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ADDRESSING THE BACKLOG IN THE FEDERAL 

EMPLOYEE RETIREMENT PROCESS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON FEDERAL WORKFORCE, 

U.S. POSTAL SERVICE AND THE CENSUS 

OF THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

DECEMBER 10, 2014 

Serial No. 113–162 

Printed for the use of the Committee on Oversight and Government Reform 

( 

Available via the World Wide Web: http://www.fdsys.gov 

http://www.house.gov/reform 
(II) 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM 

DARRELL E. ISSA, California, Chairman 

JOHN L. MICA, Florida 

MICHAEL R. TURNER, Ohio 

JOHN J. DUNCAN, JR., Tennessee 

PATRICK T. MCHENRY, North Carolina 

JIM JORDAN, Ohio 

JASON CHAFFETZ, Utah 

TIM WALBERG, Michigan 

JAMES LANKFORD, Oklahoma 

JUSTIN AMASH, Michigan 

PAUL A. GOSAR, Arizona 

PATRICK MEEHAN, Pennsylvania 

SCOTT DESJARLAIS, Tennessee 

TREY GOWDY, South Carolina 

BLAKE FARENTHOLD, Texas 

DOC HASTINGS, Washington 

CYNTHIA M. LUMMIS, Wyoming 

ROB WOODALL, Georgia 

THOMAS MASSIE, Kentucky 

DOUG COLLINS, Georgia 

MARK MEADOWS, North Carolina 

KERRY L. BENTIVOLIO, Michigan 

RON DESANTIS, Florida 

ELIJAH E. CUMMINGS, Maryland, Ranking 

Minority Member 

CAROLYN B. MALONEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

JOHN F. TIERNEY, Massachusetts 

WM. LACY CLAY, Missouri 

STEPHEN F. LYNCH, Massachusetts 

JIM COOPER, Tennessee 

GERALD E. CONNOLLY, Virginia 

JACKIE SPEIER, California 

MATTHEW A. CARTWRIGHT, Pennsylvania 

TAMMY DUCKWORTH, Illinois 

ROBIN L. KELLY, Illinois 

DANNY K. DAVIS, Illinois 

TONY CARDENAS, California 

STEVEN A. HORSFORD, Nevada 

MICHELLE LUJAN GRISHAM, New Mexico 

Vacancy 

LAWRENCE J. BRADY, Staff Director 

JOHN D. CUADERES, Deputy Staff Director 

STEPHEN CASTOR, General Counsel 

LINDA A. GOOD, Chief Clerk 

DAVID RAPALLO, Minority Staff Director 

SUBCOMMITTEE ON FEDERAL WORKFORCE, U.S. POSTAL SERVICE AND THE CENSUS

BLAKE FARENTHOLD, Texas, Chairman 

TIM WALBERG, Michigan 

TREY GOWDY, South Carolina 

DOUG COLLINS, Georgia 

RON DESANTIS, Florida 

STEPHEN F. LYNCH, Massachusetts, 

Ranking Minority Member 

ELEANOR HOLMES NORTON, District of 

Columbia 

WM. LACY CLAY, Missouri 
(III) 

C O N T E N T S 

Page 

Hearing held on December 10, 2014 ...................................................................... 1 

WITNESSES 

Mr. Kenneth J. Zawodny Jr., Associate Director of Retirement Services, U.S. 

Office of Personnel Management 

Oral Statement ................................................................................................. 4 

Written Statement ............................................................................................ 6 

Ms. Valerie C. Melvin, Director, Information Management and Technology 

Resource Issues, U.S. Government Accountability Office 

Oral Statement ................................................................................................. 12 

Written Statement ............................................................................................ 14 

Mr. Richard G. Thissen, President, National Active and Retired Federal Employees Association 

Oral Statement ................................................................................................. 32 

Written Statement ............................................................................................ 34 

(1) 

ADDRESSING THE BACKLOG IN THE 

FEDERAL EMPLOYEE RETIREMENT PROCESS 

Wednesday, December 10, 2014 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON FEDERAL WORKFORCE, U.S. POSTAL

SERVICE, AND THE CENSUS, 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 1:28 p.m., in room 

2154, Rayburn House Office Building, Hon. Blake Farenthold 

(chairman of the subcommittee) presiding. 

Present: Representatives Farenthold and Lynch. 

Staff present: Melissa Beaumont, Assistant Clerk, Jennifer Hemingway, Deputy Policy Director; James Robertson, Senior Professional Staff Member; Andrew Shult, Deputy Digital Director; Peter 

Warren, Legislative Policy Director; Una Lee, Minority Counsel; 

and Juan McCullum, Minority Clerk. 

Mr. FARENTHOLD. The committee will come to order. 

As is traditional with this committee, before we start out, we will 

read the Oversight Committee’s mission Statement. 

We exist to secure two fundamental principles: First, Americans 

have a right to know the money Washington takes from them is 

well spent. And, second, Americans deserve an efficient, effective 

government that works for them. Our duty on the Oversight and 

Government Reform Committee is to protect those rights. 

