GAO 

United States Government Accountability Office

Report to Congressional Committees

OFFICE OF 

PERSONNEL 

MANAGEMENT 

Retirement 

Modernization 

Planning and 

Management 

Shortcomings Need to 

Be Addressed 

April 2009 

GAO-09-529 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

April 2009

OFFICE OF PERSONNEL MANAGEMENT

Retirement Modernization Planning and Management 

Shortcomings Need to Be Addressed 

Highlights of GAO-09-529, a report to 

congressional committees 

For the past two decades, the 

Office of Personnel Management 

(OPM) has been working to 

modernize the paper-intensive 

processes and antiquated systems 

used to support the retirement of 

federal employees. By moving to an 

automated system, OPM intends to 

improve the program’s efficiency 

and effectiveness. In January 2008, 

GAO recommended that the agency 

address risks to successful system 

deployment. Nevertheless, OPM 

deployed a limited initial version of 

the modernized system in February 

2008. After unsuccessful efforts to 

address system quality issues, OPM 

suspended system operation, 

terminated a major contract, and 

began restructuring the 

modernization effort, also referred 

to as RetireEZ. For this study, GAO 

was asked to (1) assess the status 

of OPM’s efforts to plan and 

implement the RetireEZ program 

and (2) evaluate the effectiveness 

of the agency’s management of the 

modernization initiative. To do this, 

GAO reviewed OPM program 

documentation and interviewed 

agency and contractor officials. 

What GAO Recommends

To improve OPM’s effort to plan 

and implement its retirement 

modernization program, GAO is 

recommending that OPM correct 

management weaknesses. In 

written comments on a draft of this 

report, the Director of OPM agreed 

with GAO’s recommendations and 

described steps the agency is 

taking to address them.

OPM remains far from achieving the modernized capabilities it had planned. 

Specifically, the agency has partially implemented two of eight planned 

capabilities: 

• an integrated database of retirement information accessible to OPM and 

agency retirement processing personnel and 

• enhanced customer service capabilities that support customer needs and 

provide self-service tools. 

However, the remaining six capabilities have yet to be implemented because 

they depended on deliverables that were to be provided by a contract that is 

now terminated. Examples of these missing capabilities include: 

• automated submission of retirement information through interfaces with 

federal agencies and 

• Web-accessible self-service retirement information for active and retired 

federal employees. 

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. Although agency documents describe program 

implementation activities, they do not include a definition of the program, its 

scope, lines of responsibility and authority, management processes, and a 

schedule. Also, modernization program documentation does not describe 

results-oriented performance goals and measures. Until the agency completes 

and uses a plan that includes all of the above elements to guide its efforts, it 

will not be properly positioned to move forward with its restructured 

retirement modernization initiative. 

Further, OPM has significant weaknesses in five key management areas that are 

vital for effective development and implementation of its modernization program: 

cost estimating, earned value management (a recognized means for measuring 

program progress), requirements management, testing, and oversight. For 

example, the agency has not developed a cost estimating plan or established a 

performance measurement baseline—prerequisites for effective cost estimating 

and earned value management. Further, although OPM is revising its previously 

developed system requirements, it has not established processes and plans to 

guide this work or addressed test activities even though developing processes and 

plans, as well as planning test activities early in the life cycle, are recognized best 

practices for effective requirements development and testing. Finally, although 

OPM’s Executive Steering Committee and Investment Review Board have 

recently become more active regarding RetireEZ, these bodies did not exercise 

effective oversight in the past, which has allowed the aforementioned 

management weaknesses to persist and OPM has not established guidance 

regarding how these entities are to intervene when corrective actions are needed. 

Until OPM addresses these weaknesses, many of which GAO and others made 

recommendations to correct, the agency’s retirement modernization initiative 

remains at risk of failure. Institutionalizing effective management is critical not 

only for the success of this initiative, but also for that of other modernization 

efforts within the agency. 

To view the full product, including the scope 

and methodology, click on GAO-09-529.

For more information, contact Valerie C. 

Melvin at (202) 512-6304 or 

melvinv@gao.gov. 
Contents 

Letter 1

Background 2

Few Planned Capabilities Have Been Implemented, and Future 

Efforts Are Not Guided by a Complete Plan 12 

OPM Is Not Positioned to Effectively Manage Its Retirement 

Modernization Initiative 16 

Conclusions 24 

Recommendations for Executive Action 25 

Agency Comments and Our Evaluation 25 

Appendix I Objectives, Scope, and Methodology 27 

Appendix II Comments from the Office of Personnel Management 29 

Appendix III GAO Staff Contact and Acknowledgments 40 

Tables 

Table 1: Key Retirement Modernization Contracts 9 

Table 2: Retirement Modernization Management Entities 10 

Table 3: Status of Implementing Retirement Modernization 

Capabilities 13 

Table 4: Fiscal Year 2009 Initiatives 15 

Figures 

Figure 1: Estimated Federal Employees Eligible and Likely to 

Retire by 2016 4 

Figure 2: Simplified View of Retirement Application Process 5 

Figure 3: Timeline of Retirement Modernization Initiatives 10 

Page i GAO-09-529 OPM Retirement Modernization 
Abbreviations 

CIS Center for Information Services 

CRIS Center for Retirement and Insurance Services 

CSRS Civil Service Retirement System 

DBTS defined benefits technology solution 

EVM earned value management 

FAPS FERS Automated Processing System 

FERS Federal Employees Retirement System 

GSA General Services Administration 

OMB Office of Management and Budget 

OPM Office of Personnel Management 

RSM Retirement Systems Modernization 

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

copyrighted images or other material, permission from the copyright holder may be 

necessary if you wish to reproduce this material separately. 

Page ii GAO-09-529 OPM Retirement Modernization 
United States Government Accountability Office

Washington, DC 20548 

 

April 21, 2009 

The Honorable Richard J. Durbin 

Chairman 

The Honorable Susan Collins 

Ranking Member 

Subcommittee on Financial Services 

 and General Government 

Committee on Appropriations 

United States Senate 

The Honorable José E. Serrano 

Chairman 

The Honorable Jo Ann Emerson 

Ranking Member 

Subcommittee on Financial Services 

 and General Government 

Committee on Appropriations 

House of Representatives 

For the past two decades, the Office of Personnel Management (OPM) has 

been attempting to modernize the paper-intensive processes and 

antiquated systems it uses to support the retirement of federal employees, 

in part because the current process does not provide prompt and complete 

benefit payments upon retirement. The agency’s retirement modernization 

initiative, also referred to as RetireEZ, was intended to address this 

situation and improve the efficiency and effectiveness of the retirement 

program, which serves federal employees who are eligible to receive 

benefits in the future, employees who are already retired, and their 

survivors and beneficiaries. 

In January 2008, we reported on challenges that OPM faced in deploying 

RetireEZ, noted a number of concerns regarding the agency’s management 

of the initiative, and recommended corrective actions.1

 In late February 

2008, OPM deployed a version of the modernized retirement system; 

however, the agency suspended the system’s operation in May 2008. After 

5 months of attempting to address system quality issues, the agency 

 

1

GAO, Office of Personnel Management: Improvements Needed to Ensure Successful 

Retirement Systems Modernization, GAO-08-345 (Washington, D.C.: Jan 31, 2008). 

Page 1 GAO-09-529 OPM Retirement Modernization 
 

terminated its contract with the primary modernization vendor in October 

2008 and began restructuring the retirement modernization initiative in 

November 2008. 

At your request, we conducted a follow-up study of OPM’s management of 

RetireEZ. Specifically, our objectives were to 

• assess the status of OPM’s efforts toward planning and implementing the 

RetireEZ program and 

• evaluate the effectiveness of the agency’s management of the 

modernization initiative. 

