U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

73–672 PDF 2012

S. Hrg. 112–518 

FEDERAL RETIREMENT PROCESSING: ENSURING 

PROPER AND TIMELY PAYMENTS 

HEARING 

BEFORE THE

OVERSIGHT OF GOVERNMENT MANAGEMENT, 

THE FEDERAL WORKFORCE, AND THE 

DISTRICT OF COLUMBIA SUBCOMMITTEE 

OF THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

FEBRUARY 1, 2012 

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

Printed for the use of the Committee on Homeland Security 

and Governmental Affairs 

( 

H605-41331-79W7 with DISTILLER

(II) 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

JOSEPH I. LIEBERMAN, Connecticut, Chairman 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK L. PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

CLAIRE MCCASKILL, Missouri 

JON TESTER, Montana 

MARK BEGICH, Alaska 

SUSAN M. COLLINS, Maine 

TOM COBURN, Oklahoma 

SCOTT P. BROWN, Massachusetts 

JOHN MCCAIN, Arizona 

RON JOHNSON, Wisconsin 

ROB PORTMAN, Ohio 

RAND PAUL, Kentucky 

JERRY MORAN, Kansas 

MICHAEL L. ALEXANDER, Staff Director 

NICHOLAS A. ROSSI, Minority Staff Director 

TRINA DRIESSNACK TYRER, Chief Clerk 

JOYCE WARD, Publications Clerk and GPO Detailee 

OVERSIGHT OF GOVERNMENT MANAGEMENT, THE FEDERAL 

WORKFORCE, AND THE DISTRICT OF COLUMBIA SUBCOMMITTEE 

DANIEL K. AKAKA, Hawaii, Chairman 

CARL LEVIN, Michigan 

MARY L. LANDRIEU, Louisiana 

MARK BEGICH, Alaska 

RON JOHNSON, Wisconsin 

TOM COBURN, Oklahoma 

JERRY MORAN, Kansas 

LISA M. POWELL, Majority Staff Director 

CHRISTINE WEST, Counsel 

RACHEL R. WEAVER, Minority Staff Director 

SEAN KENNEDY, Professional Staff Member 

AARON H. WOOLF, Chief Clerk 

H605-41331-79W7 with DISTILLER

(III) 

C O N T E N T S 

Opening statement: Page 

Senator Akaka .................................................................................................. 1 

Senator Johnson ............................................................................................... 2 

Senator Warner ................................................................................................ 3 

Prepared statement: 

Senator Akaka .................................................................................................. 39 

WITNESSES 

WEDNESDAY, FEBRUARY 1, 2012 

Hon. John Berry, Director, U.S. Office of Personnel Management ..................... 5 

Hon. Patrick E. McFarland, Inspector General, U.S. Office of Personnel Management ................................................................................................................. 8 

Valerie C. Melvin, Director of Information Management and Technology Resource Issues, U.S. Government Accountability Office ..................................... 9 

Joseph A. Beaudoin, President, National Active and Retired Federal Employees Association ..................................................................................................... 28 

George Nesterczuk, President, Nestercsuk and Associates .................................. 29 

ALPHABETICAL LIST OF WITNESSES

Beaudoin, Joseph A.: 

Testimony .......................................................................................................... 28 

Prepared statement .......................................................................................... 69 

Berry, Hon. John: 

Testimony .......................................................................................................... 5 

Prepared statement .......................................................................................... 41 

McFarland, Hon. Patrick E.: 

Testimony .......................................................................................................... 8 

Prepared statement .......................................................................................... 45 

Melvin, Valerie C.: 

Testimony .......................................................................................................... 9 

Prepared statement .......................................................................................... 54 

Nesterczuk, George: 

Testimony .......................................................................................................... 29 

Prepared statement .......................................................................................... 73 

APPENDIX 

Questions and Responses for the Record from: 

Mr. Berry ........................................................................................................... 79 

Mr. McFarland .................................................................................................. 89 

Ms. Melvin ........................................................................................................ 93 

Background .............................................................................................................. 96 

Chart referenced by Senator Warner ..................................................................... 103 

H605-41331-79W7 with DISTILLER

H605-41331-79W7 with DISTILLER

(1) 

FEDERAL RETIREMENT PROCESSING: 

ENSURING PROPER AND TIMELY PAYMENTS 

WEDNESDAY, FEBRUARY 1, 2012 

U.S. SENATE, SUBCOMMITTEE ON OVERSIGHT OF GOVERNMENT

MANAGEMENT, THE FEDERAL WORKFORCE, AND THE DISTRICT OF COLUMBIA, OF THE COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, Washington, DC. 

The Subcommittee met, pursuant to notice, at 2:31 p.m., in Room 

342, Dirksen Senate Office Building, Hon. Daniel K. Akaka, Chairman of the Subcommittee, presiding. 

Present: Senators Akaka, and Johnson. 

Also present: Senator Warner. 

OPENING STATEMENT OF SENATOR AKAKA 

Senator AKAKA. This hearing of the Subcommittee on Oversight 

of Government Management (OGM), the Federal Workforce, and 

the District of Columbia will come to order. 

Aloha and welcome, everyone. Thank you for being here for today’s hearing, which will focus on processing Federal retirements. 

I just want to clarify that it will not address Federal retirement 

benefits or the status of the Civil Service Disability Fund. 

Discussing the administration of Federal retirement benefits is 

timely and important. Recent news articles have told us stories of 

people waiting months on end for retirement benefits while millions of dollars are improperly paid to annuitants who have passed 

away. That is the kind of publicity the Office of Personnel Management (OPM) has had, but it is changing. This is not the type of 

Federal Government that will regain the faith of the American 

public and is not a government living up to the potential that I 

know it has. 

As the Federal Government’s human resource agency, the Office 

of Personnel Management (OPM) administers retirement benefits 

for roughly 2.5 million Federal retirees and processes approximately 100,000 new claims each year. OPM uses a system that is 

mostly paper-based. Over the past 24 years, the agency has embarked on a number of information technology (IT) projects to automate retirement processing, most of which were contracted out to 

private companies at that time. Each one failed after millions of 

dollars and years of development were poured into them. The Government Accountability Office (GAO) found that management 

weaknesses like poor contracting oversight were the source of 

H605-41331-79W7 with DISTILLER

2 

OPM’s troubles. I look forward to hearing more about how the 

agency will improve its management of IT projects and how it will 

approach the need to modernize in the future. 

Failed IT contracts are at the root of OPM’s current challenges. 

OPM reduced its retirement staff significantly through attrition 

from 2005 to 2009 in anticipation of an automated system that 

never materialized. The result is a backlog of over 48,000 claims 

that the agency is struggling to address. 

To recapture some of its lost processing capacity, OPM plans to 

hire 56 new adjudicators. According to OPM, the average wait for 

a full annuity is 5 months, and people quickly receive interim payments that are approximately 80 percent of what their final annuity is later determined to be. 

Although those statistics are not good, as Members of Congress, 

we all hear stories from retirees who have even worse experiences. 

News articles and constituent calls describe a system where people 

wait up to one year to receive full benefits while living off a small 

percentage of their final annuity. 

Today, I hope to gain a better understanding of how OPM will 

eliminate the backlog. In the meantime, it must make sure no one 

waits this long and that interim pay is more accurate, even for 

those with complex retirement applications. I know there has been 

improvement made and we will hear some of that today. 

Another common concern from recent retirees is poor customer 

service. I understand that OPM’s new strategic plan addresses this. 

I look forward to hearing more about how the plan creates more 

efficient retirement processes and increases the effectiveness of its 

customer service. 

In this era of financial constraints, every effort must be made to 

safeguard our tax dollars. I am troubled by the improper payment 

recommendations from the Inspector General (IG) that date back to 

2005. They highlight inadequate internal controls to detect and 

prevent waste. This has resulted in some $600 million being paid 

to deceased annuitants over the past 5 years. While these large improper payments are unacceptable, they are well under one percent 

of the agency’s total annuity payments. 

OPM has also made progress on implementing the Inspector 

General’s recommendations; it reduced the number of improper 

payments made in the last year, and recovered most of the payments. However, OPM must do even more to prevent this sort of 

waste from happening, and I am sure we will hear some of those 

improvements. 

I appreciate our witnesses’ dedication to improving the Federal 

retirement system, particularly Director Berry, whose willingness 

to be held accountable and his resolve to reform broken processes 

are encouraging. I look forward to hearing from him and our other 

witnesses as we try to find solutions to these important issues. 

I am pleased that the Subcommittee’s Ranking Member, Senator 

Ron Johnson, is here today and I am going to call on him for his 

opening statement. Senator Johnson. 

OPENING STATEMENT OF SENATOR JOHNSON 

Senator JOHNSON. Thanks, Mr. Chairman and aloha. That is always fun to say. 

H605-41331-79W7 with DISTILLER

3 

Senator AKAKA. Aloha. 

Senator JOHNSON. I would like to thank the witnesses for coming 

on this beautiful, almost Hawaiian-like weather day here. I am 

looking forward to your testimony. 

Mr. Chairman, I think you have stated the case pretty well so 

I do not think I need to repeat too much, other than just to basically say what I am going to be interested in hearing is what we 

can do to improve the system, obviously. I do not quite understand 

what is so difficult about computerizing the system, so we are 

going to want to get into that. 

And I will certainly want to question why we would want to put 

on additional individuals. Just as I do the math, if you take a look 

at the number of people that are basically retiring, divide it by the 

number of people, my calculations come up with about three applications, or about three per day per individual, which does not seem 

like a particularly onerous workload, and so I am going to want to 

find out what is so complex about determining eligibility in these 

cases. 

Mr. Chairman, as you mentioned, $600 million paid to deceased 

individuals over the last 5 years, we are certainly going to want to 

explore how that can happen, and probably even more important, 

how can we prevent it in the future. 

I know you said that this is not necessarily going to be about the 

level of pay and benefits, but there have been a couple of studies 

released just recently talking about the level of Federal pay in relationship to the private sector and I think that is something we may 

want to discuss a little bit, as long as we have Mr. Berry here, because I think it is extremely important in a period and time where 

we are running, last year, $1.3 trillion a year deficits, this year 

projected over a trillion dollars. I think we are all in agreement, 

we do not want to underpay individual who work for the Federal 

Government or any public sector employee, but we simply cannot 

afford to overpay them. So I think we need to take a look at that 

and those types of studies that benchmark Federal pay and benefits with the private sector are, I think, just extremely important 

and, I think, valid, because after all, it is the taxpayers that do pay 

the taxes to pay the salaries. I think it is just something that is 

very important. 

Again, with that, I want to again thank the witnesses and look 

forward to your testimony. 

Senator AKAKA. Thank you very much, Senator Johnson. 

I am pleased to welcome Senator Mark Warner as a guest of the 

Subcommittee. Although Senator Warner is not a Member of the 

Subcommittee, he represents a large number of Federal workers 

and has been engaged on these issues. Senator Warner, will you 

please begin with your statement. 