Our solemn responsibility is to hold government accountable to 

taxpayers, because taxpayers have a right to know what they get 

from their government. We will work tirelessly in partnership with 

citizen watchdogs to deliver the facts to the American people and 

bring genuine reform to the Federal bureaucracy. This is the mission of the Oversight and Government Reform Committee. 

I will now recognize myself for a short opening Statement. 

The Office of Personnel Management, OPM, is responsible for administering the Federal retirement program, which provides 

monthly pension checks to 2 1/2 million retired Federal workers 

and their survivors. 

Counter to private-sector practice, where software and computer 

systems apply complex business rules to unique data, recent annuitants continue to wait their turn in a backlog of claims before receiving their earned pensions. For individuals applying for disability retirement and survivors applying for a lump-sum death 

benefit, the wait is particularly long. 
2 

I remain puzzled why processing a Federal retirement package 

remains paper-based while products such as TurboTax help millions file their complicated tax returns quickly and electronically. 

Since 1987, the OPM has failed at its attempts to bring a modern 

approach to how the Federal Government pays Federal workers 

and their pensions. In February, the OPM issued a Strategic Information Technology Plan that discusses a paperless system, but, in 

reality, it seems that the system, if successfully implemented, will 

maybe result in less paper, not be paperless. 

I applaud the hard work that has been put in in the past few 

years under your leadership, Mr. Zawodny. However, I am troubled 

by the fact that this reduction, cutting the backlog in half, relies 

on hiring additional staff to operate a patchwork paperwork facility 

with more than 80-plus legacy systems. 

You all got $2.6 million to improve retirement system processes 

but have only spent $800,000. I would like to believe that that is 

a result of good, conservative financial management, but I am 

afraid that the strategic technology plan is short on detail, lacks 

detailed information. 

There are implementation schedules that stakeholders, including 

the taxpayer, can use to monitor the progress, and I am looking 

forward to hearing whether the OPM is ready and capable of 

achieving true reform and getting some technology in there. 

I realize and I have said many times that the Federal Government has trouble computing its way out of a paper bag. But some 

of the systems that I have read about and heard about in the OPM 

were stuff submitted electronically, printed out, processed, rescanned. It really seems like there is a great opportunity for improving efficiency, getting folks the money that they have earned 

in a timely fashion, and cutting down on the expense and time associated with processing. 

I will now recognize my ranking member, Mr. Lynch, for his 

opening Statement. 

Mr. LYNCH. Thank you very much, Mr. Chairman, for holding 

this hearing to examine the progress made by the Office of Personnel Management in addressing the backlog and timeliness in 

the processing of Federal retirement claims since the last time we 

held a hearing on this issue back in 2013. 

These last few years have been especially hard on Federal employees, who have had to endure an onslaught of attacks from some 

Members of Congress on their pay, benefits, and due-process rights. 

So I am certainly pleased that Chairman Farenthold and I can 

agree that Congress and OPM must ensure that our Federal employees receive timely and accurate pension payments upon their 

retirement. Our Nation’s dedicated public servants deserve no less. 

And the chairman and I are both sensitive to the financial hardships that a backlog and long delays in claims processing may 

cause and have caused some Federal retirees. 

I want to commend OPM for successfully achieving its 2012 strategic plan goal of reducing the retirement claims backlog to a manageable level, which was earlier 60,000 claims backlogged in January 2012 to just 14,000 claims at the beginning of this month. 

I know the sequestration made that accomplishment harder to 

achieve, and a large increase in retirement application resulting 
3 

from the early retirement and buyout offers from the Postal Service—my sister was one of those retirees. She took the early out. 

She didn’t help matters either. 

While I believe that OPM has made great strides in reducing its 

backlog, it still falls short of the goal to process 90 percent of new 

retirement claims within 60 days, having only reached 83 percent. 

I know that progress has been made. As of last month, it remained 

at 83 percent, but we’ve got to work on that. 

And while I think OPM’s incremental approach to modernizing 

its retirement claims makes sense, it appears that the agency is 

making much slower progress on this front as we go forward. But, 

again, the effect of the early retirement issue with the Post Office, 

that added a historically large amount of claims at one point, and 

also the effect of sequestration might have exacerbated the problem 

beyond what we see here. 

OPM has noted that implementation of many of the IT initiatives 

spelled out in OPM’s February Strategic Information Technology 

Plan are dependent upon the receipt of sufficient funding. And I 

would like to explore in this hearing the support that OPM would 

need from Congress to ensure that it can modernize its retirement 

claim systems. I believe that the long-term sustainability of OPM’s 

progress will depend heavily upon a transition from a paper-based, 

manual process to an electronic process. 

Thank you, Mr. Chairman. I appreciate the opportunity to revisit 

the status of OPM’s retirement claims processing, and I look forward to hearing from our panel members. 

Thank you. I yield back. 

Mr. FARENTHOLD. Thank you very much. 

Mr. FARENTHOLD. Members will have 7 days to submit their 

opening Statements and extraneous material for the record. 

Mr. FARENTHOLD. I would now like to take this opportunity to 

welcome our witnesses. 

Ken Zawodny serves as the Associate Director of Retirement 

Services at the U.S. Office of Personnel Management. 