To accomplish our objectives, we reviewed relevant program 

documentation and interviewed appropriate OPM and contractor officials. 

Specifically, to assess the status of the program, we reviewed 

documentation such as the retirement modernization program 

management plan and supporting documents. We also visited OPM’s 

retirement operations facilities in Washington, D.C., and Boyers, 

Pennsylvania. To evaluate the effectiveness of the agency’s management of 

the modernization initiative, we reviewed OPM’s cost estimation, earned 

value management (EVM), requirements management, test management 

activities, and oversight. We compared OPM’s plans and activities to best 

practices and assessed the agency’s progress toward implementing our 

prior recommendations. 

We conducted this performance audit from May 2008 through March 2009 

in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives. See appendix II for a more 

complete description of our objectives, scope, and methodology. 

OPM’s mission is to ensure that the federal government has an effective 

civilian workforce. In this regard, one of the agency’s major human 

resources tasks is to manage and administer the retirement program for 

federal employees. According to the agency, the program serves federal 

employees by providing (1) retirement compensation and (2) tools and 

options for retirement planning. OPM’s Center for Retirement and 

Insurance Services administers the two defined benefit retirement plans 

Background 

Page 2 GAO-09-529 OPM Retirement Modernization 
 

that provide retirement, disability, and survivor benefits to federal 

employees. The first plan, the Civil Service Retirement System (CSRS), 

provides retirement benefits for most federal employees hired before 1984. 

The second plan, the Federal Employees Retirement System (FERS), 

covers most employees hired in or after 1984 and provides benefits that 

include Social Security and a defined contribution system.2

According to OPM, there are approximately 2.9 million active federal 

employees and nearly 2.5 million retired federal employees. The agency’s 

March 2008 analysis of federal employment retirement data estimates that 

nearly 1 million active federal employees will be eligible to retire and 

almost 600,000 will most likely retire by 2016.3

 Figure 1 summarizes the 

estimated number of employees eligible and likely to retire. 

 

2

The Social Security Administration is responsible for administering Social Security, and 

the Federal Retirement Thrift Investment Board administers the defined contribution 

system known as the Thrift Savings Plan. Defined benefit plans calculate benefit amounts 

in advance of retirement based on factors such as salary level and years of service, and 

defined contribution plans calculate benefit amounts based on how the amount is invested 

by the employee and employer. 

3

OPM, An Analysis of Federal Employee Retirement Data: Predicting Future Retirements 

and Examining Factors Relevant to Retiring from the Federal Service (March 2008). 

Page 3 GAO-09-529 OPM Retirement Modernization 
 

Figure 1: Estimated Federal Employees Eligible and Likely to Retire by 2016 

OPM and employing agencies’ human resources and payroll offices are 

responsible for processing federal employees’ retirement applications. The 

process begins when an employee submits a paper retirement application 

to his or her employer’s human resources office and is completed when 

the individual begins receiving regular monthly benefit payments (as 

illustrated in fig. 2). 

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

2009 2010 2011 2012 2013 2014 2015 2016

Number

Source: OPM.

Fiscal year

Likely to retire

Eligible to retire

Federal Employee 

Retirement Application 

Processing 

Page 4 GAO-09-529 OPM Retirement Modernization 
 

Figure 2: Simplified View of Retirement Application Process 

OPM

Agency

Human Resources (HR)

Payroll

Source: GAO analysis of OPM data.

Ensure package 

has all required 

information

Regular benefit payment 

is calculated and 

package is submitted for 

authorization

Package and benefit

payment reviewed 

and verified by 

second adjudicator

Development actions taken as needed to adjudicate application

Regular benefit 

payment 

authorized 

Agency retirement 

package received

Interim payment 

calculated based 

on agency 

summary file and 

authorized

Receive package from HR 

and perform analysis

Prepare individual 

retirement record

Electronically submit summary file and 

mail hardcopy of complete package to OPM

Employee submits

retirement application

Required meeting in which agency benefits

officer checks paperwork, provides retirement 

counseling, and provides benefits estimate

Review retirement package 

and provide final documents

to agency payroll

Develop retirement 

package and 

separation form

Once an employee submits an application, the employing agency’s human 

resources office provides retirement counseling services to the employee 

and augments the retirement application with additional paperwork, such 

as a separation form that finalizes the date the employee will retire. Then 

the agency provides the retirement package to the employee’s payroll 

office. After the employee separates for retirement, the payroll office is 

responsible for reviewing the documents for correct signatures and 

information, making sure that all required forms have been submitted, and 

adding any additional paperwork that will be necessary for processing the 

retirement package. Once the payroll office has finalized the paperwork, 

the retirement package is mailed to OPM to continue the retirement 

process. Payroll offices are expected to submit the package to OPM within 

30 days of the retiree’s separation date. 

Upon receipt of the retirement package, OPM calculates an interim 

payment based on information provided by the employing agency. The 

interim payments are partial payments that typically provide retirees with 

Page 5 GAO-09-529 OPM Retirement Modernization 
 

80 percent of the total monthly benefit they will eventually receive.4 OPM 

then starts the process of analyzing the retirement application and 

associated paperwork to determine the total monthly benefit amount to 

which the retiree is entitled. This process includes collecting additional 

information from the employing agency’s human resources and payroll 

offices or from the retiree to ensure that all necessary data are available 

before calculating benefits. After OPM completes its review and authorizes 

payment, the retiree begins receiving 100 percent of the monthly 

retirement benefit payments. OPM then stores the paper retirement folder 

at the Retirement Operations Center in Boyers, Pennsylvania. 

According to the agency’s 2008 performance report, the average 

processing time from the date OPM receives the initial application to the 

time the retiree receives a full payment is 42 days. According to the Deputy 

Associate Director for the Center of Retirement and Insurance Services, 

about 200 employees are directly involved in processing the approximately 

100,000 retirement applications OPM receives annually. This processing 

includes functions such as determining retirement eligibility, inputting 

data into benefit calculators, and providing customer service. The agency 

uses over 500 different procedures, laws, and regulations, which are 

documented on the agency’s internal Web site, to process retirement 

applications. For example, the site contains memorandums that outline 

new procedures for handling special retirement applications, such as 

those for disability or court orders. Further, OPM’s retirement processing 

involves the use of over 80 information systems that have approximately 

400 interfaces with other internal and external systems. For instance, 26 

internal systems interface with the Department of the Treasury to provide, 

among other things, information regarding the total amount of benefit 

payments to which an employee is entitled. 

OPM has stated that the federal employee retirement process currently 

does not provide prompt and complete benefit payments upon retirement, 

and that customer service expectations for more timely payments are 

increasing. The agency also reports that a greater workload is expected 

due to an anticipated increase in the number of retirement applications 

over the next decade, yet current retirement processing operations are at 

full capacity. Further, the agency has identified several factors that limit 

 

4

OPM reported in November 2008 that it has made improvements to this process and is 

currently providing retirees with interim payments that are about 90 percent of the monthly 

payment which they are entitled. 

Page 6 GAO-09-529 OPM Retirement Modernization 
 

its ability to process retirement benefits in an efficient and timely manner. 

Specifically, it noted that 

• current processes are paper-based and manually intensive, resulting in a 

higher number of errors and delays in providing benefit payments; 

• the high costs, limited capabilities, and other problems with the existing 

information systems and processes pose increasing risks to the accuracy 

of benefit payments; 

• current manual capabilities restrict customer service; 

• federal employees have limited access to their retirement records, making 

planning for retirement difficult; and 

• attracting qualified personnel to operate and maintain the antiquated 

retirement systems, which have about 3 million lines of custom 

programming, is challenging. 

