Witnesses tell of progress and problems with federal retirement system

Joe Davidson
Columnist May 9, 2013

The House hearing on federal retirement services was about as fascinating as it sounds, certainly much less explosive than it could have been given some of the testimony.

In a nutshell, witnesses said that while retirement processing has improved from its worst days, it could deteriorate because of budget cuts, and that management needs to get much better at stopping improper payments and figuring out how to modernize the system.

Joe Davidson writes the Federal Diary, a column about the federal workplace that celebrated its 80th birthday in November 2012. View Archive

Questioning from the Oversight and Government Reform subcommittee on the federal workforce was not aggressive, so it seemed curious when Kenneth Zawodny scurried from the congressional hearing room as if he had something to hide. With other Office of Personnel Management (OPM) staffers attempting to form a protective shield around him, Zawodny, the agency’s retirement services director, hurried to the Rayburn House Office Building elevators like a cat being chased by dogs.

The dogs in this case were reporters trying to get answers to questions not fully probed during the hearing.

Zawodny’s hasty exit, attributed to another appointment, only served to draw more attention to those parts of the hearing that focused on the deficiencies of OPM’s leadership in solving enduring troubles with the retirement system.

Some of the testimony was stinging.

But first, the good news.

OPM cut the retirement claims backlog by 57 percent in 2012, and the average time to process a claim dropped from 156 days to 136, according to Zawodny. There was a 41 percent drop in the backlog from April 2012 to April 2013.

“Let’s give credit where credit is due. OPM laid out a strategic plan that predicted improvements in claims processing through additional staff, longer call center hours and better communication with agencies. OPM implemented the plan as intended, and it has worked,” said Joseph A. Beaudoin. He’s president of the National Active and Retired Federal Employees Association (NARFE) and is in a position to know.

“The inventory of claims has dropped to roughly 30,000,” from 61,00, he told the panel. “OPM has outpaced its projections for claims processing every month, with the exception of December 2012.”

In testimony last year, Beaudoin told the Senate that NARFE was getting hundreds of complaints each month about long waits to get full annuity payments and about an OPM unresponsive to retirees.

Now, the organization gets about 10 complaints a week. “It is a stark and noticeable difference from where it was a year ago,” Jessica Klement, NARFE’s legislative director, said by e-mail.

That should make Zawodny and other OPM leaders proud.

Unfortunately, it’s not a difference that Jay Resnick has noticed. He retired on Nov. 8 and started getting partial retirement payments the next month, but he is still waiting to be made whole. “[I] still have not heard anything — six months after retiring,” he said by e-mail. He has called OPM, “but the phone has been busy each time. Very frustrating.”

The budget cuts known as sequestration will make it even more frustrating.

Reduced funding leads to reduced overtime, and that means “reduced response rates and a decrease in service levels,” Zawodny said. “Over the last year or so, hold times in the call center have improved by 4 or 5 minutes, but these sorts of improvements will quickly be negated.”

OPM’s leaders have no control over the sequester, but they could do a better job over what they do control, according to a couple of government witnesses who have examined the retirement system.

Agency Inspector General Patrick E. McFarland scathed OPM leadership for “egregious improper payments” to dead people, totaling more than $100 million each year.

Though McFarland acknowledged the improper payment rate is much lower than other large federal programs, he said “senior leadership within OPM, and specifically RS (retirement services), has not demonstrated a sustained commitment to establishing an active and continuing effort to address improper payments made to deceased annuitants.” He strongly criticized OPM’s leadership, which must include former OPM director John Berry, who left his term-limited office last month, for “neglecting an issue that can save the taxpayers millions of dollars.”

Valerie Melvin, an official with the Government Accountability Office (GAO), spoke about “management weaknesses” identified in a series of reports on OPM’s failed efforts to modernize the retirement system. Those efforts date back more than 20 years, well before the agency’s current leadership. The GAO report released at the hearing also noted the progress that OPM has made in automating parts of the retirement application process.

Despite the criticisms, the hearing’s testimony as a whole gave Zawodny something to run with. He has worked hard to correct a long-standing problem, and NARFE’s endorsement counts.

Yet this was Zawodny’s response to McFarland’s criticisms: “I have no reaction.”

He’s got to defend his work better than that, if it is, in fact, worth defending.

Twitter: @JoeDavidsonWP

Previous columns by Joe Davidson are available at wapo.st/JoeDavidson.

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