Welcome, sir. 

Donna Seymour serves as Chief Information Officer at the U.S. 

Office of Personnel Management. 

Ms. Seymour, welcome. 

Valerie Melvin serves as the Director of Information Management and Technology Resource Issues at the GAO. 

And Richard Thissen serves as president of the National Active 

and Retired Federal Employees Association. 

Pursuant to committee rules, all witnesses will be sworn in before they testify. 

Would you all please rise and raise your right hand? 

Do you solemnly swear or affirm that the testimony you’re about 

to give this committee will be the truth, the whole truth, and nothing but the truth? 

Let the record reflect that all witnesses answered in the affirmative. 

Please have a seat. 

We do have votes scheduled to come up. I would like to get 

through as much of this as we can. We may get it finished before 
4 

votes if the House runs typically behind schedule, as it normally 

does. If not, we may have to leave for votes and then come back. 

But in order to facilitate that, let’s make sure we’ve got some 

time for discussion. We will follow the 5-minute rule, let you all 

give your 5-minute summary of your written testimony, and then 

we’ll then proceed to questions. 

So we’ll get started with Mr. Zawodny. 

WITNESS STATEMENTS 

STATEMENT OF KENNETH J. ZAWODNY, JR. 

Mr. ZAWODNY. Thank you. Good afternoon, Chairman 

Farenthold, Ranking Member Lynch, and members of the subcommittee. Today I would like to—— 

Mr. FARENTHOLD. Can you come a little closer to the microphone? You’ve kind of got to get up really close to be heard. 

Mr. ZAWODNY. Today I would like to discuss the progress of OPM 

in reducing the inventory of the Federal retirement claims as well 

as further automating the claims process. 

OPM is responsible for processing over 120,000 retirement applications a year from all 3 branches of the government and dozens 

of independent agencies. Aside from processing new incoming retirements, OPM also handles post-retirement human-resource functions for 2.5 million Federal annuitants, survivors, and their family 

members. 

In January 2012, OPM released and began implementation of a 

retirement strategic plan to reduce the inventory of retirement 

claims, and we remain on track and focused on the goal of adjudicating 90 percent of those claims within 60 days. Today the retirement claims inventory is down to about 9,500 cases from January—from February 2014. We are now processing 83.4 percent of 

those claims in under 60 days. 

Director Archuleta is committed to improving retirement services 

at OPM. There are three areas targeted for reform: process, customer service, and IT solutions. 

The process team is focused on identifying opportunities to gain 

efficiency in the processes pertaining to the post-adjudicative workload. Process improvements will lead to more timely actions and a 

reduction in the potential for improper payments. We have mapped 

out and evaluated current processes, and we review the data collected in order to identify improvement opportunities. 

Additionally, the customer service team is studying current processes and customer behavior. The team has made multiple visits to 

different RS facilities and conducted numerous interviews with current and future retirees. Based on the research, we are focusing 

our attention on OPM’s online services. Interview results show that 

customers who utilize retirement services’ online services are very 

satisfied with those particular services and activities. The key is to 

drive more people to the online services and to further improve 

those services and experiences for the customers. 

We also continue to review and improve our call center support. 

Recent statistics show that the average speed to answer calls for 

the last quarter of Fiscal Year 2014 was improved by 30 percent. 
5 

Our call-handling volume has increased to 41 percent, and we have 

been able to reduce the amount of busy signals by 91 percent. 

We have also reached out to customer service agencies, like the 

Social Security and Department of Defense, who have similar annuitant populations to exchange information and ideas on how to 

better serve all of our customers. 

Fulfilling a promise she made during her confirmation hearing, 

Director Archuleta produced a strategic IT plan for OPM within 

100 days of becoming the Director. In accordance with this plan, 

our goal is to deliver iterative capability that will yield near-term 

results and can be built upon over time as we continue to work toward a full automation solution. We are currently focused on procuring a case management system to track business workflows, 

which increase transparency and efficiencies. This would create the 

foundation for a fully automated system of the future. 

In Fiscal Year 2015, we plan to release a solicitation for award 

of a case management system and begin configuration of that tool. 

Our effort will include an online retirement application that will 

help agencies ensure they submit a completed retirement application thoroughly and make information more accessible to personnel 

planning for their retirement. 

Currently, we will complete a pilot project with payroll service 

providers for accepting payroll data from shared service centers 

using a standardized data format. Throughout 2015 and 2016, we 

will automate further functions currently performed by the mainframe, such as annuity calculations and routines to send payment 

information to the Treasury. 

Transitioning from the mainframe to a distributed computing environment will save money and increase our ability to make 

changes to the system in a timely and efficient manner. OPM has 

made significant progress in reducing retirement claims inventory 

and modernizing our retirement process. We expect to continue this 

process; however, we understand that challenges do remain. 

Thank you for the opportunity to testify today, and I look forward to answering any questions you may have. 

Mr. FARENTHOLD. Thank you very much. 

[Prepared Statement of Mr. Zawodny and Ms. Seymour follows:] 
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Mr. FARENTHOLD. Now, Ms. Seymour, was your Statement included with Mr. Zawodny, or do you have some additional—anything additional to add? 