In the late 1980s, OPM recognized the need to automate and modernize its 

retirement processing and began retirement modernization initiatives that 

have continuously called for automating its antiquated paper-based 

processes. The agency’s previously established program management 

plans included the objectives of having timely and accurate retirement 

benefit payments and more efficient and flexible processes. For example, 

the agency’s plans call for processing retirement applications and 

providing retirees 100 percent of their monthly benefit payments the day it 

is due versus providing interim monthly payments. Its initial 

modernization vision called for providing prompt and complete benefit 

payments by developing an integrated system and automated processes. 

However, the agency has faced significant and long-standing challenges in 

doing so. 

In early 1987, OPM began a program called the FERS Automated 

Processing System (FAPS). However, after 8 years of planning, the agency 

decided it needed to reevaluate the program, and the Office of 

Management and Budget (OMB) requested that an independent board 

conduct a review to identify critical issues impeding progress and 

recommend ways to address the issues. The review identified various 

management weaknesses, including the lack of an established strategic 

plan, cost estimation methodologies, and baseline; improperly defined and 

ineffectively managed requirements; and no clear accountability for 

OPM Has a Long History of 

Retirement Modernization 

Initiatives 

Page 7 GAO-09-529 OPM Retirement Modernization 
 

decision making and oversight.5 Accordingly, the board suggested areas 

for improvement and recommended terminating the program if immediate 

action was not taken. In mid-1996, OPM terminated the program. 

In 1997, OPM began planning a second modernization initiative, called the 

Retirement Systems Modernization (RSM) program. The agency originally 

intended to structure the program as an acquisition of commercially 

available hardware and software that would be modified in-house to meet 

its needs. From 1997 to 2001, OPM developed plans and analyses and 

began developing business and security requirements for the program. 

However, in June 2001, it decided to change the direction of the retirement 

modernization initiative. 

In late 2001, retaining the name RSM, the agency embarked upon its third 

initiative to modernize the retirement process and examined the 

possibility of privately sourced technologies and tools. To this end, OPM 

issued a request for information to obtain private sourcing options and 

determined that contracting was a viable alternative that would be cost 

efficient, less risky, and more likely to be completed on time and on 

budget. In 2006, the agency awarded three contracts for: (1) a 

commercially available, defined benefits technology solution (DBTS) to 

automate retirement processing; (2) services to convert paper records to 

electronic files; and (3) consulting services to support the redesign of its 

retirement operations. The contract for DBTS was awarded to Hewitt 

Associates, and the additional contracts to support the technology were 

awarded to Accenture Ltd. and Northrop Grumman Corporation, as 

reflected in table 1. 

 

5

OPM Retirement Insurance Service, FERS Automated Process System Information 

Technology Resources Board Review (Washington, D.C., July 16, 1996). Executive Order 

13011, Section 5 (July 1996), established that the Information Technology Resources Board 

was to provide independent assessments to assist in the development, acquisition, and 

management of selected major information systems and to provide recommendations to 

agency heads and OMB as appropriate. Executive Order 13011 was revoked by Executive 

Order 13403 (May 2006). 

Page 8 GAO-09-529 OPM Retirement Modernization 
 

Table 1: Key Retirement Modernization Contracts 

Contractor Award date 

Contract value at 

award 

(in millions) Deliverables 

Hewitt Associates May 2006 $290.0 A defined benefits technology solution (DBTS) that enables 

automating retirement processes 

Accenture Ltd. May 2006 40.0 Redesigned retirement processes to support DBTS 

Northrop Grumman 

Corporation 

September 

2006 

30.7 Converting paper retirement records to electronic files 

Source: OPM. 

OPM produced a December 2007 program management plan that, among 

other things, described capabilities the agency expected to implement as 

outcomes of retirement modernization. Among these capabilities, the 

agency expected to implement retirement benefit modeling and planning 

tools for active federal employees, a standardized retirement benefit 

calculation system, and a consolidated system to support all aspects of 

retirement processing. 

In February 2008, OPM renamed the program RetireEZ and deployed a 

limited initial version of DBTS. As the foundation of the modernization 

initiative, DBTS was to be a comprehensive technology solution that 

would provide capabilities to substantially automate retirement 

processing. This technology was to be provided by the contractor for a 

period of 10 years and was intended to provide, among other things, an 

integrated database with calculation functionality for retirement 

processing. In addition to calculating retirement benefit amounts, DBTS 

was intended to provide active and retired federal employees with selfservice, Internet-based tools for accessing accounts, updating retirement 

records, submitting transactions, monitoring the status of claims, and 

forecasting retirement income. The technology was also expected to 

enhance customer service by providing OPM and agency personnel with 

the capability to access retirement information online. Further, the 

technology was expected to be integrated with OPM and federal agency 

electronic retirement records and processes. When fully implemented, the 

modernized program was expected to serve OPM retirement processing 

personnel, federal agency human resources and payroll offices, active 

federal employees, retirees, and the beneficiaries of retirees. 

According to the agency, in late February 2008, the DBTS was deployed 

with limited functionality to 26,000 federal employees serviced by the 

General Services Administration’s (GSA) payroll offices. In April 2008, 

Page 9 GAO-09-529 OPM Retirement Modernization 
 

OPM reported that 13 of the 37 retirement applications received from 

GSA’s payroll office had been processed through DBTS with manual 

intervention and provided the retirees 100 percent of their monthly 

benefits within 30 days from their retirement date. However, a month later, 

the agency determined that DBTS had not worked as expected and 

suspended system operation. In October 2008, after 5 months of 

attempting to address system quality issues, the agency terminated the 

contract. 

In November 2008, OPM began restructuring the program and reported 

that its efforts to modernize retirement processing would continue. Figure 

3 illustrates the timeline of retirement modernization initiatives from 1987 

to the present. 

Figure 3: Timeline of Retirement Modernization Initiatives 

1987 1988 1995 1996 1997 1998 1999 2000 2001 200 2002 3 2004 2005 2006 2007 2008 2009

FAPS

RSM

(in-house)

RSM

(privately sourced) 

DBTS deployed

(RSM renamed 

RetireEZ) RetireEZ 

(restructured)

First effort 8 years Fourth effort

Time span: 21 years

Source: GAO analysis of OPM data.

Second effort 4 years Third effort 7 years

Current Retirement 

Modernization 

Management 

Various entities within OPM are responsible for managing RetireEZ. 

Specifically, the management is composed of committees, a program 

office, and operational support, as reflected in table 2. 

Table 2: Retirement Modernization Management Entities 

Title Description 

Executive Steering Committee The Executive Steering Committee is responsible for overall program direction and 

decision making. The committee is chaired by the Director of the Office of Modernization 

and Human Resources Line of Business. 

Investment Review Board The Investment Review Board is responsible for monitoring the progress of continued 

investment in the program and determining appropriate corrective action when 

necessary. The board is chaired by the agency’s Chief Information Officer. 

Office of Modernization and Human 

Resources Line of Business 

The Office of Modernization and Human Resources Line of Business is responsible for 

overseeing the program office for the retirement modernization. The Director of 

Modernization and Human Resources Line of Business maintains overall administration 

of program activities and resources. 

Page 10 GAO-09-529 OPM Retirement Modernization 
 

Title Description 

Center for Information Services The Center for Information Services (CIS), within the Management Services Division, is 

responsible for providing support and oversight for acquisition, systems, contract, and 

security management. The Deputy Associate Director of CIS (also the Chief Information 

Officer) oversees the maintenance and operation of legacy retirement systems. 

