Computer Modernization Is Making Pension Payments EZ

By Stephen Barr
Wednesday, April 2, 2008

RetireEZ seems to be living up to its name, based on early returns.

The computer system, which began operating in February, is allowing the Office of Personnel Management to pay full pension benefits on time, instead of only partial benefits to new retirees, the office said yesterday.

The OPM said it compared 34 pensions awarded by the new computer system with those based on paper records and concluded that the technology upgrade provided the right amount within 30 days of an employee's retirement.

"We are pleased to report the majority of cases that processed to date under RetireEZ matched the legacy calculation," Linda M. Springer, the OPM director, said in a statement.

Springer is scheduled to appear today before the House Appropriations financial services subcommittee, chaired by Rep. Jos┬┐ E. Serrano (D-N.Y.). The computer modernization project will likely be among the topics discussed because congressional auditors have raised questions about its cost and performance.

The OPM said yesterday that it had reviewed the project's costs and determined that a previous estimate included several million dollars of spending before fiscal 2006 that was not related to the modernization.

A revised estimate, the OPM said, shows that $106.5 million has been spent on planning and acquisition and that an additional $254 million will be spent on operations and maintenance through 2016.

For years, the OPM has provided new retirees with interim pension payments as it tried to pull together paper records and reconstruct employment histories. The hunt for personnel files often took months, forcing retirees to wait for correctly calculated pension checks, usually for larger amounts.

The OPM's workload picked up as an increasing number of federal employees, mostly baby boomers, filed claims. The OPM administers retirement systems for about 3 million government workers and 2.5 million government retirees and their survivors.

The paper-based administrative process "was doomed to deteriorate with the onset of the pending retirement wave," the OPM said yesterday in a progress report on the modernization project.

The automated system can make up to 150 distinct calculations when figuring out the correct annuity for a new retiree, the OPM said.

The first phase of the project involves about 26,000 employees paid through a General Services Administration payroll processing center. Subsequent phases will cover the rest of the executive branch, the Postal Service, and the legislative and judicial branches.

In response to concerns raised by the Government Accountability Office, the OPM said it added personnel to conduct tests on the new computer system, find defects and fix them. A contractor also will verify that system components are functioning.

As more records are converted to the new system and the volume of claims grows, "we expect to encounter additional challenges," the OPM said in the report. "Each will be identified, acted upon and brought to resolution."

NARFE's Employee Seminar

The nine chapters of the National Active and Retired Federal Employees Association in Montgomery County are sponsoring their third seminar for current federal employees on Saturday.

A financial adviser and a NARFE benefits expert will discuss factors that federal employees should consider as they plan for retirement. Dick Strombotne and Charles Thomas, president and vice president of NARFE's Maryland Federation, will discuss federal and state legislative issues. The seminar will be held from 9:30 a.m. to noon at the Bauer Drive Community Center, 14625 Bauer Drive, Rockville.

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