Ms. SEYMOUR. Mine was included. Thank you. 

Mr. FARENTHOLD. Thank you. 

Ms. Melvin, you are up. 

STATEMENT OF VALERIE C. MELVIN 

Ms. MELVIN. Good afternoon, Chairman Farenthold, Ranking 

Member Lynch, and members of the subcommittee. Thank you for 

inviting me to testify on OPM’s system for processing Federal employee retirement benefits. 

As we all know, OPM has a critical mission to serve current and 

retired Federal employees, and information technology is integral 

to this responsibility. 

As agreed with your staff, my testimony today summarizes findings that we have previously reported on OPM’s efforts and challenges to modernize systems supporting the retirement process and 

also briefly speaks to its current plans for acquiring new technology. In addition, based on other work that we have undertaken, 

I will briefly highlight key IT acquisition success factors that, 

based on selected agencies’ experiences, have proven helpful in carrying out IT acquisitions. 

In three reports that we have previously issued, we noted that 

OPM’s attempts to modernize its systems were hindered in large 

measure by ineffective IT planning, management, and execution. 

Weak project management, to include ineffective system testing, 

the absence of a process to identify and mitigate project risks, and 

the lack of a fully functioning oversight body to monitor the modernization projects were among a number of factors that contributed to various stops and starts since 1987 and then to the agency’s termination of the retirement modernization program in February 2011. 

In January 2012, the agency released a plan describing targeted 

incremental steps that would include making IT improvements to 

automate retirement application processing. It Stated a goal, as 

you have already mentioned, of processing 90 percent of new claims 

within 60 days by July 2013 but later extended the date to July 

2014. 

More recently, OPM has indicated that it is focused on acquiring 

a case management system and ultimately transitioning to a 

paperless system that will authorize accurate retirement benefits 

on the day they are due. It also plans other initiatives to incrementally improve retirement processing. We have not yet had an opportunity to closely examine these planned initiatives. 

Nonetheless, while it is making these plans and has reported 

progress toward its processing goal, OPM’s modernization success 

will depend on having a disciplined and effective approach to managing IT investments, one that, among other things, enables the 

agency to clearly describe how it intends to carry out its modernization projects, to include the projected timeframes and financial and other resources needed to accomplish the modernization 

and definite measures of its progress toward doing so. 
13 

In other work, we have reported on common factors critical to 

successful IT investment acquisitions that were undertaken by selected agencies. The agencies identified nine factors helpful to their 

achieving cost, schedule, scope, and performance goals. These included active engagement of program stakeholders throughout the 

acquisition process and having program staff with the necessary 

knowledge and skills regarding acquisition and procurement processes, contract monitoring, and other areas of program management. 

As OPM moves forward with its case management and other 

planned initiatives, applying these critical IT acquisition success 

factors, in conjunction with the industry and government best practices that we have stressed, presents opportunities for the agency 

to engage in more effective management of its investments. And, 

in doing so, the agency may better position itself to avoid mistakes 

of the past and overcome a long history of unsuccessful attempts 

to modernize the retirement system. 

This concludes my oral Statement, and I would be pleased to respond to your questions. 

Mr. FARENTHOLD. Thank you very much. 

[Prepared Statement of Ms. Melvin follows:] 
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Mr. FARENTHOLD. Mr. Thissen? And you are going to need to 

move that microphone right out in front of your mouth, as well. 

Mr. THISSEN. OK. Is this good? 

Mr. FARENTHOLD. Perfect. 

STATEMENT OF RICHARD G. THISSEN 

Mr. THISSEN. Good afternoon, and thank you for inviting me to 

testify. 

Over the last several years, Congress recognized there were 

issues with the processing of Federal retirement claims and held 

hearings drawing attention to the problem. As president of the association representing those directly affected, I thank the committee for continuing to address this issue. 

OPM developed a strategic plan to improve retirement claims 

processing, implemented the plan as intended, and it has worked. 

The inventory of pending retirement claims is now roughly 14,000, 

which is in line with projections. OPM set a goal of processing 90 

percent of the claims within 60 days. At 83 percent in November, 

OPM is not meeting that goal but is coming close. However, 200 

claims are over 180 days old. While this number is decreasing, over 

6 months is too long. 

In advance of this hearing, we asked NARFE members for feedback on their experience with the retirement claims procedure, specifically from those who retired within the last 2 years. Contrary 

to the avalanche of complaints we heard 3 years ago, the responses 

from hundreds of NARFE members were overwhelmingly positive. 

Nearly 75 percent of the responses we received were favorable and 

praised the customer service they received from OPM. 

In most cases, they received their full annuity check—they reported their full annuity check came 3 to 4 months following their 

separation from service. A large number of those who reported 

quick processing noted they received timely information and assistance from their agencies. Proper due diligence on the part of the 

employee prior to retiring, such as attendance at preretirement 

seminars, also contributed. 

Unfortunately, the responses we received from members who 

were not satisfied indicated their claims had been in the process 

anywhere from 6 months to more than 2 years. These individuals, 

not surprisingly, are very unhappy and tell lengthy stories critical 

of OPM. 