OPENING STATEMENT OF SENATOR WARNER 

Senator WARNER. Aloha, Mr. Chairman—— 

Senator AKAKA. Aloha. 

Senator WARNER [continuing]. And let me thank you and Ranking Member Johnson for the courtesy to let me sit up here and, 

again, be part of this very important hearing. I just want to take 

a couple minutes because I do want to get to the witnesses. 

H605-41331-79W7 with DISTILLER

4 

But as you mentioned, I have 140,000 retirees in Virginia and we 

have some pretty upset folks. We have members from my staff here 

who receive the calls of frustrated retired Federal workers on a 

daily basis. Mr. Chairman, I wish the returns were just—the delay 

were only 12 months. Literally, just today, we worked on a case 

where a Federal retiree had waited 17 months to get their retirement benefits. Now, next month, she is going to get $50,000, but 

she has had to wait 17 months to get those benefits that were due 

to her. 

It is not just Virginia. We actually had somebody, a Colorado retiree who was getting 50 percent of her benefits. I wish that the 

retirees who were waiting this extended period of time were getting 

80 percent. We are finding many getting zero or 50 percent. This 

woman was getting 50 percent for 12 months. She finally got so 

frustrated with the bureaucracy, got in her car and drove here demanding answers. Now, that is just not the level of customer service, government service. It accentuates all of the kind of worst images of Federal Government performance. 

I have a series. I am going to skip a couple of my charts because 

they are going to infringe on the Chair, but Mr. Berry, I have read 

your plan and I know this is not a new problem. OPM has been 

grappling with this issue since 1987. And I think the Chairman 

pointed out some of the earlier efforts to try to upgrade, and I 

share Senator Johnson’s concern of why we cannot seem to get the 

IT on this right. But, candidly, if your plan is that it is going to 

take 18 months to get the wait time down to 60 days, I just do not 

think that is acceptable, not just for my retirees, but it should not 

be the level of service we expect from our government. 

So I hope that we will see a priority for those who have been on 

the backlog the longest, kind of get their cases resolved first. I do 

believe—the Chairman mentioned the OPM Web site says it takes 

18 weeks to resolve a case. We have seen, and I will get into this 

in questions, other areas of government where there have been 

wait times where there have been SWAT teams put in and at least 

you can get some kind of ability to check on the status of your processing. 

And echoing what Senator Johnson said, it seems like OPM’s 

processes are very outdated with paper, and I concur with Senator 

Johnson that it is three to four applications a day. Well, the Navy 

does 6 to 7 a day. I hope we will get some explanation of why the 

Navy—and again, you have bigger numbers. 

And also, having met with our friends from the National Active 

and Retired Federal Employees (NARFE) and others, I know that 

part of the challenge is going to be how you get the materials from 

all the other agencies and how we hold a hammer to all those other 

agencies on reporting the data to you, and we have some ideas on 

that. 

And finally, because I cannot pass up without at least one chart, 

OPM’s Fiscal Year 2011 Retirement Services’ budget was over $91 

billion and they processed 80,356 claims. So just doing basic math, 

that shows the average cost to process each claim was $1,134.38. 

Now, as a former Governor, I thought, well, let me check someplace 

else. So I called our retirement system. And let me acknowledge, 

the Virginia Retirement System (VRS), is much smaller than the 

H605-41331-79W7 with DISTILLER

5 

1The prepared statement of Mr. Berry appears in the appendix on page 41. 

Federal level, but they do have 600,000 beneficiaries. They pay out 

$3.2 billion a year. VRS says it costs, on an average, $115 to process each retirement claim and VRS processes initial payments in 

37 days. 

So whether it is the Navy or whether it is some of our State systems, Mr. Chairman, I really appreciate you holding this hearing, 

because this is not the level of service or the level of cost structure 

that I think our Federal retirees deserve, and candidly, as Senator 

Johnson mentioned, the taxpayers deserve. So thank you for including me this morning, Mr. Chairman. 

Senator AKAKA. Thank you very much, Senator Warner. 

Now, I would like to welcome our first panel of witnesses to the 

Subcommittee. The Honorable John Berry is the Director of the Office of Personnel Management. The Honorable Patrick McFarland 

is the Inspector General of the Office of Personnel Management. 

And Ms. Valerie Melvin is the Director of Information Management 

and Technology Resource Issues at the U.S. Government Accountability Office. 

It is the custom of the Subcommittee to swear in all witnesses 

at this time and I ask you to please stand and raise your right 

hand. Do you swear that the testimony you are about to give before 

the Subcommittee is the truth, the whole truth, and nothing but 

the truth, so help you, God? 

Mr. BERRY. I do. 

Mr. MCFARLAND. I do. 

Ms. MELVIN. I do. 

Senator AKAKA. Thank you. Let the record note that the witnesses answered in the affirmative. 

Mr. Berry, will you please proceed with your statement. 

TESTIMONY OF HON. JOHN BERRY,1 DIRECTOR, U.S. OFFICE 

OF PERSONNEL MANAGEMENT 

Mr. BERRY. Chairman Akaka and Ranking Member Johnson and 

Senator Warner, thank you for the opportunity to be here with you 

today. 

I share your frustration. The current delays in our retirement 

processing are unacceptable. Eliminating the current backlog is my 

highest priority for 2012. It is the agency’s goal to eliminate this 

backlog within 18 months from January, as we issued the new 

strategic plan, and provide retirees with their full annuity payments within 60 days of their retirement by July 2013 in all but 

the most complex of cases. We are going to do everything in our 

power to do this faster and put everything on it we can to move 

that needle further, but I also do not want to mislead this Subcommittee as to the challenge before us. 

To accomplish this, we have developed a strategic plan which relies on four central pillars: People, productivity and process improvement, partnering with agencies, and partial progressive information technology improvements. It may be too early to tell, but 

I believe that our efforts are starting to bear fruit. Between the 

staffing changes, process improvements, a greater sense of urgency, 

H605-41331-79W7 with DISTILLER

6 

and some of the other reforms I will discuss, we processed nearly 

20 percent more cases this January than we did last January. 

Every January, we receive our largest number of incoming retirement cases, and as expected in the plan, with the addition of 

21,000 new cases last month, the current backlog now stands at 

62,000 cases. To ensure transparency and focus, we will be reporting this number, our total backlog, to both you and the House Committees on a monthly basis on the fifth day of every month, in 

other words, giving us that so that we can accurately report those 

numbers to you. We will also be using them as our benchmark to 

drive reforms with our people. 

Let me talk about our people. Our Retirement Processing Division has been understaffed. Historically, what happened was after 

four failed attempts at IT modernization, just before I arrived, the 

budget was adjusted and positions were left vacant or reduced 

under the presumption that a retirement automated system would 

be online to handle the process. So what OPM did 4 years ago was 

to draw down their staff, unacceptably, without ensuring that the 

IT solution was in place. What has happened, obviously, since, is 

with that lower staff, frozen budgets, we have not been able to rebuild to provide for the staffing of this that I would like. 

What we have put in place is through efficiencies and tight management within our budget, we have recognized we have just got 

to get the people back to where we were. Last year, we put 40 more 

legal administrative specialists on this case. I have readjusted our 

budget this year and will be adding another 40 along with another 

20 customer service representatives. Taken together, with last year 

and this year, this will put us back where we were 4 years ago. 

I should say, of those 56 new hires, all have been selected. Thirty 

have been hired and are already beginning their training. 

To improve the retirement process, the U.S. Navy Lean/SixSigma Team from Crane, Indiana, the Naval Surface Warfare Center (NSWC), has been with us, three visits to our retirement operation, and they have given us wonderful advice and recommendations. We are already beginning to implement those recommendations. 

And, as I mentioned, the transparency of reporting on a benchmark, not only to our employees and our managers, but to the public and to the Congress on a monthly basis, will make sure our feet 

are held to the fire. 

Along with our internal efforts, the agency is also working in 

partnership with the Chief Human Capital Officers Council 

(CHCO), and all of our agency partners, like the Postal Service, 

who submit records to us for processing. Many of those records 

come in now in an incomplete status, and one of our longest lag 

times is assembling the paperwork so that we can accurately adjudicate the case. 

As we are going to discuss, we want to avoid improper payments, 

as well, and so we have to be careful to have a complete file before 

we can make that final adjudication. But we are working on improving that. 

And I am happy to say, I just met this week with the Postmaster 

General and they have agreed, along with the Department of Defense (DOD), to pilot an initiative with us where they can automate 

H605-41331-79W7 with DISTILLER

7 

and send us complete cases. If they can do that, that is going to 

be of phenomenal assistance. 

Additionally, the plan recognizes that further automation is absolutely vital to our success. We are exploring both short-term, medium-term, and long-term solutions that will learn from the past 

mistakes that our agency has endured on this issue. But we have 

a great Chief Information Officer (CIO). Underneath him, we have 

hired a new Chief Technology Officer (CTO). He comes to us, David 

Bowen, from the Federal Aviation Administration (FAA). He is 

going to be leading our coordinating effort on this to ensure that 

we can deliver small, bite-size automated efforts that will significantly increase our processing ability and capabilities and accuracy—the time and the accuracy—and do it in a smart, fast way. 

We will be looking to the private sector to join with us. We will be 

looking to some of our own employees. But obviously, we need to 

do as much as we can as fast as we can in this area. 

We are also going to increase the interim payments, and to the 

maximum extent possible under the law and come as close to the 

line, recognizing we have to be very careful not to go over that line 

where we might have improper payments. But we are going to do 

everything we can to maximize interim payments for people who 

are stuck until we can get this backlog behind us. 

Finally, there has been some publicity regarding the Inspector 

General’s Office report on dealing with payments made to annuitants who are now deceased. OPM regards any overpayment as 

unacceptable. But as noted by the Inspector General, I am proud 

that our improper payment rate is extraordinarily low. It is less 

than two-tenths of one percent. Now, we have implemented 10 of 

the 14 recommendations by the Inspector General. I have promised 

Patrick that we will quickly implement the remaining four. 

But also, this is such an important issue, and we do not want 

to lose sight of this, because it is incredibly critical that we not fall 

into improper payments because we are dealing with large 

amounts of money. So even a small percentage is an unacceptable 

amount. I have agreed to work with Patrick, and over the next 6 

weeks we will introduce an amendment to this strategic plan, an 

additional strategic plan that is going to show how both of us together are going to fix improper payments until we can get it down 

to zero. So we are not just going to rest on completing the past 14 

recommendations. We are going to have a plan going forward that 

we will develop together that we can give to you within 6 weeks 

that will, again, hold our feet to the fire on resolving improper payments going forward. 

Last, I would like to point out that of the $600 million of the improper payments that was reported in the IG report, over $500 million of it has already been recovered through our efforts working 

hand-in-glove with the Inspector General. Now, we are not going 

to rest until the remaining $100 million is in hand, but again, that 

is—we are going to continue to keep focus, energy, and attention 

on this until this problem is licked. 

With that, I thank you very much for the opportunity to testify 

and be with you today and look forward to your questions. 

