We continue to receive horror stories from retirees waiting up to a year or more for OPM to process their retirement paperwork. It is a real problem even for those who thought they prepared knowing that delays were inevitable. David wrote us in early November stating that he retired September 30, 2010 and as of November 2, 2011 he was still receiving partial interim payments. The only paperwork that he received came on October 31, 2011. One of the documents was FEGLI life insurance form 2819 which stated that his FEGLI insurance was terminated from the date of his retirement; an election he did not make.
David expected delays and thought he had prepared financially. He put away sufficient funds to cover six months expenses to give OPM the time he thought they needed to process his paperwork. This is causing a considerable hardship for his entire family and he needed guidance on how to proceed. Retirement processing delays and errors could get much worse as agencies offer Voluntary Early Retirement Authority (VERA) incentives across the country.
Many Departments still don’t have a budget and there are rumors of cuts in many agencies, some estimate cuts of between 15-27 percent coming this year or next. Typically agencies plan for a 5 percent attrition rate not counting those who accept a VERA. VERAs could be as high as 10% or more of total staffing for some agencies especially if Voluntary Separation Incentive Payments (VSIPs) are offered. Agencies are calling these actions “Reduction in Force (RIF) abatement measures.” RIFs are historically difficult to manage and agencies avoid them if at all possible.
If a VERA with VSIP incentive is offered, agency retirement counselors and OPM will be swamped with applications; delays are inevitable. For example, an agency that typically processes 2000 retirements a year now has to process 4000 retirements in a 2-4 week VSIP period; it would be chaotic for the retirement counselors to say the least. Each retirement counselor suddenly has 150-200 retirement actions to process in two pay periods. Can you imagine one person counseling and reviewing retirement options for 200 people in a month, the potential processing delays, and the errors that will result from this mad rush?
What Can Be Done?
This delay is unacceptable by any measure. OPM has acknowledged processing delay problems in a memo they posted online. This document doesn’t provide immediate relief, it simply explains the many reasons for delays without providing any contact information for extreme cases. I wrote an article titled Interim Retirement Check Issues last April that you may find helpful. Here are a few things to consider when you are planning to retire:
- Review What to Do starting a Year Before I Retire and complete the needed actions.
- Thoroughly complete and review your retirement forms. OPM reported that 23 percent of all claims received are missing one or more records and 11 percent are not received during the first 30 days.
- Send in your paperwork, if at all possible, 3 to 6 months in advance of your planned departure date. This isn’t possible with VERAs because they typically have a much shorter window of opportunity to apply. (Keep a complete copy of your application for reference)
- Thoroughly review the package that your personnel office sends you for review. Check your SCD date, military time, and other pertinent data and make needed corrections.
- Review What to Expect the First Three Months After I Leave. If anticipated actions in this normal time line don’t correlate with your situation contact your personnel office and OPM immediately. This step can keep your personnel office and OPM on track.
- Set aside sufficient funds, six months minimum, for bills and emergencies and have other savings and investments that you can tap if processing delays are extreme like in this case. Read How to Be Financially Prepared When You Retire.
- If you have a divorce decree make sure OPM received a copy at the time of the divorce. Visit our Divorce Forum For more information on this issue. An improperly processed divorce decree can dramatically decrease interim and full annuity payments.
- To contact OPM about your retirement payments before you receive your claim number, contact your former payroll office first for the date your records were transferred to OPM. Your payroll office should provide you with the number and date of the Register of Separations and Transfers. You will also need your Payroll Identification Number.
In extreme cases, where you can’t get satisfaction through OPM or your benefits office, call or write your Congressman or Senator for assistance. Their staff can assist you with problems like this and they can expedite a resolution. If you can’t get a timely resolution call them for assistance.
Learn more about your benefits, employment, travel, and financial planning issues on our site and visit our Blog frequently at https://fedretire.net to read all forum articles.
Request a Retirement Benefits Summary Analysis from a local adviser. Includes projected annuity payments, income verses expenses, FEGLI, and TSP projections. A sample analysis is available for your review. This service is not affiliated with www.federalretirement.net
Visit our other informative sites
- Federal Government Jobs & Career Center
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- Take Charge of Your Federal Career (A Career Planning Workbook)
- The Book of U.S. Government Jobs (How to Apply for Federal Jobs)
The information provided may not cover all aspect of unique or special circumstances, federal regulations, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our articles are not intended nor should they be considered investment advice. Our reply is time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change.
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Dennis V. Damp is an author, retired federal manager, business owner, career counselor and veteran. Damp is the author of 28 books, a recognized benefits expert, and a retired federal manager with 35 years’ service. Dennis has been a guest on hundreds of radio talk shows, CNN’s YOUR MONEY and the Lou Dobbs Cable TV shows, lectured at universities and colleges, produced Internet web sites and training videos, and has written hundreds of articles for national magazines and newspapers. His books have been featured in the Wall Street Journal, Washington Post, New York Times and U.S. News & World Report.
Dennis joined the Air Force in 1968 and spent over three years on active duty and an additional seven years with the Air National Guard. He was hired by the Department of Defense (DOD) after leaving active duty and transferred to the Federal Aviation Administration (FAA) in 1975. He spent the remainder of his career in various positions with the FAA. His last position was technical operations manager at the Pittsburgh International Airport’s air traffic control tower.