While OPM reports that the average call wait time is 10 minutes, NARFE members still report higher wait times and an inability to get through altogether. 

Overall, things have greatly improved, but there is still room for 

further improvement. 

While OPM bears the responsibility for processing the claims, a 

Federal employee’s transition into retirement starts with the employing agency. Unfortunately, the governmentwide error rates for 

retirement submissions remain unacceptable. Although publishing 

the results has led to pressure on agencies to improve, there was 

no significant improvement from 2012 to 2014. Agencies should be 

performing better. Reducing the error rate would improve processing at OPM, especially as it bears the brunt of retirees’ frustration with delayed claims. 
33 

OPM must work to enter the electronic age and eventually end 

the process of paper records being physically driven up and down 

the east coast. We realize this is no easy feat. The process of 

transitioning into retirement varies too widely among employing 

agencies. A standardized process and use of electronic records 

would go far in ensuring the backlog will become a distant memory. 

OPM’s IT strategic plan aims to do just that. 

While incremental process on these initiatives is being made, the 

timeline for completion and how OPM plans to be held accountable 

for keeping on schedule is unclear. It is also unclear how funding 

for these new initiatives will be obtained, particularly during these 

days of sequestration. 

In Fiscal Year 2014, OPM received $2.6 million intended to be 

directed toward modernizing the retirement processing system. 

This money came directly from the Civil Servant Retirement and 

Disability Trust Fund, money that Federal employees have contributed their entire careers in return for retirement stability. These 

funds should not be used lightly or taken for granted. It is unclear 

how this money was spent, and, as such, OPM should provide additional details regarding this plan. 

In the future and consistent with past practice, we urge that financing for IT modernization come from the general fund and not 

the trust fund. We strongly support efforts by OPM to modernize 

its retirement services to improve efficiency and better serve the 

Federal retirees. However, we remain skeptical of drawing additional resources from the trust fund simply because Congress is unwilling to provide adequate financing. 

Thank you again for providing me the opportunity to share 

NARFE’s views. I am happy to answer any questions you may 

have. 

Mr. FARENTHOLD. Thank you very much. 

[prepared Statement of Mr. Thissen follows:] 
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Mr. FARENTHOLD. And we will get under way with questions. I 

appreciate everybody staying within their time limit. 

Mr. Zawodny, at our last hearing, you said that by July 2013 

OPM would have been able to process 90 percent of its cases within 

60 days. You are moving in the right direction, but we are still 

short of the goal, with 83.4 percent of new retirement claims now 

processed in 60 days. 

Why haven’t we gotten to where we need to be? 

Mr. ZAWODNY. Well, thank you, Mr. Farenthold. 

The truth of the matter is that we have made great progress in 

reducing that inventory down to a manageable level. And while 

that near 84 percent of the cases are being done in under 60 days 

and that average time of being completed is roughly 36 days, there 

are sill some older cases that we are trying to work through. 

The one thing that we did not quite understand when we had 

those 60,000 cases that Mr. Lynch mentioned was the complexity 

of some of those cases that would be processed. As we have gotten 

our inventory down to a manageable steady State, we now understand more the complexity of the cases and what is needed with 

regard to missing information, such as service credit or pay information, that is needed to finalize the case. 

And as we have worked better to understand that, we are able 

to drive up the amount of cases that we process in under 60 days, 

and we’ll continue to do so. 

Mr. FARENTHOLD. Well, we’ve got an issue, though, with the 

number of workers eligible to retire. It suggests a potential for an 

upswing in pending claims in the coming years. How are you all 

preparing for this challenge? 

Mr. ZAWODNY. Just as we’ve prepared for all the other challenges 

regarding processing retirement. We continue to replace individuals who have retired or left the agency. We’ve cross-trained individuals to ensure that they understand different disciplines of the 

work to be conducted so that when we have a surge in one area 

we can move additional resources in there to try to drive that 

workload down. 

The other thing that we do is work closely with the agencies to 

try to improve their processing of the cases on their end, to educate 

employees better on their retirement applications so that when 

they come to us they can be fully worked as quickly as possible. 

Mr. FARENTHOLD. All right. 

Then, also, while there has been some progress—and I applaud 

that—some Federal workers continue to wait 6 months or longer 

for their pensions. OPM’s backlog of pending disability, retirement, 

and lump-sum death benefit determinations is also of concern. 

It is my understanding you all have 29 staff assigned to lumpsum benefit claims and 66 assigned to disability. Is this enough? 

Mr. ZAWODNY. The lump-sum payments are averaging about 140 

days. 

But we need to understand exactly what that lump-sum payment 

represents. It represents the amount of days that the annuitant 

survived in a particular month. For instance, if the annuitant 

passed away on the 5th of the month, they are entitled to 5 days 

of pay for that month. 

Mr. FARENTHOLD. Right. 
42 

Mr. ZAWODNY. The lump sum represents that 5 days of pay. 

When we get notified of the death of an annuitant, we immediately process the application for the death insurance payment, as 

well as getting the survivors into survivor pay so that they can continue their monthly payment as allotted by the survivor benefits. 

