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What challenges lie ahead for next OPM director?

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A hearing is set for today on the nominee to head the Office of Personnel Management, an agency dealing with both old and new challenges, including the impact on federal employees of budgetary sequestration.

The Senate Homeland Security and Governmental Affairs Committee is holding a confirmation hearing on Katherine Archuleta, who was the national political director for the 2012 Obama campaign. She previously held positions at the Labor, Energy and Transportation departments as well as with the city of Denver, among other jobs.

Among shorter-term goals, she said, will be addressing the agency’s long-running struggle to modernize its information technology systems, particularly in retirement record-keeping and processing. She also cited OPM’s role in overseeing the multi-state health insurance plans scheduled to be made available to the general public in 2014 under the Affordable Care Act. OPM has set standards for those plans that in some ways mirror the policies of the health insurance program for federal employees.

If confirmed, Archuleta would take over the role of federal personnel director as some agencies are requiring employees to take unpaid furlough days. That includes the largest, the Defense Department, which is requiring some 650,000 employees to take 11 days through September and recently warned of the potential for the more serious step of layoffs if its budget continues at post-sequestration levels next year.

OPM sets general policy on furloughs, reductions in force and many other workforce issues, although carrying out those policies is largely up to individual agencies.

OPM also controls the government-wide benefit programs and currently is running a special enrollment period arising from the U.S. Supreme Court decision in the Defense of Marriage Act case. That ruling made same-sex spouses and their children eligible for important federal employment-related benefits including health insurance coverage—a sign-up period for that continues through Aug. 26—as well as retirement survivor benefits—an enrollment period for that continues into June 2015.

In the months ahead, OPM also will need to wrap up negotiations with health plans in advance of the regular open season to be held in November-December.

Also just ahead is the need for final rules on “phased retirement” under which agencies could allow retirement-eligible employees to switch to half-time work while collecting half of their earned annuities, without an offset. The comment period on proposed rules expires Aug. 5.

Another set of proposed OPM rules, to overhaul the annual federal charity drive known as the Combined Federal Campaign, took criticism from many directions at a recent House hearing.

Congress also has been pressuring OPM to pare its backlog of retirement applications, which causes some new retirees to receive amounts lower than they have earned for many months while calculations are finalized. OPM has made progress in the last several years but the pace has slowed recently as it has cut back on overtime in its processing branch due to restrictions on its own budget.

Federal employees also have a stake in the ongoing deliberations over the budget for the fiscal year that starts in October. The White House has proposed increasing the required employee contributions toward their retirement benefits by 1.2 percentage points while a House budget plan would require an increase of about 5.5 percentage points; the Senate counterpart is silent on the issue.

Also to be decided in upcoming months is whether the first general federal raise will be paid in January after three years of a salary rate freeze. President Obama has proposed a 1 percent increase and appropriations bills being crafted in Congress so far are neutral. If they mention the issue at all, they say that if a raise is paid, agencies would have to absorb the cost from other funds.

Archuleta would be the first Latina to lead the agency; several prior directors were African American. OPM General Counsel Elaine Kaplan has been the acting director since John Berry’s term expired in mid-April.