House committee investigates pension backlog

Office of Rep. Blake Farenthold (R-TX) News Release

WASHINGTON – U.S. Representative Blake Farenthold (TX-27), Chairman of the House Oversight Subcommittee on the Federal Workforce, U.S. Postal Service and the Census, today held a hearing looking at the time it takes the Office of Personnel Management (OPM) to process federal worker pension claims.

“2.5 million retired federal workers and their survivors rely on their pension check every month to make ends meet. What’s shocking to me is that OPM, who administers these checks, does it the same way today that they did it in 1987. This lack of modernization has resulted in a backlog of 30,000 claims, while the OPM averages $100 million each year in payments to deceased annuitants and survivors. OPM’s processing of these claims is clearly not efficient and effective and just reinforces the government’s poor IT record,” said Congressman Farenthold in his opening statement.

“While the President’s budget recommends $2.6 million to fund a case management system, the budget is short on detail and provides little guidance on how OPM will achieve a modern system. We’ve seen hundreds of millions of dollars wasted in failed information technology contracts, yet reform still seems vague,” continued Rep. Farenthold.

The Subcommittee heard testimony from Mr. Patrick McFarland, Inspector General at the U.S. Office of Personnel Management, Mr. Kenneth Zawodny, Associate Director of Retirement Services at the U.S. Office of Personnel Management, Ms. Valerie C. Melvin, Director, Information Management & Technology Resource Issues, U.S. Government Accountability Office, Mr. Joseph A. Beaudoin, President, National Active and Retired Federal Employees Association, and Dr. George Kettner, President, Economic Systems, Inc.

During the questioning portion of the hearing, Congressman Farenthold spoke to the benefits of using technology to modernize and streamline OPM’s processing of retired federal employee pension claims.

“Do you see some things that OPM could do immediately to kick the technology up, save some time and get the claims processed faster?” Rep. Farenthold asked government IT expert Valerie Melvin.

“The approach that they are taking now, which we see as a very modest, incremental step…is probably a prudent and risked-based approach for them to take, given their inability to be successful with such initiatives in the past,” replied Ms. Melvin.

Congressman Farenthold asked the same question to Dr. Kettner, whose company, Economic Systems Inc., specializes in data entry software.

“I think there are certainly steps that could be taken immediately, and I think you’re entirely correct in thinking that more could be done at the agency level. That’s where the data comes from and where much more can be done. There is no reason in the world the data should not be given to OPM electronically,” concluded Mr. Kettner.

OPM has less than 60 days to achieve its short-term goal of reducing the backlog and processing 90 percent of claims within 60 days. In response to a question from Representative Farenthold about meeting this short-term goal, Mr. Zawodny expressed some insecurity but told the committee he was hopeful it could be met.

Read more: Factiva.

CSRS retirees get 3.6% COLA in January, FERS 2.6%

Federal News Radio reports that the Social Security Administration has confirmed that retirees will receive a 3.6% cost of living adjustment in January. The COLA also applies to federal pensioners:

Federal retirees under the old Civil Service Retirement System receive the full COLA amount.

However, there is a slightly different system for retirees under the Federal Employees Retirement System. If the COLA is more than 3 percent, FERS retirees will receive 1 percent less than the general increase. If the COLA is between 2 percent and 3 percent, FERS retirees receive just a 2 percent increase.

For example, with a COLA of 3.6 percent, FERS retirees can expect to receive a 2.6 percent increase.

However, most FERS retirees will not have the COLA applied to their annuity until age 62.

via Social Security announces 3.6 percent COLA – FederalNewsRadio.com.

Federal Times article exposes the Big Lie about “unfunded” federal pensions

To hear right wing pundits talk, you’d think the federal pension system was about to destroy America. That’s why millionaire politicians like Darrell Issa want to eliminate pensions for middle class working people (while clinging to their own more lucrative taxpayer financed retirement plans).

A recent Federal Times article discusses the “problem” in some detail, and comes to a surprising conclusion: there isn’t a problem!

But there’s no evidence to suggest federal pension plans are a financial bomb waiting to go off. That was defused when CSRS was ended, and since FERS is legally required to be fully funded, the unfunded liability will fade over time.

OPM and outside observers such as Adcock and Palguta aren’t the only ones saying the system is sound. The Congressional Research Service has published several reports in recent years on federal pension programs, all of which concluded the programs are on solid ground.

"Although the civil service trust fund has an unfunded liability, it is not in danger of becoming insolvent," CRS said in a January report.

Audit firm KPMG has consistently given OPM’s financial statements and retirement programs unqualified opinions, meaning they found no significant problems.

And the Government Accountability Office said in a 1995 report that CSRS’ flaws, which resulted in the unfunded liability, were resolved with the creation of FERS.

"Provisions have been made for the retirement fund to always have sufficient budget authority to cover future benefit payments," former Assistant Comptroller General Johnny Finch said at a House hearing.

via Fed pensions underfunded by $673B – FederalTimes.com.

USPS updates FAQs on specific RIF notices due to be mailed tomorrow

In advance of the mailing tomorrow of Specific Reduction in Force notices tomorrow, the US Postal Service has updated its Organizational Redesign FAQs with additional information on those notices. The following items were added today. Needless to say, this information may change, so if you are the recipient of a Specific RIF Notice, be sure to visit the official USPS page. Continue reading