Senator AKAKA. Thank you very much, Director Berry. 

Mr. McFarland, will you please proceed with your statement. 

H605-41331-79W7 with DISTILLER

8 

1The prepared statement of Mr. McFarland appears in the appendix on page 45. 

TESTIMONY OF PATRICK E. MCFARLAND,1 INSPECTOR 

GENERAL, U.S. OFFICE OF PERSONNEL MANAGEMENT 

Mr. MCFARLAND. Good afternoon, Chairman Akaka, Ranking 

Member Johnson, Senator Warner, and Members of the Subcommittee. My name is Patrick McFarland. I am the Inspector 

General of the Office of Personnel Management. Thank you for inviting me to testify at today’s hearing about OPM’s processing of 

retirement payments. 

Today, I will touch on two tasks performed by OPM’s Retirement 

Services Office: The processing of retirement claims and the identification and prevention of improper payments to deceased annuitants. 

Earlier this month, OPM unveiled a new strategic plan to address the current backlog in processing retirement claims. This 

plan is a big step in the right direction. Based upon our initial review of the strategic plan, we asked OPM about various details not 

presented in the plan as of yet. For example, we would like to see 

interim milestones that would allow OPM to track its progress toward eliminating the backlog in 18 months. Furthermore, we want 

to be sure there is a commitment to revisit the plan periodically to 

make modifications as necessary. 

We also have concerns regarding the scaling back of the accuracy 

review process. This will obviously result in a higher risk of error 

in the processing of retirement claims. We would like to see how 

OPM plans to address the higher degree of risk for improperly paying annuities. 

While I am pleased that OPM is aggressively addressing the retirement claims backlog, I would like to reemphasize my concerns 

regarding OPM’s pattern of making improper payments to deceased 

annuitants, requiring the expenditure of significant resources to recover these monies. Resources would be better spent identifying 

and, more importantly, preventing improper payments from being 

made. The identification and removal of even a handful of deceased 

annuitants from the annuity roles will more than pay for the time 

and expense incurred by OPM in any prevention efforts. 

We have been working closely with OPM on this issue for over 

6 years, and while improvements have certainly been achieved, systemic problems remain. As Director Berry agrees, improper payments to deceased annuitants can be remedied only by a comprehensive reform effort. To this end, he has committed to developing a strategic plan to address this problem, similar to the one 

OPM has just issued regarding the retirement claims backlog. 

I would like to briefly update you using information provided to 

us by OPM on the agency’s progress in implementing some of the 

recommendations contained in our most recent report, issued in 

September 2011. First, OPM continues to conduct an annual computer match between the OPM retirement annuity roles and the 

Social Security Death Master File. Performing this match allows 

OPM to identify deaths that were not included in the weekly file 

of deaths reported by the Social Security Administration (SSA). In 

2009 and 2010 alone, these annual matches identified over 1,000 

deaths that were previously unknown to OPM. The agency is curH605-41331-79W7 with DISTILLER

9 

1The prepared statement of Ms. Melvin appears in the appendix on page 54. 

rently conducting its third consecutive annual match and it is approximately 85 percent complete. 

Second, OPM is analyzing IRS Forms 1099–R mailed to annuitants that were returned to the agency as undeliverable. These are 

important documents that annuitants need to file for their annual 

tax returns. OPM is currently reviewing the undeliverable Forms 

1099–R mailed out in January 2010. To our knowledge, OPM has 

only reviewed a small percentage of the 33,000 returned forms. 

Moreover, the agency has not begun reviewing the undeliverable 

forms mailed in January 2011 and will soon begin receiving undeliverable forms mailed in January 2012. This severe backlog requires immediate attention and OPM must develop a coordinated 

strategy to address it. 

Third, OPM should develop a permanent working group of retirement program subject matter experts to focus on improving the retirement program’s integrity. Those who wish to defraud the government will continue to develop new ways to do so. Therefore, 

OPM must also constantly seek to improve and adapt to this increasingly automated world. Having a permanent working group 

dedicated to the identification and prevention of improper payments is necessary to protecting the integrity of the retirement 

trust funds. 

As OPM moves forward to address these concerns through the 

development of a comprehensive strategic plan, we believe that the 

Improper Payments Elimination and Recovery Act of 2010 (IPERA) 

would provide OPM with useful guidance. Among other things, 

IPERA requires agencies to conduct risk assessments, publish corrective plans, and publish and meet annual reduction targets. 

IPERA should act as a guidepost for OPM’s new strategic plan. 

In closing, as OPM tackles the retirement claims processing 

backlog, I believe that it must also develop a plan to address the 

egregious long-term improper payments with which the agency currently struggles. Over the past 6 years, we have watched as the 

agency has adopted new measures to combat improper payments. 

However, these measures were not consistently pursued and the efforts eventually stalled. 

Despite this, I am confident that Director Berry’s enthusiastic 

commitment to eliminating egregious long-term improper payments 

will result in an effective and sustainable identification and prevention policy. 

Thank you for inviting me. 

Senator AKAKA. Thank you very much for your statement, Mr. 

McFarland. 

Ms. Melvin, will you please proceed with your statement. 

TESTIMONY OF VALERIE C. MELVIN,1 DIRECTOR OF INFORMATION MANAGEMENT AND TECHNOLOGY RESOURCES ISSUES, 

U.S. GOVERNMENT ACCOUNTABILITY OFFICE 

Ms. MELVIN. Good afternoon, Mr. Chairman, Ranking Member 

Johnson, Senator Warner, and Members of the Subcommittee. 

Thank you for inviting me to testify at today’s hearing on OPM’s 

H605-41331-79W7 with DISTILLER

10 

efforts to manage the system that is crucial to the processing of 

Federal employee retirement benefits. 

The use of information technology is integral to carrying out this 

important responsibility, and for over two decades, the agency attempted to modernize the retirement process by automating paperbased processes and replacing its antiquated information systems. 

However, as you are aware, its efforts were largely unsuccessful. 

Reports that we issued in 2005, 2008, and 2009 on the agency’s efforts toward planning and implementing a modernized system 

highlighted a long history of undertaking projects that did not yield 

the intended outcomes. At your request, my testimony today summarizes our findings on these efforts and the challenges OPM has 

faced in managing them. 

Overall, our studies found that OPM was hindered by weaknesses in a number of important management disciplines that are 

essential to successful IT modernizations. These includes project 

management, risk management, and organizational change management. For example, in reporting on the agency’s efforts in 2005, 

we noted that while it had defined major retirement modernization 

system components, OPM had not identified the deficiencies among 

them, thus increasing the risks that delays in one project activity 

could hinder progress in others. 

OPM also did not have a process for identifying and tracking 

project risk and mitigation strategies on a regular basis and it did 

not have a plan that would help users transition to different job responsibilities after deployment of a new system. These deficiencies 

existed over numerous years in which OPM planned, analyzed, and 

redirected the program, but without delivering the modernized capabilities. 

In 2008, as the agency was on the verge of deploying a system, 

we raised other management concerns and offered recommendations for improvement. Specifically, test results one month prior to 

deploying a major system component showed that it had not performed as intended. Also, defects and a compressed testing schedule increased the risks that the deployed system would not work 

as planned. Further, the cost estimate that OPM had developed 

was not supported by documentation needed to establish its reliability. And finally, the baseline against which OPM was measuring program progress did not reflect the full scope of the project, 

meaning that variances from planned performance would not be 

identified. 

OPM nonetheless deployed a limited version of the modernized 

system in February 2008. However, the system did not work as expected and the agency suspended the system’s operation and began 

restructuring the modernization program. 

In April 2009, we again reported on the initiative, noting that 

the agency still remained far from achieving the capabilities it had 

envisioned. Significant weaknesses continued to exist in the previously identified areas and we noted additional weaknesses, as 

well. Specifically, OPM lacked a plan describing how the program 

would proceed after terminating the earlier systems contract and 

it lacked a fully functioning oversight body to monitor its modernization projects. 

H605-41331-79W7 with DISTILLER

11 

OPM agreed with all of our recommendations and took steps toward addressing them. Ultimately, however, it terminated the Retirement Modernization Program in February 2011. The agency 

subsequently stated that it did not plan to undertake another 

large-scale modernization effort, as Director Berry has alluded to. 

In mid-January, OPM released a new plan describing its intention to improve retirement processing through targeted incremental 

actions, such as hiring new staff and working with agencies to improve data quality. The plan also identifies intended IT improvements to automate the retirement application process. However, it 

does not address how the agency intends to modify the many legacy 

systems that currently support the retirement process. 

Moreover, even as it implements this plan, it is essential that 

OPM fully address the deficiencies and institutionalize the IT management capabilities highlighted in our studies. Without doing so, 

the agency will not be effectively positioned to ensure the success 

of any future retirement modernization projects that it pursues. 

This concludes a summary of my statement and I look forward 

to responding to your questions. 

Senator AKAKA. Thank you very much, Ms. Melvin, for your 

statement. 

Director Berry, you testified that Retirement Services staff was 

reduced significantly through attrition and anticipation of an automated system that never materialized. Please explain the impact 

this had on the agency’s ability to keep pace with retirement claims 

as well as why you believe it is necessary to rebuild Retirement 

Services’ staff. 

Mr. BERRY. Mr. Chairman, I think as you have heard, and let me 

just say, I agree with all of the points that GAO has made as well 

as our Inspector General, so there is no disagreement in terms of 

my viewpoint and their testimony. 

When we talk about some of the legacy systems that GAO mentioned, some of the pieces that we are dealing with in terms of automation still use COBOL, to give you a sense of what we are trying to manage, improve, and enhance. I have challenged our people 

saying, look, we have just got to take those systems and calculators 

that are critical to the functioning of this system and get them 

brought into the 21st century. And so that is one of the things that 

Dave Bowen and our CIO and our CTO are going to be dramatically working on, and I can promise you they are going to be applying the lessons the GAO has flagged for us in terms of having the 

oversight and the central quality control through the CIO’s shop 

and operation to guarantee that we do not repeat the mistakes and 

the four failed IT attempts of the past. 

But, Mr. Chairman, also, right now, I have to be honest with 

you. Not all of the data that comes to us from all of the agencies 

across the Federal Government comes to us in an automated form. 

We are still managing thousands of pieces—millions of pieces of 

paper on an annual basis. Some information is automated and we 

are working hard to try to get to a place where all of the incoming 

information will be automated. But we are still in a paper and pencil world without the IT solution to address what is a real increase 

in retirements and backlogs. 

H605-41331-79W7 with DISTILLER

12 

Our Postal Service draw-down has increased the demand. The 

buyouts of agencies, and as agencies tighten their belts, we know 

we are going to have increases in retirements coming in. This January alone was higher than last January, so we are starting to see 

some of that. 

I do not have the IT solution to address it, and so for at least 

the time being, and this is one, Mr. Johnson, I would agree with 

you, the preference would be if we could grab an automated IT solution. But for the short-term, one does not exist. And so I have increasing numbers and less people. I just need to get the bodies 

back, get them trained to get us through the next few years until 

we can get more IT solutions up and running that will be accurate 

and improve the service to handle the volume loads. 