The final thing we do is solidify and finalize the lump-sum payment, which sometimes can be very little or up to a month’s worth 

of pay. 

We continue to work in that area, and that goes back to some 

of the cross-training that we have done to move resources into 

those areas that need to be put higher attention to. 

Mr. FARENTHOLD. Great. 

Let me go to Ms. Seymour. 

You are kind of the tech expert here, I guess. We’re moving toward a paperless system. And, you know, there’s a distinction between less paper and no paper at all, being paperless. Is a true 

paperless system doable, where you’re almost entirely electronic? 

And would it help? 

Ms. SEYMOUR. Anytime that we can eliminate paper, it helps 

move the process faster and makes the process more accurate. We 

are working with the retirement services business unit to understand where we can eliminate paper and in compliance with the 

rules and regulations that they use for processing retirement. 

There are some opportunities and there will be some challenges 

as we move through that process. So we want to make sure that 

we have targeted the opportunities first that we can eliminate 

paper soonest in that process. 

Mr. FARENTHOLD. And I would assume you’re taking an approach 

to this—obviously, you’re going to have the exceptional cases where 

somebody has bounced around to a dozen Federal agencies over 

their career. But a veteran who goes to work for the Postal Service 

when they come out of the service and serve there till they retire 

is not uncommon. 

I mean, are we focusing on the easy ones first? Or are we getting 

bogged down trying to create a system that will handle all cases 

rather than, you know, starting with the easy ones and growing it? 

Ms. SEYMOUR. Thank you, sir. I’m going to let Mr. Zawodny talk 

to his business priorities. 

Mr. FARENTHOLD. OK. 

Mr. ZAWODNY. In the particular case of that postal employee you 

mentioned, the Postal Service and other agencies that use parttime or seasonal help add a complication when it comes to the figuring of the retirement claim. 

But let’s say that same employee you mentioned did do service, 

served the country, and then came to work as a civil servant, 

stayed with that same agency for their entire career. That particular case could be considered a simple case. 

The problem becomes, quite often, that earlier in their career is, 

if service credit or service time was unaccounted for or mismanaged or not properly documented, that’s where that missing 

service comes in. So, quite often, those older cases that you mentioned earlier that might take 6 months or 9 months, those people 

waiting, it’s near every time—— 

Mr. FARENTHOLD. Well, you ought to be able to get—— 
43 

Mr. ZAWODNY [continuing]. We’re waiting for—— 

Mr. FARENTHOLD. You ought to be able to come up with a business process where—you’ve got to have the simple ones and the 

hard ones. Is it not doable to—— 

Mr. ZAWODNY. It is. 

Mr. FARENTHOLD [continuing]. Automate the simples ones first 

and then, you know, start growing it as you learn more? 

I talked to the programmers of the Google self-driving car. 

They’ve identified tens of thousands of unique driving situations. 

They start with the obvious ones, and then when they encounter 

a new one they grow the system. Is that the approach? 

Mr. ZAWODNY. That’s absolutely the approach. And that’s the approach that we’ve taken to drive the inventory down to where it is 

today. We’ve been able to segment out those less complicated cases 

and put teams of forces on those. 

And as we move into the automation of that particular process, 

we’ll be able to automate those cases. And those exceptions where 

we’re missing information or data to finalize a case will have to 

be—— 

Mr. FARENTHOLD. OK. Well, I’ve gone way over. We’ll let Mr. 

Lynch get his questions in, and I’ve got a couple more. We’ll do a 

second round after my colleague finishes here. 

Mr. LYNCH. Thanks, Mr. Chairman. 

Let’s just followup on the chairman’s thinking there a little bit. 

Is there a uniformity to these cases that are more pernicious and 

more difficult to resolve? Are we talking about, as the chairman 

suggested, someone who’s got multiple jurisdictions of service? 

Mr. ZAWODNY. Yes, sir. There are some cases where an individual may have worked at one agency their entire career and then 

those individuals that have gone from agency to agency to agency. 

Mr. LYNCH. Yes. So, I do want to try to get through a number 

of questions, but what happens to a person—I mean, are these the 

cases that are going on for 6 months? 

Mr. Thissen, what happens to an employee that has to wait 6 

months? Are they in limbo? Are they hanging? Do they have no income if they file for their retirement and they’re waiting 6 months? 

Mr. THISSEN. They get a temporary payment, but—— 

Mr. FARENTHOLD. Your mic is not on. 

Mr. THISSEN. All right. Is it on now? 

Mr. FARENTHOLD. Yes. 

Mr. THISSEN. OK. 

They get a temporary payment. But, obviously, that’s not the optimum, and it does create hardship for some of the members. It 

sure does. 

Mr. LYNCH. Yes. OK. 

Ms. Melvin, you did mention that we have, in the current system, OPM uses I believe you said 500 different procedures, laws, 

and regulations and 80 information systems that have I believe you 

said 400 different interfaces to process retirement applications. 

Ms. MELVIN. It’s approximately that. 

Mr. LYNCH. Isn’t that the root of the problem here? Is that what 

we’re talking about? 

