The Benefits of Retirement Counseling

I recently received an email from an employee that highlights a key issue: the loss of the personal contact that used to be the norm for retirement counseling in most federal agencies. Starting in the 1990s, the consolidation and centralization of retirement services and pre-retirement counseling has become ever more common in agencies.

The email I received included a response from a federal human resources manager to a suggestion that someone from HR be made available for retirement counseling appointments at the agency’s Washington office:

Thank you for the suggestions but unfortunately they are not feasible due to budgetary constraints. As you are aware, our agency has 11 regions situated throughout the United States and we have Benefits and Retirement Specialists available to employees in every region. I would like to point out that in FY17 my team provided over 1,800 retirement estimates to customers throughout the agency and we processed over 380 retirements to OPM; and so far in FY18 we have provided over 770 retirement estimates and have processed 200 retirements to OPM. The excellent service we provide is not only for employees located in the DC area; we consider the needs of the entire agency—thus, it would not be fair to other employees located outside of the DC area if we were to provide such service to only DC employees.

We have an excellent reputation with our customers in respect to the counseling and education we provide, regardless of how we deliver the benefits and/or retirement-related information. Because the team is located together, we are able to train together and discuss policy changes as a team. Another benefit being centrally located is that the team of experts sits together and is able to conduct three thorough quality reviews to every application that is processed prior to submission to OPM for adjudication. This of course, directly results in former employees receiving their full annuities much quicker than the government-wide average of six to nine months because the packet we transmit to OPM is error-free.

I understand both the pride this manager feels in the service the HR office provides and the frustration about budgetary limits. But I had a few reactions to this response. First, according to OPM data, this agency (which will remain unnamed) does not always submit its cases error-free. It has a slightly above average error rate. In addition, the average processing time for a claim submitted to OPM is about two months, not six to nine months.

Face-to-face meetings are one way to help keep the error rate down and avoid processing delays. During such reviews, common errors such as missing records of health and life insurance coverage, failure to accurately complete a retirement application and unacceptable white-outs or corrections on forms can be caught and fixed. Until retirement forms become fully automated, these mistakes will continue to occur without proper retirement counseling.

As a federal retirement benefits specialist, I can understand the arguments for and against centralized retirement operations. Here are the benefits, from my point of view:

• Experienced retirement counselors can mentor those learning the ropes.
• Everyone being served will have a similar experience. Many agencies have components located across the country and around the world, making it virtually impossible to have trained staff at each location to provide individual counseling on-site.
• Video chats, telephone calls, emails, and other forms of electronic communication can, in theory, facilitate individualized service to employees.

On the other hand, having the option for face-to-face meetings with employees would provide the following advantages:

• Body language and facial expressions can help the retirement specialist know if the information conveyed is being understood.
• During a successful retirement counseling session, complicated issues such as the cost and value of survivor benefits, creditable service issues, and continuation of health and life insurance can all be discussed so the employee will make an informed decision.
• Generally, face-to-face meetings are less rushed, with more time allotted for questions and a review of the documents involved in the retirement plan.
• Individual meetings can take into account that people have different learning styles. For some people, hearing information is more effective than reading it.

Hopefully you have some form of retirement counseling available at your agency, whether in-person or electronic. Here are some tips to make the most of the services available to you:

• Keep your communications direct and clear when you are asking questions.
• Restate your question if you are having trouble understanding the answer you receive. You may also want to ask for a written reference to help provide further explanation.
• Take advantage of training opportunities that can help you find out what you don’t know.
• Allow time for your agency’s HR office to process your retirement application by submitting your request at least 30 days before your planned retirement date. In some cases, 90 days is recommended.
• Understand the role of your human resources office and your payroll office in the retirement process. They are generally not the primary source of information for Social Security retirement, Thrift Savings Plan withdrawals, financial planning, estate planning or tax planning. To understand the process a little better, review Chapter 40 of the CSRS and FERS Handbook: Planning and Applying for Retirement. It’s a useful guide.