I would agree with both your opening statements, that we have 

to be smarter in how we do IT so that we do not have to look for 

this forever. But for the foreseeable future, we are dealing with a 

paper and pencil process and that is why I am hiring more people 

and doing it within a frozen budget. 

Senator AKAKA. Thank you, Mr. Berry. 

Mr. McFarland, you testified that you believe OPM is on the 

right track with hiring additional retirement staff. Please elaborate 

on why you believe additional staff is necessary to make progress 

on the claims backlog and improper payments. 

Mr. MCFARLAND. Mr. Chairman, I think, without question, that 

the planned hiring of these specific people for these jobs is absolutely necessary. I think that for OPM at this point, after so many 

years, to have to acknowledge that there are so many claims in arrears is just—it is just a sad situation when that has to happen. 

And so I know that, without any hesitation, that when this new 

plan that the Director has talked about is put into effect, it should 

make all the difference in the world. But it will only make all the 

difference in the world if the leadership maintains it at a level that 

requires everyday discussions. It cannot be something that just 

ends up hanging on a wall: ‘‘This is our vision and this is our mission.’’ And I do not anticipate that this will happen at all. But I 

think it is very necessary to hire these people to try and catch up 

with the problem at hand. 

Senator AKAKA. Thank you very much. 

Mr. BERRY. Mr. Chairman. 

Senator AKAKA. Yes, Director Berry. 

Mr. BERRY. Could I just add to that, with your indulgence, if I 

could, and I agree with Patrick. To ensure that we keep focus on 

this, not only will I be involved, but I have created three key leaders to watch this on a daily basis. I have a Chief Operating Officer 

who is a career senior executive in our organization that I have 

created and he is going to be leading this effort with my Deputy 

Chief of Staff, who is a political appointee but is one of the sharpest young men I have ever worked with, and my Associate Director, 

who is sitting directly behind me, is Ken Zawodny, and he is my 

new leader on this. 

He is the director in charge of my retirement operation. I 

brought him from my Investigative Services Unit after we brought 

in new leadership and then they were stolen away from me. We 

now have a leader who, I believe, is going to really move the neeH605-41331-79W7 with DISTILLER

13 

dle. And on Investigative Services, you will remember, Mr. Chairman and Mr. Johnson, from the hearing where we were removed 

from the GAO High-Risk List for processing background investigations and meeting the 40-day standard that was set under the law 

ahead of schedule and on budget. Ken was part of the team that 

helped us to meet that success. And so when I looked for who to 

put in charge of this who could lead this as a career day-to-day 

leader, I grabbed Ken from the Federal Investigative Services Division (FISD) and brought him over to help us in this effort. 

So we do have the Chief Operating Officer, my Deputy Chief of 

Staff, and Ken on a day-to-day basis, and then I am watching this, 

like I say, as my highest priority. So I just want to give you that 

organizational sense of how we are dogging this. 

Senator AKAKA. Thank you. Mr. McFarland. 

Mr. MCFARLAND. Mr. Chairman, if I might, I would like to mention just a couple of things that might add a little more clarification to the effort at hand. 

I have recently become an ardent reader of Ms. Melvin’s work regarding OPM. I have read GAO’s work over a few times, and I 

would say, without question, they have done a terrific job of identifying the problems. If their work is not used as a guidepost, that 

would be a real mistake in my estimation. 

But let me just point out something—not to make an excuse for 

OPM because that is not what my job is about, to make excuses— 

but I do want it to be a level playing field for all to understand. 

In fact, Ms. Melvin mentioned this in a previous testimony, talking 

about the processing of a claim—in order to process a claim, OPM 

must determine eligibility, calculate the annuity, and provide customer service. Now, there are many other things involved, of 

course, but on the surface, that sounds like a pretty easy fix. 

But in order to do this, the Retirement Services Division has to 

comply with over 500 different procedures, laws, and regulations. 

They use over 80 different information systems that interface with 

approximately 400 other internal and external systems. They work 

with antiquated equipment that have about three million lines of 

custom programming. Now, up until a few hours ago, I did not 

know what custom programming was, but three million lines 

means three million lines of code. This means that the retirement 

IT systems are very carefully and specifically customized to the 

government’s needs. It also means that it is very hard to fix something because you have to locate the one line of code out of those 

three million lines. 

And I know Ms. Melvin could speak more to the technical aspects, but what I would like to add to this, if I may, as OPM continues to refine its reforms to the retirement claims processing procedures, OPM must take specific steps to ensure that this processing system will last far into the future. This is very similar to 

the steps that must be taken when developing any new IT system 

or project. 

The first step is investment management—simply ensuring that 

adequate funding is available throughout the project. 

Next, requirements management—documenting and maintaining 

all business processes requirements—basically, the rules of the system. 

H605-41331-79W7 with DISTILLER

14 

Third, testing—ensuring that all of the requirements have been 

properly tested. 

Fourth, project oversight—establishing executive sponsorship 

through an executive steering committee, such as the Office of Inspector General (OIG), GAO or the Office of Management and 

Budget (OMB). 

Fifth, risk management—identifying, tracking, and mitigating 

risks to the project throughout the life cycle. 

And, finally, information security. The system’s security has to 

be planned at the beginning of the process to ensure that it is included at all stages of the development process, all the way to the 

end of the work. 

So I just mention this so that there is a better understanding of 

what OPM must do. There are an awful lot of people doing Retirement Services work, something like close to 800 people in that division, and about 290 in the actual part that do the processing. But 

that is a lot of people. This is a complicated situation. But I do 

think that it can be overcome and it will not be that long before 

this overage is canceled out. 

Senator AKAKA. Thank you both very much for your responses. 

Let me call on Senator Johnson for his questions. 

Senator JOHNSON. Thank you, Mr. Chairman. 

Director Berry, while I have you here, before I hop into the computer system, we may be bringing up the Postal bill here in the 

next couple weeks. In Section 102 of that bill, there is a provision 

that would provide service years of credit for Postal employees, 

phantom average salaries. We did request from OPM some information in terms of what that would cost, and there were actually 

ranges. It was intended to be capped at $25,000, but your agency 

provided us information in an e-mail that showed that those 

awards could be as high as $280,000 per employee. 

We also got an e-mail from your agency stating your opposition 

to granting those types of phantom average salary credits in any 

kind of a retirement buyout. I just kind of want to get you on the 

record. That is your position? It would be a very bad precedent 

being set is, I think, what your agency thought? 

Mr. BERRY. Yes, sir. And I have not been fully briefed in great 

detail on the issue, but my staff tells me that it is our policy and 

we are in agreement with you on the phantom payments. 

Senator JOHNSON. OK. Well, I appreciate that. Let us delve into 

computer systems. Mr. McFarland, you are quoting in terms of the 

number of systems involved. I used to actually program FORTRAN. 

I used the card decks. It is somewhat jaw dropping that the Federal Government is that antiquated. Is the retirement system of 

the Federal Government that vastly different than private sector 

retirement plans, that in some way, shape, or form, we cannot 

modify computer systems used in the private sector to handle the 

Federal Government, as well? I mean, is it just that different? Or 

maybe that would be for Ms. Melvin. 

Ms. MELVIN. We have not looked at the retirement system relative to what the private sector has done, but what I would say is 

that the types of concerns that we saw overall relative to managing 

the Retirement Modernization Initiative are the types of concerns 

H605-41331-79W7 with DISTILLER

15 

that are prevalent at many other agencies, but they can be overcome if the essential management capabilities are in place. 

From the standpoint of the technology itself, certainly, there are 

complications when you are dealing with very old code and you are 

dealing with many systems and the hundreds of interfaces that are 

involved with OPM’s systems. Across the 20-plus years, I do not believe that it would be impossible for them to overcome that and develop a system. 

However, as has been alluded to in my statement as well as in 

the statements of the others, the deficit in the IT management capability is very extreme at OPM, at least from what we saw 

through our work. The types of recommendations that we made are 

recommendations that collectively need to be addressed in an institutionalized way at the agency, I think it is very commendable that 

Director Berry has taken ownership of the problem and has recognized the severity of it. I think it is also important that he talk to 

the need to involve others, a Chief Technology Officer, for example. 

Those types of figures are going to play a critical role from a leadership perspective to try to help get a culture in place at OPM 

where they can start to, first of all, assess their capabilities and try 

to move forward in understanding what their needs are, developing 

a clear vision of what that is, and then working toward that 

through a defined and concrete plan of action that would take them 

there. 

Senator JOHNSON. Yes, Director Berry. Go ahead. 

Mr. BERRY. Senator, if I could, you would think with having basically two core systems, the Civil Service Retirement System 

(CSRS), which was the old Civil Service retirement, a defined benefit, pretty straightforward calculation, now about 15 percent of our 

workforce is under that. We walked away from that back in 1984 

and reformed it and created the new Federal Employment Retirement System, which sort of has a three-legged stool approach to 

it—Social Security, a Thrift Savings Plan, and a much smaller defined benefit portion. Those are the two core lanes, if you will, that 

we have to operate in. 

When the private sector—the last automation attempt came in, 

they had an off-the-shelf system that they thought, well, this was 

similar to the lanes that they were operating in. But what they encountered when they came in—the Inspector General mentioned 

500 rules and modifications in law and regulation over the years 

that have accumulated, things like a different law enforcement officer pay calculation, a different firefighter calculation, an air traffic 

controller calculation, part-time service calculations, different doctor/dentist/surgeon calculations. You could go on and on and on 

with those lists of what those 500 calculations are. 

And what they found was they could not modify the off-the-shelf 

system to accommodate all of these unique variables that exist in 

the Federal process. And so that is why in looking at the learned 

experience from that most recent—they took that behind the barn 

and shot it just before I walked in the door. So lessons learned. I 

read that file the first month on the job and said, we are not repeating this. We are not going to try to automate the whole thing. 

It is just too complicated. 

H605-41331-79W7 with DISTILLER

16 

1The chart referenced by Senator Warner appears in the appendix on page 103. 

And so that is what motivated my system to look at my approach 

of this, pieces that make sense that we can control. There will be 

private sector solutions to a lot of these pieces and we will be able 

to bring them on a lot faster with a more easy application of GAO’s 

principles than we will if we try to do it all at once. 

Senator JOHNSON. Was it ever considered, taking these off-theshelf systems and putting them down at the agency level so you 

would have fewer of those variables? 

Mr. BERRY. The problem, Senator, is that—and this is one of the 

reasons we have problems sometimes in getting a complete file to 

just make the adjudication—once we have a complete file, it is ours 

to process it and it is not days or weeks. It is getting that file complete. 

And so what each agency would then face if you devolved it to 

each agency is most Federal employees are moving around during 

the course of their career. They have military service. They have 

National Guard service. They might have worked for the Postal 

Service. They might have part-time service. And they will have it 

with multiple agencies. And there is not—all of the paperwork for 

that service lies with those original agencies, it does not build a file 

that follows the employee as they go unless if they are—Federal 

employees who are savvy do. They maintain their file. And for 

those, we are able to rebuild a file very quickly or make sure it is 

complete. 