Ms. MELVIN. Well, I think it certainly points to a complex process 

and a complex system that they have to try to address. And it is 
44 

part of the problem. From our standpoint, it doesn’t make it impossible to address it, though. 

What we are looking for, from the standpoint of what OPM does, 

is to have clearly defined plans and a very detailed tactical approach to addressing these kinds of complexities. We mentioned 

priorities. There are priorities in terms of the requirements that 

have to be defined and how they’re going to work through developing or acquiring the particular systems and how those systems 

would interface. 

So a number of factors that go into addressing it. Complex, yes, 

but not impossible. 

Mr. LYNCH. Yes. Well, thank you. 

It just seems to me that it doesn’t need to be this difficult. And 

there might actually be some savings here if we move away from 

the paper system to one that is, you know, automated. I’m a little 

surprised it’s taken this long. 

You mentioned also in your remarks there was a lack of oversight in terms of making this transition. Who do you think should 

be—should we bring somebody in from the outside in terms of making sure that this transition happens? Or how would the oversight 

take place? Obviously, it’s more difficult without having somebody 

overseeing this. 

Ms. MELVIN. When we did our work and reported on the oversight issue, one of the things that we looked at were their investment review boards. And that would be the critical players in 

terms of a chief information officer, chief financial officer, whomever else would be involved, the key officials from the business side 

who make the decisions on what the investments are going to be, 

how they prioritize those. We continue to believe that that’s necessary, in terms of having those key players. 

Ms. Seymour is the Chief Information Officer at OPM, and we 

would look to her as the first source of oversight relative to what 

has to be done in terms of delivering the technology solutions. That 

being said, Mr. Zawodny, in his role, you know, from the business 

side, is also critical. 

So the proper positions are there in terms of oversight. It’s a 

matter of making sure that when those boards are getting together 

that they, in fact, are performing. When we looked at what was 

being done back some years ago, the board was in place; there was 

an oversight board. However, it had not been responding to the 

types of issues that—the problems and concerns that were being 

brought to it. 

So it has to be a functional board. It has to have functional oversight capability. And that’s what we would look for going forward. 

Mr. LYNCH. Yes. Thank you. 

I’m just concerned—as the chairman has noted, the concern up 

here is whether we’ve got all the low-hanging fruit, and so we’ve 

eliminated—I mean, you deserve to be commended. You’ve eliminated 75 percent of your backlog. The problem here is, though, 

you’ve got this significant lingering backlog. And if people keep retiring at the rate that they have been, we’ve got a—you know, 

we’ve got a possible resurgence in the size of the backlog, and we’re 

back to square one at some point. 
45 

So now is the time to try to—you know, to try to change over the 

system. I know you all have tremendous responsibility already. You 

have made commendable progress. I’m not criticizing. I’m just trying to see what framework gets us to where we need to be. We 

need to have sustainable progress here. We can’t retrench every so 

often; we need to fix the system. 

And let me ask: How much of this is money, in terms of funding 

and—you know, we don’t like the idea of just throwing money at 

a problem and expecting it to go away. That has proven to be a 

failure in the past. You’ve really got to spend your money wisely 

and make those important changes. 

But, Mr. Zawodny, talk to me about the resources that you might 

need. 

Mr. ZAWODNY. Well, Mr. Lynch, as Stated earlier, we did receive 

$2.6 million in 2014. And in the present budget for 2015, we request an additional $2.4 million. 

Mr. LYNCH. Is that—Mr. Thissen was complaining about you 

raiding the disability trust fund. Is that where you got some of this 

money? 

Mr. ZAWODNY. That’s correct, sir. The law—— 

Mr. LYNCH. We can’t keep doing that, though, can we? 

Mr. ZAWODNY. I’m sorry? 

Mr. LYNCH. We can’t keep doing that, right? 

Mr. ZAWODNY. Well, the law authorizes us to use the trust fund 

for operating expenses for retirement services. It’s not—— 

Mr. LYNCH. Yes. 

Mr. ZAWODNY [continuing]. An appropriations. 

Mr. LYNCH. All right. I’m just nervous about having a resulting 

unfunded liability, you know, in that fund or inadequate resources. 

Sort of robbing Peter to pay Paul. I’d rather not get into that situation. 

But go ahead. I interrupted you. 

Mr. ZAWODNY. And with the current funding that we have, we 

believe that that’s going to be a sustainable amount to get us started on the right path. 

We have a number of initiatives. Like I mentioned, we’re going 

to be releasing an RFP very shortly to solicit vendors to provide us 

an estimate on what it’s going to cost to have a case management 

service started for us with a platform and actual case management 

system. Only then will we really understand exactly what the true 

cost is going to be and then be able to come back and properly 

budget for that in out-years. 

Mr. LYNCH. Yes. OK. 

All right. That’s all I have, Mr. Chairman. I yield back. 

Mr. FARENTHOLD. You hit a couple of the questions I had. I’ve 

basically just got a couple more questions. 

Ms. Melvin, after its last major initiative resulted in termination 

of a $290 million contract, OPM switched to an incremental approach for its modernization. 