Center for Retirement and Insurance 

Services 

The Center for Retirement and Insurance Services (CRIS), within the Human Resources 

Products and Services Division, is responsible for retirement processes and is expected 

to assume ownership of the retirement modernization. The Deputy Associate Director of 

CRIS oversees current operations and allocates resources as necessary to support the 

program office. 

Source: GAO analysis of OPM data. 

Prior GAO Reviews of 

OPM’s Retirement 

Modernization Initiatives 

Since 2005, we have conducted several studies of OPM’s retirement 

modernization noting weaknesses in its management of the initiative. In 

February of that year, we reported that the agency lacked processes for 

retirement modernization acquisition activities, such as determining 

requirements, developing acquisition strategies, and implementing a risk 

program. Further, the agency had not established effective security 

management, change management, and program executive oversight.6

 We 

recommended that the Director of OPM ensure that the retirement 

modernization program office expeditiously establish processes for 

effective oversight of the retirement modernization in the areas of system 

acquisition management, information security, organizational change 

management, and information technology (IT) investment management. In 

response, between 2005 and 2007, the agency initiated steps toward 

establishing management processes for retirement modernization and 

demonstrated the completion of activities with respect to each of our nine 

recommendations. 

However, in January 2008, we reported that the agency still needed to 

improve its management of the program to ensure a successful outcome 

for its modernization efforts.7

 Specifically, we reported that initial test 

results had not provided assurance that DBTS would perform as intended, 

the testing schedule increased the risk that the agency would not have 

sufficient resources or time to ensure that all system components were 

tested before deployment, and trends in identifying and resolving system 

defects had indicated a growing backlog of problems to be resolved prior 

 

6

GAO, Office of Personnel Management: Retirement Systems Modernization Program 

Faces Numerous Challenges, GAO-05-237 (Washington, D.C.: Feb. 28, 2005). 

7

GAO-08-345. 

Page 11 GAO-09-529 OPM Retirement Modernization 
 

to deployment. Further, we reported that although the agency had 

established a risk management process, it had not reliably estimated the 

program costs, and its progress reporting was questionable because it did 

not reflect the actual state of the program. We recommended that the 

Director of OPM address these deficiencies by conducting effective system 

tests and resolving urgent and high priority system defects prior to system 

deployment, in addition to improving program cost estimation and 

progress reporting. 

In response to our report, OPM stated that it concurred with our 

recommendations and was taking steps to address them. However, in 

March 2008, we determined that the agency was moving forward with 

system deployment and had not yet implemented its planned actions.8

OPM subsequently affirmed its agreement with our recommendations in 

April 2008 and reported that it had implemented or was in the process of 

implementing each recommendation. As of March 2009, however, these 

recommendations still had not been fully addressed. 

OPM remains far from fully implementing the retirement modernization 

capabilities described when it documented its plans for RetireEZ in 2007. 

The agency only partially implemented two of eight capabilities that it 

identified to modernize retirement processing. The remaining six 

capabilities, which were to be delivered through the DBTS contract, have 

not been implemented, and OPM’s plans to continue implementing them 

are uncertain. While the agency has taken steps to restructure the 

RetireEZ program without the DBTS contract, it has not developed a plan 

to guide its future modernization efforts. 

OPM’s retirement modernization plans from 2007 described eight 

capabilities that were to be implemented to achieve modernized processes 

and systems. As of late March 2009, the agency had partially implemented 

two of these capabilities while the remaining six had not been 

implemented (see table 3). 

Few Planned 

Capabilities Have 

Been Implemented, 

and Future Efforts 

Are Not Guided by a 

Complete Plan 

Few Retirement 

Modernization Capabilities 

Have Been Implemented 

 

8

GAO, Comments on the Office of Personnel Management’s February 20, 2008 Report to 

Congress Regarding the Retirement System Modernization, GAO-08-576R (Washington, 

D.C.: Mar. 28, 2008). 

Page 12 GAO-09-529 OPM Retirement Modernization 
 

Table 3: Status of Implementing Retirement Modernization Capabilities 

Capability Implemented 

An integrated database of retirement information accessible to OPM 

and agency retirement processing personnel 

Partially 

Enhanced customer service that support customer needs and selfservice tools Partially 

Automated submission of retirement information through interfaces 

with federal agencies 

No 

Web-accessible, self-service retirement information for active and 

retired federal employees 

No 

A consolidated system to support all aspects of retirement processing No 

Electronic case management system to manage retirement 

applications and processes 

No 

Standardized systems for determining and calculating retirement 

benefit that is integrated with the retirement information database and 

is accessible to OPM and federal agencies 

No 

Retirement benefit modeling and planning tools for active federal 

employees 

No 

Source: GAO analysis of OPM data. 

Specifically, it had achieved partial implementation of an integrated 

database of retirement information that was intended to be accessible to 

OPM and agency retirement processing personnel. In this regard, the 

agency implemented a new database, populated with images of retirement 

information, which is accessible to OPM retirement processing personnel 

online. This database contains over 8 million files which, according to 

agency officials, represent approximately 80 to 90 percent of the available 

retirement information for all active federal employees. However, the 

capability for the information in the database to be integrated with OPM’s 

legacy retirement processing systems and to be accessible to other agency 

retirement processing personnel has not yet been implemented. 

OPM has also partially implemented enhanced customer service 

capabilities. Specifically, the agency acquired a new telephone 

infrastructure (i.e., additional lines) and hired additional customer service 

representatives to reduce wait times and abandonment rates. However, 

the agency has not yet developed the capabilities for OPM retirement 

processing personnel to provide enhanced customer support to active and 

retired federal employees through online account access and management. 

Moreover, six other capabilities have not been implemented—and plans to 

implement them are uncertain—because they were to be delivered 

Page 13 GAO-09-529 OPM Retirement Modernization 
 

through the now-terminated DBTS contract, which had been expected to 

provide a single system that would automate the processing of retirement 

applications, calculations, and benefit payments. 

Among the capabilities not implemented was one for other agencies’ 

automated submissions of retirement information to OPM that could be 

used to process retirement applications. While OPM began developing this 

capability by establishing interfaces with other agencies as part of its 

effort to implement DBTS, it discontinued the use of the interfaces for 

processing retirement applications when the DBTS contract was 

terminated. Thus, federal agencies that submit retirement information to 

OPM continue to provide paper packages and information when 

employees are ready to retire. 

Further, OPM has not implemented a planned capability for active and 

retired federal employees to access online retirement information through 

self-service tools. While the agency provided demonstrations of DBTS in 

April 2008 that showed the ability for employees to access information 

online, including applying for retirement and modeling future retirement 

benefits, this capability was to be provided by DBTS, and thus, no longer 

exists. The contractor had also been expected to deliver a consolidated 

system to support all aspects of retirement processing and an electronic 

case management system to support retirement processing. In the absence 

of these capabilities, the agency continues to manage cases through paper 

tracking and stand-alone systems. Additionally, OPM and federal agencies 

continue to rely on nonstandardized systems to determine and calculate 

retirement benefits, and federal retirees currently have only limited online, 

self-service tools. 

OPM Does Not Have a 

Complete Plan for the 

Future of the RetireEZ 

Program 

Program management principles and best practices emphasize the 

importance of using a program management plan that, among other things, 

establishes a complete description that ties together all program 

activities.9

 An effective plan includes a description of the program’s scope, 

implementation strategy, lines of responsibility and authority, 

management processes, and a schedule. Such a plan incorporates all the 

critical areas of system development and is to be used as a means of 

determining what needs to be done, by whom, and when. Furthermore, 

 

9

Institute of Electrical and Electronics Engineers (IEEE), IEEE/EIA Guide for Information 

Technology, IEEE/EIA 12207.1-1997 (April 1998). 