But otherwise, we need to go back and, before we can adjudicate 

it, make sure we can verify that service. And sometimes people’s 

memories will be foggy the farther back you go and they will think 

that was full-time service when in reality it was part-time service, 

and the credit is different and we have to verify that before making 

that determination. 

Senator JOHNSON. I am beginning to understand your quandary. 

[Laughter.] 

Senator AKAKA. Thank you very much, Senator Johnson. 

Let me call on Senator Warner for questions. 

Senator WARNER. Thank you, Mr. Chairman, and I appreciate 

your responses. 

I guess I want to kind of pick up where Senator Johnson left off, 

and let me thank you for your willingness that you will report back 

to this Subcommittee and to all of us on a monthly basis what the 

wait period is. I would simply question whether at this point that 

you cannot finalize your calculations until you get the data from all 

the corresponding agencies. I have a chart1 here, I believe, that 

shows 2011, June 10, 2011, that shows that the error rate at the 

Department of State is 50 percent, EPA is in the 40s, the Judiciary 

is at 33, the Library of Congress is in the mid-30s. I think the Federal Government average is about 20 percent. Can we get that 

monthly report of the error rate from all of these various departments who are reporting in to you? 

Mr. BERRY. Senator, what I can tell you is what we are trying 

to do, right now, those error rates are just an annual snapshot, and 

what we do is we take it when it is at the slowest part of the year 

in terms of when we are getting the fewest cases in so that I can 

H605-41331-79W7 with DISTILLER

17 

take people off. Right now, I have had an ‘‘all hands on deck’’ mentality of if you can handle cases or help in the processing of cases 

or field calls so that you can free up time for adjudicators to handle 

cases, I have everybody focused on cases. 

And so what I have challenged my people to do, and the Chief 

Human Capital Officers Council, has volunteered to help us on 

this. This has not been one where—they know they are part of the 

problem and so they have promised to help us. We are going to try 

to figure—one of the Navy Six-Sigma reforms was to build a processing team that will prioritize and sort of triage your cases as 

they come in and to immediately identify right there if the file is 

not complete and identify where that is from so that we can then 

develop a monthly report on it. 

Senator WARNER. Well, one of the things—the reason why I 

asked—— 

Mr. BERRY. So we want to do that. Our goal is to do that. Well, 

that is one of the reasons why I asked. I do not have it now, so 

I do not want to promise you something that I cannot commit until 

we get this—we are putting that in place now, and as soon as I get 

it, I am happy to share it. 

Senator WARNER. Well, I guess what I would hope would be that 

with your monthly report, and if we had a report on the error rate 

from each of the departments, we might ask our friends in the 

media to publish that on a monthly basis, as well. We do have a 

lot of Federal employees here. My understanding is there was a 

similar effort made when there was a backlog in the early 1990s, 

that this helped generate some internal pressure to get folks just 

hired. 

Because one of the things that you may need to come back to us 

with is something that says, if you have continual laggards in parts 

of the government getting you these materials, well, at the end of 

the day, it is your responsibility but you have to have some ability 

to have a hammer on these agencies and departments that are not 

getting you the data in a timely manner. 

Mr. BERRY. I appreciate that, Senator, and we agree. It has to 

be—it is one of the four pillars—— 

Senator WARNER. All right. So you are going to get us monthly 

reports in terms of your lag time right now. When do you think, 

working with your CHCO group, you can get us error rates for each 

of the agencies? Do you think within 90 days? 

Mr. BERRY. If we could get you back for the record on that, because what I have asked is once the Navy Six-Sigma process, once 

we get that team up and we can see—— 

Senator WARNER. It would seem to me that within 90 days, we 

ought to be able—— 

Mr. BERRY. Yes, I would hope that, sir—— 

Senator WARNER. Now, can we move again to the next item. The 

one concern I had in reviewing your plan is that, and if Senator 

Johnson and my calculations are wrong, please correct me for the 

record, but if OPM is processing about three to four cases a day, 

others seem to be doing—we have some data that shows double 

that, if you are at a cost basis at about $1,100 to process, Virginia 

is at $137—a simpler system, I would be the first to grant, but 

there are people that move around State systems, as well—in your 

H605-41331-79W7 with DISTILLER

18 

goal beyond simply running this timeline down so the backlog is 

taken care of, I would hope you would have goals, as well, to look 

at what standards for processing would be in equivalent organizations, State Governments, elsewhere, other parts of the Federal 

Government, and how you can drive that per claim processing cost 

down. 

Mr. BERRY. If I could, Senator, the correct comparison, in other 

words, an apples-to-apples comparison, Virginia-to-us, our per 

claims cost is $108. So we are in the ballpark where Virginia is 

right now. 

Now, the whole budget, in other words, does not go toward 

claims processing. There are pieces of it, the court ordered benefits 

section, the training components, we do not score that toward that 

cost. And so when we have asked for legislative help from you 

when agencies are having a significant buyout, like the Postal 

Service, and you have been very helpful to us in that regard, that 

they would reimburse to us the cost of this so that we could make 

sure we could keep the staffing up, that is the rate we would be 

charging them, is the $108 rate, which would be comparable. So I 

think we are in the ballpark there, but we will keep a close eye 

on it. 

Senator WARNER. I do not want to exceed my time. I will not be 

invited back. Just two quick other points I want to raise, and not 

being a member of the Subcommittee, this may have already been 

provided to the Subcommittee, but we all know we have this bulge 

of Federal workers who are in the realm of retirement age—— 

Mr. BERRY. Yes. 

Senator WARNER [continuing]. Over the next 5 to 8 years. We 

talked about this when you first came in. Do you have projections— 

I appreciate the focus, although, again, I would not—18 months 

down to 60 days, an 18-month period to get to 60 days. I would love 

to see improvement there. But do you have projections going forward over the next 5 years what your staffing needs will be, and 

while I understand that the Retire EZ system, $200 million, pretty 

much flushed down the toilet, prior to your time, but did not work 

out. 

I would hope that you would be able, not just this backlog, but 

this is going to be an ongoing problem as we get through the bulge 

in the snake of all these Federal employees retiring—that you 

would have lined out some kind of 3-to 5-year plan on how you 

would move an IT system in. 

And my last point here on this would be perhaps the analogy to 

private sector IT systems may not be accurate, but I have to believe there may be certain State IT systems or even other country 

IT systems that have some of the complexities the Federal Government would have. 

Mr. BERRY. Senator, you are right on, and we will be—the Chief 

Technology Officer and our Chief Information Officer, they will be 

the ones that I have tasked to provide the addendum to this—this 

strategic plan is going to be a living document, and I think it is 

important that it does so that we can do this. 

To answer your first question, the strategic plan does estimate 

what we would project for at least the next 2 years in terms of retirements, and so far [knocks on wood] we are on target. The 

H605-41331-79W7 with DISTILLER

19 

20,000 increase—I heard the gasps in the room—was in the plan. 

So we projected that in the plan. What I hope is that is the peak 

and from here down we will be able to, with all of the efforts that 

we have been able to draw, that 20 percent increase in productivity, I have hired the people but they have just started training. 

So none of those extra bodies have actually been thrown at this yet 

to produce. 

So the productivity improvements have just been through the 

Six-Sigma and some of our own creativity from our unions and 

working in partnership with them and our people on the front line 

of, hey, this is a smarter way of doing it. And when somebody has 

a good idea, as long as it increases the standard I have used, if it 

makes it faster and maintains accuracy, go for it. 

Senator WARNER. I am not trying to take extra time, but you 

have a goal of getting productivity above three to four claims a 

day? 

Mr. BERRY. Absolutely, sir. 

Senator WARNER. What is your goal? 

Mr. BERRY. Well, I do not want to—we were the first ones to put 

in place a performance standard, and that performance standard 

was just put in place last April, which is that one that you talk 

about of three a day. The three a day, though it sounds like it is 

not significant, you have to understand, probably 30 percent of 

their time is now handling customer service calls and another 30 

percent in getting cases drawn together. 

I want to use our legal administrative specialists for case adjudication. And so we are growing the customer specialists to handle 

customer service and I am creating teams of other people to make 

sure the files are complete so that now—that standard was developed when only essentially 30, 40 percent of their time was being 

used on actual case adjudication. As we are able to peel those off 

and get those other elements stood up, we are going to revisit those 

standards. They are within management’s rights. 

And so as we feel it is fair to adjust and to move those standards 

up, we will. But I want to make sure we—right now, we have a 

wonderful partnership. Our employees get this. Our union members are as embarrassed by this backlog and take it to heart personally. They know we want to honor the service of Federal employees and retirees. They are sick that people with disability have 

to wait as long as they do. So they are driving at this as hard as 

we are. This is not a case where I have intransigent employees. 

They are working on this. 

But just so you know we are taking this seriously, I have over 

a dozen people on Performance Improvement Plans right now, and 

if they do not shape up, we will be removing them. In other words, 

we are going to dog this with those standards and we are going to 

be lifting those standards and we are going to be enforcing those 

standards. So that we can reach these targets. 

But this plan lays out a pretty aggressive plan. I am going to try 

to push it even faster, as you have said, because I would love to 

get it done faster than 18 months. But I also do not want to mislead the Subcommittee. Within a frozen budget level, and I have 

probably moved about as much money and tightened as I can in 

H605-41331-79W7 with DISTILLER

20 

other places that I can do right now, so I do not have a lot more 

to throw right now. So we have to do it smart, as well. 

Senator WARNER. Thank you, Mr. Chairman. I appreciate your 

courtesy. 

Senator AKAKA. Thank you, Senator Warner. 

Director Berry, OPM has set an ambitious 18-month goal to reduce processing time to an average of 60 days. The current average 

stands at 156 days. Given the challenges we have heard about 

today, please explain why you feel this goal is attainable. 

Mr. BERRY. Well, I think within constrained budgets, and keeping in mind for Fiscal Year 2012, the current budget right now, 

just to give you a sense of our constraint, the President’s budget 

request was for $232 million for our agency and we received, and 

I understand the deficit we are wrestling with and we have to 

share our pain with everyone else, but we were held at $211 million, which is a hard freeze from the year before. 

So you can see moving these resources, I have had a 20 percent 

increase in the past 2 years of what I have been able to pull from 

other parts of my agency to put on retirement to try to address this 

situation. So I take it very seriously, Mr. Chairman, and will continue. Like I said, it is my highest priority. 

But I also do not want to mislead the Subcommittee. I do not 

have a magic wand. This is hard work. This is paper and pencil 

processing. The first IT task we have to do is just replace those antiquated systems. If those systems fail right now with the code that 

the IG mentioned it will blow a hole in my strategic plan. I have 

to be honest. And so we have to get those upgraded. We have to 

get them brought into the modern era and the private sector is 

going to help us on that. 

So that is going to be—all of these elements of this plan, I believe, will address this, the four pillars, which are getting more 

people, getting them trained as fast as we can, and getting them 

on the front line. 

