answer questions and resolve errors more quickly.”