Page 14 GAO-09-529 OPM Retirement Modernization 
 

establishing results-oriented (i.e., objective, quantifiable, and measurable) 

goals and measures, that can be included in a plan, provides stakeholders 

with the information they need to effectively oversee and manage 

programs. 

A plan for the future of the RetireEZ program has not been completed. In 

November 2008, OPM began restructuring the program and reported it was 

continuing toward retirement modernization without the DBTS contract. 

The restructuring efforts have resulted in a wide variety of documentation, 

including multiple descriptions of the program in formal agency reports, 

budget documentation, agency briefing slides, and related documents. 

For example, OPM’s November Fiscal Year 2008 Agency Financial Report 

described what the RetireEZ program is expected to achieve (e.g., provide 

retirement modeling tools for federal employees) once implemented. The 

agency’s Annual Performance Report, dated January 2009, outlined that 

the new vision for the restructured program is “to support benefit planning 

and management throughout a participant’s lifecycle through an enhanced 

federal retirement program.” The agency also presented information to 

OMB that identified eight fiscal year 2009 program initiatives, as listed in 

table 4. 

Table 4: Fiscal Year 2009 Initiatives 

Initiative 

Determine next steps for technology tools and develop an execution plan 

Increase customer contact center capacity 

Complete conversion of paper records 

Work with agencies to improve the quality, timeliness, and completeness of retirement 

data 

Begin activities to provide agencies access to electronic data 

Improve performance metrics for interim payments 

Partner with the Enterprise Human Resources Integration initiativea for data storage, 

cleansing, and transmission of recurring data 

Begin imaging all incoming paper records 

Source: OPM data. 

a

OPM’s Enterprise Human Resources Integration initiative is intended to provide federal agencies 

access to personnel folders online. 

The agency has developed a variety of informal program documents and 

briefing slides that describe retirement modernization activities. For 

instance, one document prepared by the program office describes a fivePage 15 GAO-09-529 OPM Retirement Modernization 
 

phased approach that is intended to replace its previous DBTS-reliant 

strategy. The approach includes the following activities: (1) collecting 

electronic retirement information, (2) automating the retirement 

application process, (3) integrating retirement information, (4) developing 

retirement calculation technologies and tools, and (5) improving postretirement processes through a technology solution. In addition, briefing 

slides also prepared by the program office outline a schedule for efforts to 

identify new technologies to support retirement modernization by drafting 

a request for information, which OPM expects to issue in late April 2009. 

Regardless, OPM’s various reports and documents describing its planned 

retirement modernization activities do not provide a complete plan for its 

restructured program. Specifically, although agency documents describe 

program implementation activities, they do not include a definition of the 

program, its scope, lines of responsibility and authority, management 

processes, and schedule. Also, the modernization program documentation 

does not describe results-oriented (i.e., objective, quantifiable, and 

measurable) performance goals and measures. According to the RetireEZ 

program manager, the agency is developing plans, but they will not be 

ready for release until the new OPM director has approved them, which is 

expected to occur in April 2009. Until the agency completes and uses a 

plan that includes all of the above elements to guide its efforts, it will not 

be properly positioned to obtain agreement with relevant stakeholders 

(e.g., Congress, OMB, federal agencies, and OPM senior executives) for its 

restructured retirement modernization initiative. Further, the agency will 

also not have a key mechanism that it needs to help ensure successful 

implementation of future modernization efforts. 

OPM has significant management weaknesses in five areas that are 

important to the success of its retirement modernization program: cost 

estimating, EVM, requirements management, testing, and program 

oversight. For example, the agency has not performed key steps, including 

the development of a cost estimating plan or completion of a work 

breakdown structure, both of which are necessary to develop a reliable 

program cost estimate. Also, OPM has not established and validated a 

performance measurement baseline, which is essential for reliable EVM. 

Further, although OPM is revising its previously developed system 

requirements, it has not established processes and plans to guide this 

work. Nor has the agency addressed test activities, even though 

developing processes and planning test activities early in the life cycle are 

recognized best practices for effective testing. Furthermore, although 

OPM’s Executive Steering Committee and Investment Review Board have 

OPM Is Not 

Positioned to 

Effectively Manage Its 

Retirement 

Modernization 

Initiative 

Page 16 GAO-09-529 OPM Retirement Modernization 
 

recently become more active regarding RetireEZ, these bodies did not 

exercise effective oversight in the past, which has allowed the 

aforementioned management weaknesses to persist. Notably, OPM has not 

established guidance regarding how these entities are to engage with the 

program when corrective actions are needed. Until OPM addresses these 

weaknesses, many of which we and others made recommendations to 

correct, the agency’s retirement modernization initiative remains at risk of 

failure. 

OPM Has Yet to Complete 

Key Steps in Developing a 

Reliable Cost Estimate for 

Retirement Modernization 

The establishment of a reliable cost estimate is a necessary element for 

informed investment decision making, realistic budget formulation, and 

meaningful progress measurement. A cost estimate is the summation of 

individual program cost elements that have been developed by using 

established methods and validated data to estimate future costs. 

According to federal policy, programs must maintain current and welldocumented estimates of program costs, and these estimates must span 

the full expected life of the program.10 Our Cost Estimating and 

Assessment Guide includes best practices that agencies can use for 

developing and managing program cost estimates that are comprehensive, 

well-documented, accurate, and credible, and provide management with a 

sound basis for establishing a baseline to measure program performance 

and formulate budgets.11 This guide identifies a cost estimating process 

that includes initial steps such as defining the estimate’s purpose (i.e., its 

intended use, scope, and level of detail); developing the estimating plan 

(i.e., the estimating approach, team, and timeline); defining the program 

(e.g., technical baseline description); and determining the estimating 

structure (e.g., work breakdown structure). According to best practices, 

these initial steps in the cost estimating process are of the utmost 

importance, and should be fully completed in order for the estimate to be 

considered valid and reliable. 

 

10OMB, Circular No. A-11, Preparation, Submission, and Execution of the Budget 

(Washington, D.C., Executive Office of the President, June 2008); Circular No. A-130 

Revised, Management of Federal Information Resources (Washington, D.C., Executive 

Office of the President, Nov. 28, 2000); and Capital Programming Guide: Supplement to 

Circular A-11, Part 7: Planning, Budgeting, and Acquisition of Capital Assets 

(Washington, D.C., Executive Office of the President, June 2006). 

11GAO, GAO Cost Estimating and Assessment Guide: Best Practices for Developing and 

Managing Capital Program Costs, GAO-09-3SP (Washington, D.C.: March 2009). 

Page 17 GAO-09-529 OPM Retirement Modernization 
 

OPM officials stated that they intend to complete a modernization program 

cost estimate by July 2009. However, the agency has not yet fully 

completed initial steps for developing the new estimate. Specifically, the 

agency has not yet fully defined the estimate’s purpose, developed the 

estimating plan, defined program characteristics in a technical baseline 

description, or determined the estimating structure. 

• With respect to the estimate’s purpose, agency officials stated that the 

estimate will inform the budget justification of RetireEZ for fiscal year 

2011 and beyond. However, the agency has not clearly defined the scope 

or level of detail of the estimate. 

• Regarding the estimating plan, agency officials stated that they have 

created a timeline to complete the estimate by July 2009. However, the 

agency has not documented an estimating plan that includes the approach 

and resources required to complete the estimate in the time period 

identified. 

• With respect to the technical baseline description, agency officials stated 

that they are in the advanced stages of developing a request for 

information and a concept of operations that will serve as the basis for a 

technical baseline description. These documents are expected to be 

reviewed for approval in April 2009. 

• Regarding the estimating structure, the agency has developed a work 

breakdown structure that identifies elements of the program to be 

estimated. However, the agency has not yet developed a work breakdown 

structure dictionary that clearly defines each element. 