The basic training, just to give you a sense of the complexity of 

this, for someone to begin to process with a mentor looking over 

their shoulders takes 3 months to get them to that point. It is 6 

months before they are doing it without the mentor there and a 

year before they can really handle the full panoply of cases. One 

of the things we have looked at is could we just go out and hire 

a temporary contractor, short-term help that could come in and 

help us. But many of the contractors we have worked on who are 

familiar with our situation and the complexity of it know that it 

is going to take them about the same time to get the people trained 

and up and running. So they cannot make that investment for an 

18-month period or a short-term period. 

So people, technology, working with the agencies, and getting IT 

fixes in place. Those four pillars, I think, Mr. Chairman, are every 

angle of attack that we need to make on this issue and we are 

going to go at all four of them equal energy and see if we can move 

the needle. I think we can. 

Senator AKAKA. Thank you. 

Ms. Melvin, you testified that OPM’s strategic plan does not address its dependence on legacy systems. What methods can OPM 

H605-41331-79W7 with DISTILLER

21 

use to evaluate its legacy systems and determine how they should 

fit into its reform strategy? 

Ms. MELVIN. The approach that we would advocate would be for 

OPM to step back and take a look overall at what its current operating State is in terms of information technology that supports its 

retirement processing. So it involves getting an up-front understanding of what all of its systems are and then from that point 

moving forward to really make a decision on how it can process 

going from there. 

In terms of a plan that we look for, we think that there is a lot 

more that OPM can do to establish a concrete plan, an approach, 

if you will, for addressing its information technology. Looking at 

the IT systems that are there, understanding all of the interfaces, 

for example, all of the different aspects that go into that is critical 

to that plan. 

We would like to see a plan, however, that is built on them having an understanding of what their current state is and that is 

driven by that vision that he speaks of in terms of moving forward 

to having a modernized automated process. But in doing that, what 

we would look for is for them to have a very solid description of 

program scope that would look at all of those systems, that would 

take into consideration all of the processes that would have to be 

considered as they design a system, the actual implementation 

strategy that would, again, be built upon what they are trying to 

move toward, the ‘‘to be,’’ if you will. A lot of it is built around understanding their architecture, the IT architecture that they have 

to have in place to support this modernization effort. 

And then from there, it moves into understanding the lines of responsibility and authority and make sure that they have the critical management officials in place to oversee this effort and to 

move forward. 

A big concern that we had was the lack of oversight that has pervaded the efforts that they had undertaken. I think having the critical oversight of all of these processes as they move forward is 

going to be key to them being able to figure out how to move from 

those legacy systems into a process that is more modernized. 

Senator AKAKA. Thank you. 

Director Berry, under my Non-Foreign Area Act, employees in 

Hawaii, Alaska, and the Territories who retire between 2010 and 

2012 may treat part of their Cost of Living Adjustment (COLA) as 

locality pay—— 

Mr. BERRY. Yes, sir. 

Senator AKAKA [continuing]. For retirement calculations. Some 

people expect a surge of retirements from these areas in late 2012. 

What steps is OPM taking to make sure it is ready for this and 

other retirement surges so these employees will not face additional 

delays? 

Mr. BERRY. Mr. Chairman, thank you, and we are well aware of 

that COLA calculation and recalculation under the reforms and the 

law that you and the Congress have put into place and we have 

been working very hard with outreach to all of the agencies who 

have the responsibility, for example, to manage the actual buy-back 

of the deposits that need to be made for some of the annuitants. 

H605-41331-79W7 with DISTILLER

22 

We have done an extensive outreach effort to assist agencies and 

will continue to provide training. 

We have done benefit administration letters to all of the H.R. 

agencies, to each of the Federal agencies, to help them and assist 

them in determining these calculations. We have done onsite training in the locations where the majority of these annuitants are located. As we recently completed a training in Hawaii, which I, 

sadly, could not attend. The training that we have also done for 

agency benefit officers at the 2010 Benefits Conference and the Fall 

Festival of Training, which happened in 2011, is another opportunity for us. But we are going to stay on this. And finally, we have 

done a payroll presentation to the Shared Service Center Advisory 

Council meeting, which has to manage those calculations for 

those—the buy-backs under the law that you recently put in place. 

So I think, sir, we have it well in hand. I also know that one of 

the leaders who understands the complexity of this issue, you were 

very kind to allow me to bring onto our staff, Thomas Richards, he 

helps dog this issue internally at OPM to make sure that we meet 

all the deadlines under the law that you have created here. 

Senator AKAKA. Thank you very much. 

Senator Johnson, do you have questions? 

Senator JOHNSON. Thank you, Mr. Chairman. 

Director Berry, are there any simple cases? 

Mr. BERRY. Yes. Thank goodness, there are. 

Senator JOHNSON. You mentioned a word I was going to bring 

up, triage. 

Mr. BERRY. Yes. 

Senator JOHNSON. In that triage process—again, I am glad you 

are looking at some Six-Sigma processes, as well, process improvement—is part of that effort not only just splitting out the complex 

cases but really taking a look at the simple ones and move those 

faster? In other words, do some of your cases move through very 

quickly or are they all stacked up and first in, first out process? 

Mr. BERRY. No. We do have a triage for a disability case, for 

someone who has a terminal illness or is fighting a serious disability illness and has pretty clear issues. We work very closely 

with Social Security and the Department of Labor to expedite those 

cases and try to bring those to the forefront. So, absolutely, we do 

take triage seriously. 

But we also, through the Six-Sigma process, are identifying those 

cases where somebody has worked at one agency. They are in one 

system. We have a complete file. We can get it done in 3 hours. 

So we are tiering those down and assigning those simpler cases to 

those more junior employees and our more senior employees who 

are more familiar with the complexity of those individual complexities of those 500 rules that they need to understand and apply, we 

can use those more senior adjudicators, the Legal Administrative 

Specialists (LASs), to handle those. 

So the Six-Sigma process has really been helpful in terms of 

helping us define that and to create that front-end process which 

we were not doing before. So it has been a great reform and one 

which, I think when we look at that 20 percent increase in productivity, I cannot give you an exact of what percentage of that is due 

H605-41331-79W7 with DISTILLER

23 

to that, but that is one example of something we have been able 

to just get running with. 

Senator JOHNSON. The two areas of complexity you talked about, 

certainly the people moving around to different agencies, which I 

can see could be pretty difficult, having different jobs under different contracts with different calculations, I mean, again, that is 

just growing geometrically in terms of complexity. Do the retirees 

themselves—can they take on some of the responsibility for getting 

information? Are you trying to create some systems there in terms 

of data entries so that they can actually feel empowered to help 

themselves speed the process along? 

Mr. BERRY. Absolutely, Senator Johnson. The people who know 

their service best are our retirees and we encourage and are working with the Chief Human Capital Officers Council and our agencies as well as all of the employee associations and our union partners and management associations. As people are thinking about 

retiring right now, we encourage them, 6 months out—most people 

know that they are approaching retirement. They are thinking 

about it. Even if you are just thinking about it, make sure your paperwork is up to date. Go to your H.R. office and look at your file 

and see what is missing and see if they have that. And if not, you 

can help that H.R. officer by saying, what? You might not know 

this, but when I was in college, I worked part-time at the Postal 

Service and I should get credit for that. Well, they are not going 

to know that. That annuitant is going to know that and they can 

help, then, to go to the Postal Service to identify the paperwork so 

that we can have a complete file. 

So we are asking our annuitants to help us in this regard, and 

anything they can do to make sure—like I say, if we have a complete file, the processing time, we will be able to blow by that 60- 

day standard. I would love to get to a 30-day standard. But I also 

know we have to have realism as we try to tackle this backlog. And 

so to the extent we can get help from our annuitants, I would be 

very grateful for it. 

Senator JOHNSON. Well, is that a standard part of the exit process or the termination process? 

Mr. BERRY. In some agencies—it is not standard across the government, no. Some agencies do a better job. Some annuitants or 

employees do a better job as they are approaching retirement. And 

some folks wait until the very end. And so we have to be ready to 

handle all of that. But working with the CHCO Council, I think we 

are going to be able to really significantly—those audit, the annual 

audit picture you had—and I want to, in fairness to some of the 

agencies that were mentioned, because that audit is not a scientific 

sample. We are drawing cases as best we can. 

For example, OPM under that audit, to be full disclosure, we 

have a 50 percent error rate under that, but it was premised on 

two cases, one of which was incomplete, therefore the 50 percent 

error rate. So you can see how that audit has not been done accurately, and so one of the things we are working with the Navy SixSigma process on is refining that so we can get a really good 

monthly snapshot and know who is really holding up the line here 

by bringing in incomplete files. 

H605-41331-79W7 with DISTILLER

24 

And the CHCO Council has agreed to hold each other’s feet to 

the fire and monthly share the data amongst each other so there 

will be peer pressure. But I will also, as soon as we get that, be 

able to make that available to the Subcommittee, as well. 

Senator JOHNSON. As part of this process, and really, as just part 

of the Office of Personnel Management, is there any effort underway at all to take a look at all these labor contracts, take a look 

at all of these different calculations and try and begin the standardization process? 

Mr. BERRY. None of those calculations are as the result of—at 

least none that I am aware of are the result of any bargaining. 

They are all set in law. So they have all been adjustments or results that the Congress has enacted. And so Federal employees do 

not bargain over pay, so that—nor over their retirement benefits. 

So none of this variability that we are talking about—— 

Senator JOHNSON. So the question would be, would that be a recommendation you could make to Congress, then, to standardize 

these things? 

Mr. BERRY. It is something we would love to work with the Subcommittee on as a longer-term project, of how we might be able to 

standardize and reform some of that complexity in the system. 

Some of it goes back over 100 years and we are still responsible—— 

Senator JOHNSON. OK. You have a receptive audience right here. 

Mr. BERRY. Yes. 

Senator JOHNSON. Let us talk about some good news. I heard that of the $600 million payment to dead people, $500 million has 

been recovered. Can you just tell us how that happened and maybe 

it can serve as an example for other areas. 

Mr. BERRY. Well, it is through a lot of hard work and it is 

through the good work of our Inspector General’s Office. They identified some great reforms that we could do by using Social Security 

lists and cross-checking and doing mailings using 1099, so our people just implementing those reforms. And then we have been able 

to recover much of those resources. 

But we can still do better, and that is why I think having a strategic plan of looking over the horizon, how can we be smarter and 

how are we going to do that together with our Inspector General’s 

team. They have an outstanding group of people and I want to give 

a hats off to Patrick for raising this issue and dogging it, and my 

commitment is we will stay on it to do it. 

Senator JOHNSON. I am just amazed you recovered $500 million. 

Now, were those checks just sitting there and you had to basically 

void them out, or did you actually have to go to people and say, 

you owe us X? 