Have we addressed the management issues, do you think, that 

you’ve identified in your previous reports and your testimony 

today? Are we at a point where you think they can do it? And do 

you have any feeling as to—and I guess it’s probably more of a 
46 

question for Mr. Zawodny after you answer, but is there the commitment to do it? 

Ms. MELVIN. We hope there is, but we have not been in to look 

at their initiatives and what they’re undertaking at this point. We 

would certainly look to Ms. Seymour and Mr. Zawodny to be primary players in making sure that they can move forward, and I 

hope that they are. But we would need to do more work to really 

be able to provide an informed response to that. 

Mr. FARENTHOLD. All right. 

And, then, Mr. Zawodny, I used to be a computer consultant in 

my early days, and I actually got into it when I led an automation 

process for a law firm that I was working at. That’s what got me 

interested in technology. 

And what I discovered was that, among a lot of the people who 

used the technology, be they lawyers or secretaries or whatever, 

are so busy in their day-to-day operations that they don’t want to 

take the time to learn a new system or participate in a committee 

or a study to figure out how to automate and make their job easier. 

And, you know, in today’s time, most people recognize that a little bit of time invested in technology typically pays off very well. 

Is there the attitude within your work force, and does it go all 

the way up to the top, where there is a willingness to commit the 

time and the effort that may in the short term put you a little bit 

behind, you’re going to have to work a little bit harder to go to that 

technology committee meeting, but in the long run will make your 

life a whole lot easier? 

Mr. ZAWODNY. The short answer to that is, yes, overwhelming 

enthusiasm to become more modern within the entire organization, 

from the top all the way down and back up. 

We have a number of processes already in place within retirement services that are an automated process, from the receipt of 

initial notification for the individual to retire, going through the interim pay that we mentioned earlier, through the calculations 

piece, and even to a rudimentary type of case management system 

we have. 

Our folks are attuned to using automation right now and welcome the opportunity to use the automation and to expand upon it 

even further in the future. 

Mr. FARENTHOLD. And just one last question to Ms. Seymour. 

Mr. Lynch talked about 80-plus legacy systems. I mean, I’m assuming those are—you know, you’ve got some old systems that are 

probably in Fortran and COBOL and other extinct programming 

language on hardware you probably can’t get parts for. Would that 

be a fair characterization of some of the stuff? 

Ms. SEYMOUR. It’s fair, yes, sir. 

Mr. FARENTHOLD. That’s got to be awfully expensive. Would we 

not be able to save some money if we moved to a modern system 

that’s more, if you will, off-the-shelf or, you know, certainly didn’t 

have to have custom manufactured parts with vacuum tubes? 

Ms. SEYMOUR. We’re not—thank you, sir. We’re not quite that 

antiquated. 

But what we are doing is moving from a mainframe environment, most of these applications. And when we talk about 80 appli-
47 

cations, they’re small applications that do a very finite set of functions and, together, form the retirement services system. 

So what we’re doing is taking this very incremental approach, 

putting in place the case management system first, and then we’re 

looking at each of those applications to make sure we understand 

the complete functionality that they perform and how we can move 

them into the modern environment. 

That gives us the opportunity for Mr. Zawodny’s staff to experience a little bit of the capabilities—— 

Mr. FARENTHOLD. Right. 

Ms. SEYMOUR [continuing]. Learn a little bit. And then we give 

them—you know, we build on that capability over time. 

Mr. FARENTHOLD. I’m reminded of a—I took a computer in when 

I was doing a law firm to one of the senior partners. He called me 

up and said, ‘‘Come get this rat thing out of my office,’’ referring 

to the mouse. I hope we don’t—I hope we don’t have that. 

I don’t have anything else. Mr. Lynch, did you have anything you 

wanted to followup on? 

Mr. LYNCH. Well, I just want to—thank you, Mr. Chairman. 

I would just want to encourage you to try to tighten up what you 

need. You know, on this side of the dais, that’s what we want to 

know—resources, technical assistance, maybe, you know, a third 

party to oversee the transition. 

I know you’re both working very hard, all of you are working 

very hard, but sometimes you need sort of an honest broker here 

to—when you’ve got 500 different procedures and all these laws 

and regulations, you’ve got 80 information systems and 400 different interfaces, sometimes that can be overwhelming and you’ve 

got obvious turf concerns between departments. If we can have 

somebody else sort of be the umbrella group that gets all of these 

people corralled, you know, we can make a little bit more progress 

than we have been. We’re going too slow right now, and that raises 

some concerns for me. 

So we want to be—we want to be helpful. And, you know, we just 

need more input in order to make sure what we’re doing is rowing 

in the same direction that you all are. Thank you. 

I yield back. 

Mr. FARENTHOLD. Great. And we made it in time for us to get 

out to votes. We’re not going to hold you over. 

I join with Mr. Lynch in encouraging you to get this job done, 

get the process finished and fixed. Our Federal workers deserve 

prompt and adequate processing of their retirement after years of 

service to this country. 

Thank you very much. 

We’re adjourned. 

[Whereupon, at 2:12 p.m., the subcommittee was adjourned.] 

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