Weaknesses in the reliability of OPM’s retirement modernization cost 

estimate have been long-standing. We first reported on the agency’s lack of 

a reliable cost estimate in January 2008 when we noted that critical 

activities, including documentation of a technical baseline description, had 

not been performed, and we recommended that the agency revise the 

estimate.12 Although OPM agreed to produce a reliable program cost 

estimate, the agency has not yet done so. Until OPM fully completes each 

of the steps, the agency increases the risk that it will produce an unreliable 

estimate and will not have a sound basis for measuring program 

performance and formulating retirement modernization program budgets. 

 

12GAO-08-345. 

Page 18 GAO-09-529 OPM Retirement Modernization 
 

OMB and OPM policies require major IT programs to use EVM to measure 

and report program progress.13 EVM is a tool for measuring program 

progress by comparing the value of work accomplished with the amount 

of work expected to be accomplished. Such a comparison permits actual 

performance to be evaluated, based on variances from the planned cost 

and schedule, and future performance to be forecasted. Identification of 

significant variances and analysis of their causes helps program managers 

determine the need for corrective actions. Before EVM analysis can be 

reliably performed, developing a credible cost estimate is necessary. In 

addition to developing a cost estimate, an integrated baseline review must 

be conducted to validate a performance measurement baseline and attain 

agreement of program stakeholders (e.g., agency and contractor officials) 

before reliable EVM reporting can begin. The establishment of a baseline 

depends on the completion of a work breakdown structure, an integrated 

master schedule, and budgets for planned work. 

Although the agency plans to begin reporting on the restructured 

program’s progress using EVM in April 2009, the agency is not yet 

prepared to do so because initial steps have not been completed and are 

dependent on decisions about the program that have not been made. 

Specifically, 

OPM Is Not Prepared to 

Perform Reliable Earned 

Value Management for 

Retirement Modernization 

• the agency has not yet developed a reliable cost estimate for the program; 

such an estimate, which is critical for establishing reliable EVM, is not 

expected to be complete until July 2009; 

• the agency does not plan to conduct an integrated baseline review to 

establish a reliable performance measurement baseline before beginning 

EVM reporting; and 

• the work breakdown structure and integrated master schedule that agency 

officials report they have developed may not accurately reflect the full 

scope and schedule because key program documentation, such as the 

concept of operations, has not been completed. 

This situation resembles the state of affairs that existed in January 2008, 

when we reported that OPM’s EVM was unreliable because an integrated 

baseline review had not been conducted to validate the program baseline.14

 

13OMB issued policy guidance (M-05-23) to agency chief information officers on improving 

technology projects that includes requirements for reporting performance to OMB using 

EVM (August 2005). OPM, Earned Value Management Policy (June 2005). 

14GAO-08-345. 

Page 19 GAO-09-529 OPM Retirement Modernization 
 

At that time we recommended, among other things, that the agency 

establish a basis for effective use of EVM by validating a program 

performance measurement baseline through a program-level integrated 

baseline review. Although the agency stated that it agreed, it did not 

address this recommendation. 

Until the agency has developed a reliable cost estimate, performed an 

integrated baseline review, and validated a performance measurement 

baseline that reflect its program restructuring, the agency is not prepared 

to perform reliable EVM. Engaging in EVM reporting without first 

performing these fundamental steps could again render the agency’s 

assessment unreliable. 

Well-defined and managed requirements are a cornerstone of effective 

system development and acquisition. According to recognized guidance, 

disciplined processes for developing and managing requirements can help 

reduce the risks of developing a system that does not meet user and 

operational needs.15 Such processes include (1) developing detailed 

requirements that have been derived from the organization’s concept of 

operations16 and are complete and sufficiently detailed to guide system 

development and (2) establishing policies and plans, including defining 

roles and responsibilities, for managing changes to requirements and 

maintaining bidirectional requirements traceability.17

OPM’s retirement modernization requirements processes include some, 

but not all, of the elements needed to effectively develop and manage 

requirements. The agency began an effort to better develop its retirement 

modernization requirements in November 2008. This effort was in 

response to the agency’s recognition that its over 1,400 requirements 

OPM Has Not Established 

Processes Needed to 

Effectively Develop and 

Manage Retirement 

Modernization 

Requirements 

 

15Carnegie Mellon Software Engineering Institute, Capability Maturity Model® 

Integration for Development, Version 1.2 (Pittsburgh, Pa., August 2006), and Software 

Acquisition Capability Maturity Model® (SA-CMM®) version 1.03, CMU/SEI-2002-TR-010 

(Pittsburgh, Pa., March 2002); and the Institute of Electrical and Electronic Engineers 

(IEEE), 1362-1998, IEEE Guide for Information Technology—System Definition—

Concept of Operations Document (New York, N.Y.,1998). 

16A concept of operations is a user-oriented document that describes the characteristics of 

a proposed system from the users’ viewpoint. 

17Maintaining bidirectional requirement traceability means that system-level requirements 

can be traced both backward to higher level business or operational requirements, and 

forward to system design specifications and test plans. 

Page 20 GAO-09-529 OPM Retirement Modernization 
 

lacked sufficient detail, were incomplete, and required further 

development. The agency intends to complete this requirements 

development effort in April 2009. However, the requirements will not be 

derived from OPM’s concept of operations because the agency is revising 

the concept of operations expected to be completed by April 2009, to 

reflect the program restructuring. Further, OPM documentation indicates 

that the agency has not yet determined the level of detail to which 

requirements should be developed. Additionally, agency officials stated 

that OPM is developing a requirements development process for 

retirement modernization. With respect to requirements management, 

OPM developed an organizational charter that outlined roles and 

responsibilities for supporting efforts to manage requirements. However, 

the agency does not yet have a requirements management plan. 

OPM’s prior experience with DBTS illustrates the importance of effective 

requirements development and management. According to RetireEZ 

program officials, insufficiently detailed requirements, poorly controlled 

requirements changes, and inadequate requirements traceability were 

factors that contributed to DBTS not performing as expected. Moreover, 

these requirements development and management weaknesses were 

identified, and recommendations for improvement were made by OPM’s 

independent verification and validation contractor before DBTS 

deployment. However, the agency has not yet corrected these weaknesses. 

Until OPM fully establishes requirements development and management 

processes, the agency increases the risk that it will 

(1) identify requirements that are neither complete nor sufficiently 

detailed and (2) not effectively manage requirements changes or maintain 

bidirectional traceability, thus further increasing agency risk that it will 

produce a system that does not meet user and operational needs. 

Effective testing is an essential component of any program that includes 

developing systems. Generally, the purpose of testing is to identify defects 

or problems in meeting defined system requirements and satisfying user 

needs. To be effectively managed, testing should be planned and 

conducted in a structured and disciplined fashion that adheres to 

recognized guidance and is coordinated with the requirements 

OPM Is Not Positioned to 

Effectively Manage 

Retirement Modernization 

Testing 

Page 21 GAO-09-529 OPM Retirement Modernization 
 

development process.18 Beginning the test planning process in the early 

stages of a program life cycle can reduce rework later in the program. 

Early test planning in coordination with requirements development can 

provide major benefits. For example, planning for test activities during the 

development of requirements may reduce the number of defects identified 

later and the costs related to requirements rework or change requests. 

Further, planning test activities early in a program’s life cycle can inform 

requests for proposals and help communicate testing expectations to 

potential vendors. 

OPM has not begun to plan test activities in coordination with developing 

its requirements for the RetireEZ program. According to OPM officials, the 

agency intends to begin its test planning by revising the previously 

developed DBTS test plans after requirements have been developed. 

However, the agency has not yet added test planning to its project 

schedule. 

