By Joe Davidson
Wednesday, April 22, 2009
The Office of Personnel Management just can't seem to get this retirement thing right.
For more than two decades, the OPM has been trying to modernize retirement planning for federal employees. But despite some serious efforts, "the agency's retirement modernization initiative remains at risk of failure."
That's what the Government Accountability Office said in a report released yesterday. Essentially, it blames bad management.
With a tone that hints at exasperation, yet without forfeiting its professionally detached approach, the GAO documents a series of problems with the OPM's attempt to move away from a paper-and-pencil system (or should that be rock and chisel?) to one that uses today's technology to improve the retirement process and customer service.
"We have an elevated level of concern," Valerie C. Melvin, director of information management and human capital issues at the GAO, said in an interview.
Now it's up to John Berry, who took over as OPM director on April 13, to straighten out this mess. To his credit, and probably because he's not to blame for any of this, he did not get defensive and mealy-mouthed in his response to the GAO findings.
"As OPM's new Director," he wrote in an 11-page letter to the GAO last Wednesday, "I consider one of my first and most important responsibilities to get this program fixed and working so that the retirement experience for government employees is as simple and seamless as current technology allows."
Linda M. Springer, who had Berry's job for three years until last summer, had no comment about the program with a catchy name -- RetireEZ.
Fixing it will be no simple task. The OPM will need much stronger management for the program. Consider these section headlines starting on Page 14 of the report:
-- "OPM Does Not Have a Complete Plan for the Future of the RetireEZ Program."
-- "OPM Is Not Positioned to Effectively Manage Its Retirement Modernization Initiative."
-- "OPM Has Yet to Complete Key Steps in Developing a Reliable Cost Estimate for Retirement Modernization."
-- "OPM Has Not Established Processes Needed to Effectively Develop and Manage Retirement Modernization Requirements."
-- "OPM Is Not Positioned to Effectively Manage Retirement Modernization Testing."
-- "OPM Is Not Providing Effective Oversight for Retirement Modernization."
You get the idea.
The OPM had hoped to make retirement planning easier for federal employees, but there has been nothing easy about implementing RetireEZ.
In October, the OPM cut its losses when it killed a $290 million, 10-year contract with Hewitt Associates, which was to have developed an advanced retirement calculator to speed the processing of claims by annuitants. The agency had stopped work related to the contract in May when testing indicated the program wasn't working well.
Only two of eight goals related to modernizing retirement planning have been partially met, the report says. "Further, OPM has not yet developed a complete plan that describes how the program is to proceed without the system that was to be provided under the terminated contract," the GAO added.
As the OPM has tried to modernize its retirement system, it has not always heeded GAO recommendations as it said it would. In January 2008, the GAO said the OPM should fully test RetireEZ, correct system defects and improve cost estimates.
"In response to our report, OPM stated that it concurred with our recommendations and was taking steps to address them," the GAO said. Yet, as of last month, "these recommendations still had not been fully addressed."
This matters to no small group of people. Currently, there are 2.5 million federal retirees, and 600,000 more are expected by 2016, the GAO reported, citing OPM data. A new system is needed because the paper-based one has a high number of errors, which could lead to mistakes in benefit payments, according to the report.
Furthermore, it says the manual system restricts customer service, limits employee access to retirement records and is so bad that "attracting qualified personnel to operate and maintain the antiquated retirement systems . . . is challenging."
In one cryptic line, the GAO hinted that the problems found in the OPM retirement system could stretch into other areas.
"Institutionalizing effective management is critical not only for the success of this initiative," the GAO wrote, "but also for that of other modernization efforts within the agency."
Take note, John Berry.
The GAO report can be found at http://www.gao.gov/new.items/d09529.pdf.
Contact Joe Davidson at email@example.com.