Mr. BERRY. Some of it is people are not aware. They have been 

receiving a check, and you are the son or you are the surviving 

spouse and you thought that they had elected for the annuitant 

survivor plan when, in fact, they did not. And so, therefore, as the 

spouse, you are not entitled to that check. And so they are not 

aware that—for example, they presumed that it happened. And it 

often is not until you approach and you say, I am sorry, but you 

can no longer receive this payment. Oftentimes, they are not even 

aware that they were improperly receiving it. 

H605-41331-79W7 with DISTILLER

25 

But many of it, some of it—there is some percentage of it that 

is fraud and we have to go after those people very hard because 

that is illegal. But it is a very complicated issue. It is multifaceted. 

And I think what Patrick has designed and what we want to work 

on in the strategic plan is we have to attack this from all the angles, not just one, and that is why I think—why developing a good 

strategic plan on this will do a good job, but I should defer to Patrick. 

Mr. MCFARLAND. I thought this might be of interest. It is nice 

sometimes in a situation like this to put a face on the issue. Most 

of the retirement fraud is fraud of opportunity. It is convenient for 

the family member or a friend or someone who is associated with 

the person that died to keep the checks coming so that they do not 

put themselves in an awkward position of having to tell the truth. 

They just keep accepting the checks. 

Here is a very interesting story that I think is worth reading. We 

do encounter cases of elder abuse. For example, we found a retired 

Federal employee and military veteran who was evicted from a series of nursing homes for non-payment while his son was stealing 

$47,000 in retirement and VA benefits from their joint bank account. This gentleman was transferred to four different nursing 

homes in under 2 years with his son simply dropping him off at 

the next nursing home to avoid making payments. The defendant 

wrote only two checks for the nursing home care. He stopped payment on one and wrote the other on a closed checking account. 

The defendant pled guilty to theft and was sentenced to 19 years, unfortunately, of just probation and restitution of $47,000. OPM received back $36,000 and the remainder was returned to VA. So 

there is just a panoply of these cases out there that we work with. 

Senator JOHNSON. Thank you very much. 

Senator WARNER. Mr. Chairman, could I get two quick questions 

and then I will not take any more time? 

One was on the question Senator Johnson raised, the issue of 

providing future retirees with kind of a checklist. I just wonder if 

that could be at least standardized, gotten out. If you have a 156- 

day average wait list and yet you can say, if you get all your data 

in a timely manner, the wait list is some smaller percentage of that 

and if members could write out, as well, I mean—— 

Mr. BERRY. It is a great idea, Senator. I know the Chairman 

takes financial literacy training very seriously, and so we can make 

sure. I think our Web site has it now, sort of a checklist for people, 

if you are thinking of retiring, what to gather. But we need to— 

if we do not have it as standardized and as simple—— 

Senator WARNER. And proactively sending it out—— 

Mr. BERRY. Absolutely. 

Senator WARNER [continuing]. And also indicating how long the 

potential wait is. 

Mr. BERRY. Yes. 

Senator WARNER. The only other question I would ask, and 

again, I really thank the Chair and the Ranking Member for having the courtesy to have me come by, I did hear as I was trying 

to get briefed up on the challenge of how long it is to train new 

personnel on this issue. I know on the second panel we are going 

to have some representatives from NARFE. Do you have any capaH605-41331-79W7 with DISTILLER

26 

bility of bringing back recently retired OPM personnel that have 

this expertise already on some kind of SWAT team? 

Mr. BERRY. Yes, sir. In fact, I think, is it No. 8? We have recently 

brought back as reemployed annuitants people who had retired 

from our retirement processing who we knew were outstanding producers. They knew how to do cases. They did them accurately. 

Their accuracy rate was very well. So we went and asked them, 

would you come back and help us? And so eight took us up on that 

and they are now at work. And so part of that 20 percent productivity increase is they have been on the front lines here in the past 

month, and we are going to keep them there as long as we legally 

can to keep producing. They are part of that people solution. 

And so it is a great idea, Senator. What we have said is we will 

keep looking for people who are accurate and they had a good 

record with us. If they would like to come back, we would love to 

welcome them back to help. 

Senator WARNER. Thank you, Mr. Chairman. 

Senator AKAKA. Thank you very much, Senator Warner. I thank 

you so much for your responses. Without question, it shows that we 

will be improving the programs further for the future and that 

there are plans in place. Of course, we wish you well in reworking 

those retirement systems and to do it as quickly as you can. So I 

want to say thank you so much to all of you for your responses. 

But before I dismiss you, let me ask you a question Mr. McFarland. You noted the absence of annual recovery targets in OPM’s 

reclamation strategy, but also acknowledged the difficulty in setting a target given the complexity of the recovery process. My question to you is, what specific steps would you recommend OPM to 

take in order to set a feasible annual target? 

Mr. MCFARLAND. Well, I think what I would suggest would be 

pretty much in line with what I said earlier, and it comes right 

back to leadership from the top. Now, I am not just speaking of 

John, of course. I am speaking of somebody who is really going to 

take charge of something and determine through that process—a 

project manager, so to speak—and determine through that process 

what would be a viable target. 

I cannot say at this point because I do not know, but I think that 

if we have someone at the top who is dogging this thing to the 

point where everybody has to answer up in an extremely accountable way, then that will create the tone that is needed in order to 

make these things work. The strategic plan is, like I said before, 

a big step forward, but unless we have the people, and the funding 

to get the people for that project, it is not going to go anywhere. 

I truly believe that it just takes a lot of support from the top and 

it cannot waiver. It has to be there indefinitely. 

Senator AKAKA. Thank you very much. 

I am going to ask each of you, in case you have any additional 

statements to make, that you make them now before we dismiss 

the first panel. Director Berry. 

Mr. BERRY. Mr. Chairman, you have been very generous with 

your time today. You have my promise that we will stay on this 

and we will dog this plan to make sure that it continues to follow 

the trajectory which we hope is going to be even faster. So thank 

you, sir, for the opportunity to be with you today. 

H605-41331-79W7 with DISTILLER

27 

Senator AKAKA. Thank you. Anyone else? 

Mr. MCFARLAND. Mr. Chairman, I would like to just mention 

something regarding what was talked about earlier. From the 

standpoint of the person preparing to retire they need to get their 

paperwork moving so that it will help the system as far as responsiveness. But my point is that I would like to see—and this might 

possibly be a recommendation from our office down the road—I 

would like to see that, let us say today all of the backlog was 

cleared up. I would like to see a situation where not just the retiree 

shows initiative, but also have the office at each agency show initiative and look in their files, determine who probably will be retiring, and who may have indicated retirement. They should show 

some initiative and get started on the paperwork, and not just rely 

totally on the retiree. 

Senator AKAKA. Thank you. 

Mr. MCFARLAND. Thank you. 

Senator AKAKA. Ms. Melvin. 

Ms. MELVIN. Yes. Chairman Akaka, I would encourage continued 

oversight such as the hearing that is being held today and other 

mechanisms through requiring OPM to report, similar to some of 

the things that they have suggested. I would also hold OPM to developing timelines and measures of progress. I think that is critical 

to anything that they have to do going forward, whether it is the 

information technology component or the personnel component. 

Having clearly defined timelines and measures for accomplishing 

the goals and the activities that they have set about to do is going 

to be critical to ensuring that there is accountability for them to 

get there. 

Senator AKAKA. Well, I want to thank the panel for your testimonies and your responses. At this time, there are no further questions for this panel. 

I would like to now welcome our second panel of witnesses. 

[Pause.] 

Welcome to our second panel. Good to see you again here. Mr. 

Joseph Beaudoin is President of the National Active and Retired 

Federal Employees Association, and Mr. George Nesterczuk is 

President of Nesterczuk and Associates. 

It is the custom of the Subcommittee to swear in all witnesses, 

so will you please stand and raise your right hand. Do you swear 

that the testimony you are about to give this Subcommittee is the 

truth, the whole truth, and nothing but the truth, so help you, 

God? 

Mr. BEAUDOIN. I do. 

Mr. NESTERCZUK. I do. 

Senator AKAKA. Thank you. Let the record note that affirmative 

answers were given. 

I want to thank you so much for being here and would like to 

call on Mr. Beaudoin for your statement. Please proceed. 

H605-41331-79W7 with DISTILLER

28 

1The prepared statement of Mr. Beaudoin appears in the appendix on page 69. 

TESTIMONY OF JOSEPH A. BEAUDOIN,1 PRESIDENT, NATIONAL ACTIVE AND RETIRED FEDERAL EMPLOYEES ASSOCIATION 

Mr. BEAUDOIN. Mahalo, Chairman Akaka and Members of the 

Subcommittee. Thank you for inviting me to testify on behalf of the 

4.6 million Federal workers and annuitants represented by the National Active and Retired Federal Employees Association where I 

have the privilege of serving as President. I appreciate the opportunity to discuss Federal retirement annuity processing. 

We have received hundreds of calls from our members, most of 

them from outside the Washington metropolitan area, complaining 

that interim payments are too low, that they are waiting too long 

to receive their full annuity payments, and that they are unable to 

get through to OPM to check the status of their annuity. Our members have sent us e-mails attesting to their long delays. 

For example, in the past 2 weeks, Jennifer Ortiz told us, ‘‘I retired on December 31, 2010, and received my first full annuity payment on September 1, 2011. Up until then, I was receiving interim 

payments of $17 per month.’’ 

John Tolleris told us, ‘‘I retired from the U.S. Treasury Department (DOT) on May 31, 2011, after 321⁄2 years of service. While 

OPM started paying my interim pension promptly on July 1, it still 

has not yet adjudicated my pension case and I am currently receiving about 65 percent of the monthly payment my agency had estimated. I am now expecting to receive my eighth ’diet’ annuity payment next month with no indication of when I will ever receive my 

full monthly payment or ever-growing back payment.’’ 

Craig Boehne told us, ‘‘I retired from the FAA on May 31, 2011. 

I continue to receive partial interim checks at about 55 to 60 percent gross of what I am entitled.’’ 

OPM confirms the problem that our members are experiencing, 

recognizing that Federal employees face unacceptable delays in receiving retirement benefits after years of honorable service to the 

Nation. As of December 31, 2011, there was a backlog of 48,375 

claims, and the average time to process a claim was 156 days, or 

a little over 5 months. 

We commend OPM for so honestly recognizing the problem and 

for developing a strategic plan to solve it. This hearing provides an 

important opportunity to assess whether that plan is sufficient to 

achieve its goals, and if not, to determine what else OPM, agencies, 

or Congress can do to ensure that it is. 

This task is urgent. The effect of such long delays on new Federal retirees is obviously serious. They must make do while waiting 

to receive the full amount they have earned. The wait is too long 

and the uncertainty is too much, particularly in the current economy. 

In addition to causing individuals personal pain and inconvenience, the delays also have an impact on local communities. More 

than 85 percent of Federal retirees live outside of the Washington, 

DC. area. They live in every American community. 

We are hopeful that OPM’s plan reduces delays. Of course, even 

the best laid plans can go awry. Thus, implementation will be esH605-41331-79W7 with DISTILLER

29 

1The prepared statement of Mr. Nesterczuk appears in the appendix on page 73. 

sential to its success. Qualified new employees must be hired and 

trained quickly. Higher production standards must be enforced. 