Early test planning is especially important to avoid repeating the agency’s 

experience during DBTS testing when it identified more defects than it 

could resolve before system deployment. In January 2008, we reported 

that an unexpectedly high number of defects were identified during 

testing; yet, the deployment schedule had increased the risk of not 

resolving all defects that needed to be corrected before deploying DBTS. 

According to the RetireEZ program officials, the failure to fully address 

these defects contributed to the limited number of federal employees who 

were successfully processed by the system when it was deployed in 

February 2008. 

If it does not plan test activities early in the life cycle of RetireEZ, OPM 

increases the risk that it will again deploy a system that does not satisfy 

user expectations and meet requirements (i.e., accurately calculate 

retirement benefits) because of its potential inability to address a higher 

number of defects than expected. Moreover, criteria used to develop 

requests for proposals and communicate testing expectations to potential 

vendors could be better informed if the agency plans RetireEZ test 

activities early in the life cycle. 

 

18See for example, Carnegie Mellon Software Engineering Institute, Software Acquisition 

Planning Guidelines, CMU/SEI-2005-HB-006 (Pittsburgh, Pa., December 2005); IEEE 

Standard 829-2008, Standard for Software and System Test Documentation (July 2008); 

and IEEE Standard 1044-1993, Standard Classification for Software Anomalies 

(December 1993). 

Page 22 GAO-09-529 OPM Retirement Modernization 
 

GAO and OMB guidance calls for agencies to ensure effective oversight of 

IT projects throughout all life-cycle phases. Critical to effective oversight 

are investment management boards made up of key executives who 

regularly track the progress of IT projects such as system acquisitions or 

modernizations. These boards should maintain adequate oversight and 

track project performance and progress toward predefined cost and 

schedule goals, as well as monitor project benefits and exposure to risk. 

Another element of effective IT oversight is employing early warning 

systems that enable management boards to take corrective actions at the 

first sign of cost, schedule, and performance slippages. 

OPM’s Investment Review Board was established to ensure that major 

investments are on track by reviewing their progress and determining 

appropriate actions when investments encounter challenges. Despite 

meeting regularly and being provided with information that indicated 

problems with the retirement modernization, the board did not ensure that 

the investment was on track, nor did it determine appropriate actions for 

course correction when needed. For example, from January 2007 to 

August 2008 the board met and was presented with reports that described 

problems the retirement modernization program was facing, such as the 

lack of an integrated master schedule and earned value data that did not 

reflect the “reality or current status” of the program. However, meeting 

minutes indicate that no discussion or action was taken to address these 

problems. According to a member of the board, OPM guidance regarding 

how the board is to communicate recommendations and corrective 

actions when needed for the investments it is responsible for overseeing 

has not been established. 

In addition, OPM established an Executive Steering Committee to oversee 

retirement modernization. According to its charter, the committee is to 

provide strategic direction, oversight, and issue resolution to ensure that 

the program maintains alignment with the mission, goals, and objectives of 

the agency and is supported with required resources and expertise. 

However, the committee was inactive for most of 2008 and, consequently, 

did not exercise oversight of the program during a crucial period in its 

development. For example, from January 2008 until October 2008, the 

committee discontinued its formal meetings, and as a result, it was not 

involved in key program decisions, including the deployment of DBTS. 

Further, a member of the committee noted that OPM guidance for making 

recommendations and taking corrective actions also has not been 

provided. 

OPM Is Not Providing 

Effective Oversight for 

Retirement Modernization 

Page 23 GAO-09-529 OPM Retirement Modernization 
 

The ineffectiveness of the board and the inactivity of the committee 

allowed program management weaknesses in the areas of cost estimation, 

EVM, requirements management, and testing to persist and raise concerns 

about OPM’s ability to provide meaningful oversight as the agency 

proceeds with its retirement modernization. Without fully functioning 

oversight bodies, OPM cannot monitor modernization activities and make 

the course corrections that effective boards and committees are intended 

to provide. 

OPM’s retirement modernization initiative is in transition from a program 

that was highly dependent on the success of a major contract that no 

longer exists, to a restructured program that has yet to be fully defined. 

Although the agency has been able to partially implement a database of 

retirement information and improvements to customer service, it remains 

far from implementing six other key capabilities. Recognizing that much 

work remains, OPM has undertaken steps to restructure the retirement 

modernization program, but it has not yet produced a complete 

description of its planned program, including fundamental information 

about the program’s scope, implementation strategy, lines of responsibility 

and authority, management processes, and schedule. Further, OPM’s 

retirement modernization program restructuring does not yet include 

definitions of results-oriented goals and measures against which program 

performance can be objectively and quantitatively assessed. 

In addition, OPM has not overcome managerial shortcomings in key areas 

of program management, including areas that we have previously 

reported. Specifically, the agency is not yet positioned to develop a 

reliable program cost estimate or perform reliable EVM, both of which are 

critical to effective program planning and oversight. Nor has OPM 

overcome weaknesses in its management of system testing and defects, 

two activities that proved problematic as the agency was preparing to 

deploy the RetireEZ system that subsequently was terminated. Adding to 

these long-standing concerns are weaknesses in OPM’s process to 

effectively develop and manage requirements for whatever system or 

service it intends to acquire or develop. Finally, these weaknesses have 

been allowed to persist by entities within the agency that were ineffective 

in overseeing the retirement modernization program. 

As a consequence, the agency is faced with significant challenges on two 

fronts: defining and transitioning to its restructured program, and 

addressing new and previously identified managerial weaknesses. Until 

OPM addresses these weaknesses, many of which were previously 

Conclusions 

Page 24 GAO-09-529 OPM Retirement Modernization 
 

identified by GAO and others, the agency’s retirement modernization 

initiative remains at risk of failure. Institutionalizing effective planning and 

management is critical not only for the success of this initiative, but also 

for that of other modernization efforts within the agency. 

To improve OPM’s effort toward planning and implementing its retirement 

modernization program by addressing management weaknesses, we 

recommend that the Director of the Office of Personnel Management 

provide immediate attention to ensure the following six actions are taken: 

• Develop a complete plan for the restructured program that defines the 

scope, implementation strategy, lines of responsibility and authority, 

management processes, and schedule. Further, the plan should establish 

results-oriented (i.e., objective, quantifiable, and measurable) goals and 

associated performance measures for the program. 

• Develop a reliable cost estimate by following the best practice steps 

outlined in our Cost Estimating and Assessment Guide, including 

definition of the estimate’s purpose, development of an estimating plan, 

definition of the program’s characteristics, and determination of the 

estimating structure. 

• Establish a basis for reliable EVM, when appropriate, by developing a 

reliable program cost estimate, performing an integrated baseline review, 

and validating a performance measurement baseline that reflects the 

program restructuring. 

• Develop a requirements management plan and execute processes 

described in the plan to develop retirement modernization requirements in 

accordance with recognized guidance. 

• Begin RetireEZ test planning activities early in the life cycle. 

• Develop policies and procedures that would establish meaningful program 

oversight and require appropriate action to address management 

deficiencies. 

The Director of the Office of Personnel Management provided written 

comments on a draft of this report. (The comments are reproduced in app. 

II.) In the comments, OPM agreed with our recommendations and stated 

that it had begun to address them. To this end, the Director stated that the 

agency had, among other actions, begun revising its retirement 

modernization plans, developing a new program cost estimate, planning 

for accurate EVM reporting, incorporating recognized guidance in 

Recommendations for 

Executive Action 

Agency Comments 

and Our Evaluation 

Page 25 GAO-09-529 OPM Retirement Modernization 
 

requirements management planning, and planning test activities during 

requirements development. If the recommendations are properly 

implemented, they should better position OPM to effectively manage its 

retirement modernization initiative. The agency also provided comments 

on the draft report regarding our description of the federal retirement 

application process, as well as our characterizations of OPM’s EVM and 

requirements management capabilities vis-à-vis the retirement 

modernization program. In each of these instances, we made revisions as 

appropriate. 

We are sending copies of this report to the Director of the Office of 

Personnel Management, appropriate congressional committees, and other 

interested parties. In addition, the report is available at no charge on the 

GAO Web site at http://www.gao.gov. 

If you or your staffs have questions about this report, please contact me at 

(202) 512-6304 or melvinv@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

Valerie C. Melvin 

of this report. Key contributors to this report are listed in appendix III. 

ssues 

Director, Information Management and 

 Human Capital I

Page 26 GAO-09-529 OPM Retirement Modernization 
Appendix I: Objectives, Scope, and 

Methodology 

Page 27 GAO-09-529 

Appendix I: Objectives, Scope, and 

Methodology 

As requested, the objectives of our study were to (1) assess the status of 

the Office of Personnel Management’s (OPM) efforts toward planning and 

implementing the RetireEZ program and (2) evaluate the effectiveness of 

the agency’s management of the modernization initiative. 

To assess the status of OPM’s efforts toward planning and implementing 

the RetireEZ program, we 

• reviewed and analyzed program documentation, including program 

management plans, briefing slides, and project status documentation, to 

identify planned retirement modernization capabilities and determine to 

what extent these capabilities have been implemented; 

• evaluated the agency’s documentation about restructuring the program 

and analyzed the extent to which the documentation describes current and 

planned RetireEZ program activities; 

• identified and evaluated the agency’s program goals and measures and 

compared them to relevant guidance to determine the extent to which the 

goals and measures are described in results-oriented terms; 

• supplemented agency program documentation and our analyses by 

interviewing agency and contractor officials, including the OPM Director, 

Chief Information Officer, Chief Financial Officer, Director of 

Modernization, Associate Director for Human Resources Products and 

Services Division, and executives from Hewitt Associates and Northrop 

Grumman Corporation; and 

• observed retirement operations and ongoing modernization activities at 

OPM and contractor facilities in Washington, D.C.; Boyers, Pennsylvania; 

and Herndon, Virginia. 

To determine the effectiveness of OPM’s management of the retirement 

modernization initiative, we evaluated the agency’s management of 

program cost estimating, earned value management (EVM), requirements, 

test planning, and oversight and compared the agency’s work in each area 

with recognized best practices and guidance. Specifically, 

• to evaluate whether OPM effectively developed a reliable program cost 

estimate, we analyzed the agency’s program documentation and 

determined to what extent the agency had completed key activities 

described in our Cost Estimating and Assessment Guide; 

• to assess OPM’s implementation of EVM, we reviewed program progress 

reporting documentation and compared the agency’s plans for restarting 

OPM Retirement Modernization 
Appendix I: Objectives, Scope, and 

Methodology 

its EVM-based progress reporting against relevant guidance, including our 

Cost Estimating and Assessment Guide; 

• regarding requirements management, we evaluated OPM’s processes for 

developing and managing retirement systems modernization requirements 

and compared the effectiveness of those processes against recognized 

guidance; 

• to determine the effectiveness of the agency’s test planning for the 

retirement modernization, we reviewed program activities and test plans 

against best practices and evaluated the extent to which the agency has 

begun planning for these activities; and 

• we reviewed and analyzed documentation from program oversight entities 

and evaluated the extent to which these entities took actions toward 

ensuring the RetireEZ program was being effectively overseen. 

We also evaluated OPM’s progress toward implementing our open 

recommendations and interviewed OPM and contractor officials as noted. 

We conducted this performance audit at OPM headquarters in Washington, 

D.C., the Retirement Operations Center for OPM in Boyers, Pennsylvania, 

and contractor facilities in Herndon, Virginia, from May 2008 through April 

2009, in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives. 

Page 28 GAO-09-529 OPM Retirement Modernization 
Appendix II: Comments from the Office of Appendix II: Comments from the Office of Personnel Management 

Personnel Management 

Page 29 GAO-09-529 OPM Retirement Modernization 
Appendix II: Comments from the Office of 

Personnel Management 

Page 30 GAO-09-529 OPM Retirement Modernization 
Appendix II: Comments from the Office of 

Personnel Management 

Page 31 GAO-09-529 OPM Retirement Modernization 
Appendix II: Comments from the Office of 

Personnel Management 

Page 32 GAO-09-529 OPM Retirement Modernization 
Appendix II: Comments from the Office of 

Personnel Management 

Page 33 GAO-09-529 OPM Retirement Modernization 
Appendix II: Comments from the Office of 

Personnel Management 

Page 34 GAO-09-529 OPM Retirement Modernization 
Appendix II: Comments from the Office of 

Personnel Management 

Page 35 GAO-09-529 OPM Retirement Modernization 
Appendix II: Comments from the Office of 

Personnel Management 

Page 36 GAO-09-529 OPM Retirement Modernization 
Appendix II: Comments from the Office of 

Personnel Management 

Page 37 GAO-09-529 OPM Retirement Modernization 
Appendix II: Comments from the Office of 

Personnel Management 

Page 38 GAO-09-529 OPM Retirement Modernization 
Appendix II: Comments from the Office of 

Personnel Management 

Page 39 GAO-09-529 OPM Retirement Modernization 
Appendix III: GAO

A

 Staff Contact and

cknowledgments 

Page 40 GAO-09-529 

Appendix III: GAO Staff Contact and 

Acknowledgments 

Valerie C. Melvin (202) 512-6304 or melvinv@gao.gov

In addition to the contact named above, key contributions to this report 

were made by Mark T. Bird, Assistant Director; Barbara S. Collier; Neil J. 

Doherty; David A. Hong; Thomas J. Johnson; Rebecca E. LaPaze; Lee A. 

McCracken; Teresa M. Neven; Melissa K. Schermerhorn; Donald A. Sebers; 

and John P. Smith. 

OPM Retirement Modernization 

GAO Contact 

Staff 

Acknowledgments 

(310926) 
GAO’s Mission The Government Accountability Office, the audit, evaluation, and 

investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and policies; 

and provides analyses, recommendations, and other assistance to help 

Congress make informed oversight, policy, and funding decisions. GAO’s 

commitment to good government is reflected in its core values of 

accountability, integrity, and reliability. 

The fastest and easiest way to obtain copies of GAO documents at no cost 

is through GAO’s Web site (www.gao.gov). Each weekday afternoon, GAO 

posts on its Web site newly released reports, testimony, and 

correspondence. To have GAO e-mail you a list of newly posted products, 

go to www.gao.gov and select “E-mail Updates.” 

The price of each GAO publication reflects GAO’s actual cost of 

production and distribution and depends on the number of pages in the 

publication and whether the publication is printed in color or black and 

white. Pricing and ordering information is posted on GAO’s Web site, 

http://www.gao.gov/ordering.htm. 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or 

TDD (202) 512-2537. 

Orders may be paid for using American Express, Discover Card, 

MasterCard, Visa, check, or money order. Call for additional information. 

Contact: 

Web site: www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470 

Ralph Dawn, Managing Director, dawnr@gao.gov, (202) 512-4400 

U.S. Government Accountability Office, 441 G Street NW, Room 7125 

Washington, DC 20548 

Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800 

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, DC 20548 

Obtaining Copies of 

GAO Reports and 

Testimony 

Order by Phone 

To Report Fraud, 

Waste, and Abuse in 

Federal Programs 

Congressional 

Relations 

Public Affairs 

Please Print on Recycled Paper