And temporary mandatory overtime must be implemented. Also, 

there must be an enforceable way to ensure that agencies provide 

timely information to OPM. 

Our members frequently complain not only that they have not 

yet received their full annuity payments, but they cannot easily 

check the status of their claims. It is unclear whether OPM’s new 

plan will provide better customer service to retirees that simply 

want to check the status of their claim. What is the volume of calls 

into OPM? Are there enough people answering the phones to handle that volume? It may be that there are simply too many calls 

for too few people. If that is the case, OPM should look for other 

ways to provide retirees with status updates. For example, OPM 

may want to consider providing retirees the ability to check their 

status online. 

Federal employees who have worked for years in public service 

deserve to receive their retirement income they have earned in a 

timely manner. OPM recognizes that delays in receiving retirement 

payments are unacceptable. OPM has a new plan to solve the problem and we hope it works, but we must see results and we must 

see them soon. The task is too urgent and the problem is too big 

not to. 

Thank you for the opportunity to testify and I would be happy 

to answer any questions you may have. 

Senator AKAKA. Thank you very much, Mr. Beaudoin. 

Mr. Nesterczuk, please proceed with your testimony. 

TESTIMONY OF GEORGE NESTERCZUK,1 PRESIDENT, 

NESTERCZUK AND ASSOCIATES 

Mr. NESTERCZUK. Thank you, Senator Akaka, and good afternoon. I appreciate the opportunity to testify on the processing of 

Federal retirement applications by OPM, an issue that unfortunately is getting to be of increasing concern to more and more Federal employees. 

I prepared a longer statement for the record. I will speak from 

an abbreviated version. 

Retirement benefits are an integral part of the Federal employee 

compensation package. The prevalent systems are the Civil Service 

Retirement System and the Federal Employee Retirement System 

(FERS). They are funded from the Civil Service Retirement and 

Disability Fund (CSRDF). It is a trust fund administered by OPM. 

In 1983, when the unfunded liabilities in the CSRDF had soared 

to over $500 billion, Congress closed the CSRS to new entrants 

with the hope that starting a new system would simplify the process. FERS was established in 1986 and opened to new employees 

in 1987. FERS employees are enrolled in the Social Security system, a benefit generally not available to CSRS employees. 

These steps significantly slowed the growth of the unfunded liability of the trust funds but did nothing to actually reduce it. 

Today, the unfunded liability has grown to over $800 billion, by 

some accounting methods, much larger if you use dynamic scoring. 

H605-41331-79W7 with DISTILLER

30 

FERS is fully funded. However, even though FERS is fully funded, 

the CSRDF has had to survive on borrowed money to meet its 

cash-flow requirements since the 1960s. 

Employee payroll deductions together with agency contributions 

provide about $30 billion of cash receipts annually, but this sum 

is dwarfed by payments to annuitants and survivors totaling nearly 

$70 billion per year. This perpetual reliance on the general fund 

rather than the trust fund has kept the spotlight of controversy on 

the Federal Retirement System. 

OPM services nearly 2.5 million annuitants and survivors, with 

operating costs of over $90 million per year drawn primarily on the 

trust fund. OPM, as the bridge to continued compensation, has an 

obligation to provide full and timely annuity payments. OPM maintains annuitant records and administers the exercise of various 

benefit options. The agency is also responsible for maintaining the 

integrity of payments by preventing fraud and abuse of the system. 

It is impossible to achieve these goals without up-to-date information technology and properly functioning information management systems. Past leadership at OPM has recognized this, and 

over the years, undertaken succeeding Retirement System Modernization (RSM), efforts, with varying degrees of success and failure. 

Mr. Chairman, you asked me to address efforts to reform retirement processing, management of the resources, and any recommendations to improve claims processing. I will take these in 

turn. 

For the sake of brevity, I will skip the early reform efforts and 

begin with RSM in 1997 that had intended to reduce the amount 

of paper in the process. Around this time, commercial vendors had 

developed a number of systems that could potentially be modified 

for use in the Federal sector and RSM envisioned relying on such 

commercially available products. 

With Internet usage exploding, the notion of online management 

of employee benefits programs took RSM in a yet new direction. 

About 10 years ago, OPM expanded RSM, began to consider 

outsourcing the modernization effort. In 2006, the agency awarded 

contracts to automate retirement processing, convert paper records 

to digital files, and give employees the ability to file for retirement 

online, a concept dubbed Retire EZ. It certainly was not. 

By 2008, OPM found it necessary to cancel the effort, and the 10- 

year, $290 million RSM contract was terminated. By that time, 

OPM had spent over $30 million in various failed modernization efforts during the previous decade. No doubt, some benefits have accrued to OPM from these expenditures, but considering the growing backlog of claims, it is hard to tell what those might be. 

What is disappointing is the current administration’s apparent 

abandonment of full-scale modernization. Despite shortcomings and 

failures in past efforts, OPM did recognize the need to modernize 

a process too heavily dependent on paperwork. Today, you and I 

can file complicated tax returns online, purchase most any kind of 

product or commodity online, and execute complex financial transactions in our investment portfolios. Is filing a retirement application really more complicated than filing a tax return that meets the 

H605-41331-79W7 with DISTILLER

31 

requirements of thousands of pages of tax rules and regulations? 

I do not think so. 

It was not until January of this year that OPM Director Berry 

produced a strategic plan for Retirement Services. With a retirement claims backlog at over 48,000 claims—much higher I heard 

earlier—the Director proposes to throw money and bodies at the 

problem. The agency is proposing to hire 76 new people to toss at 

its mountain of claims. These new hires will require extensive 

training. It will be months, according to Director Berry himself, before they can fully shoulder their burden. 

In addition, OPM proposes to expand the use of overtime. Upgrading IT capabilities are thrown into the mix almost as an afterthought. Director Berry missed a clear opportunity to reassure the 

Federal community that a wholesale restructuring would be forthcoming. 

The current lack of leadership on Retirement System Modernization has left agencies to fend for themselves. Given past failures at 

OPM, this is not necessarily a bad outcome, but it certainly leaves 

one to wonder how $95 million of operating expenses per year for 

retirement operations are prioritized and allocated, which brings 

me to the second issue you asked me to discuss: resource management. 

In light of the retirement claims backlog, serious questions arise 

about management of resources and agency priorities. In the strategic plan for Retirement Services, the Director concludes that, 

quote, ‘‘The retirement claims backlog developed over a number of 

years and for a number of reasons.’’ If that is the case, then the 

problem should have been attended to as a priority back in 2009 

and not allowed to fester until now. 

As an aside, I would point out that in the 1990s, in the Clinton 

Administration, with the significant downsizings, over 4 years, 

400,000 Federal employees were reduced from the payroll. Overwhelmingly, those were retirements. Retirements were running at 

80,000 per year in those times, twice the normal routine. And yet 

we did not have the buildup of these kinds of backlogs under those 

stresses. 

And if the backlog—getting back to my script—if the backlog is 

of more recent vintage, then the problem reflects directly on leadership. In either instance, OPM resources were not properly allocated 

to manage a core agency function, and it has been since my involvement at OPM for over 30 years. After all, OPM has been forecasting a retirement tsunami since 2006, so no surprises. 

In 2009, Director Berry needed to double-down on technology 

when RSM needed his attention. He instead allowed the looming 

problem of retirement claims to deteriorate and now proposes to 

grow OPM’s payroll and spend more on overtime. The Director 

chose to double-down on labor rather than technology. Whose interests are better served with that management decision? 

Now, some suggestions for improvement, some of which I have 

already heard or are being taken up, which is a good thing. 

In the long term, I do believe that full automation of retirement 

processing should remain the highest priority for OPM. The original intent of RSM, to rely on commercially available technologies, 

is a sound strategy and it should receive renewed consideration. 

H605-41331-79W7 with DISTILLER

32 

In the short term, I concur with OPM’s partnering with agencies 

and I would enhance the role of the agencies in pre-processing retirement claims. I would upgrade the skills of employee benefit officers in the agencies—they work very closely with OPM today—particularly in the larger agencies that produce the bulk of retirees. 

It seems like a no-brainer to me. 

Further, I would have OPM fund the acquisition of competing 

commercial technologies at these agencies to serve as a comparison 

test bed to evaluate which are more accurate and more effective. 

OPM should accept retirement claim calculations for predefined 

classes of annuitants from such agencies, accept them as final calculations. 

For example, employees retiring with unreduced benefits from an 

agency with which they spent their entire careers would generally 

have very simplified applications. OPM could perform statistical 

samples, detailed reviews of randomly selected agency produced 

claims, as a means of maintaining the integrity of the process and 

provide whatever corrective measures the agencies might need on 

a subsequent basis. 

Difficult claims would be identified much sooner in the retirement process and employees themselves would have opportunities 

to resolve some of those problems while still employed and while 

still having access to their agency claim processor rather than a 

telephone answering device. 

Further, I would put more emphasis on technology development 

for FERS because that constituency will be retiring in greater numbers in the next few years, while CSRS employees will decline significantly in number over the next 5 to 10 years. While the CSRS 

cases may possibly have more complex employment histories, they 

do tend to have much easier benefit calculations. 

Finally, I would urge Congress to maintain close oversight over 

OPM’s claim processing until such time as the backlog has been reduced to an acceptable number of claims. It is only congressional 

scrutiny that has forced OPM to take action in the current instance. Congress should consider requiring OPM to file monthly 

progress reports on backlog reduction, applicable performance 

standards, productivity metrics, use of overtime dollars, and the 

like. High-level attention and keeping the agency focused on its priority is what it will take to fix this problem. 

Thank you for your attention. I would be happy to respond to any 

questions you may have. 

Senator AKAKA. Thank you very much, Mr. Nesterczuk. Your full 

statement will be included in the record. 

Mr. NESTERCZUK. Thank you. 

Senator AKAKA. Mr. Beaudoin, when your members leave Federal 

service, do they feel that they receive sufficient information about 

what to expect during the retirement process? 

Mr. BEAUDOIN. The answer to that is no, sir. We at one time advocated that pre-retirement seminars should be given, the employees should attend them to find out about their benefits and about 

all of this information. The agencies, of course, have reduced all of 

that because of the budget constraints and the answer is no. 

Senator AKAKA. Mr. Beaudoin, as you know, Mr. McFarland testified about a need for increased communication with annuitants to 

H605-41331-79W7 with DISTILLER

33 

prevent improper payments due to unreported deaths or changes to 

personnel information. My question for you is, do you have recommendations for education or assistance your members might 

find useful so that they know how to update OPM and the Social 

Security Administration (SSA) about life changes? 

Mr. BEAUDOIN. Sir, we in NARFE have a retirement benefits section that deals mainly with that issue and with OPM, and every 

day, we receive hundreds of calls from members and annuitants because they cannot contact OPM. The lines are busy. There is no 

way for them to go on electronically to get information. It is the 

backlog and the inability to contact OPM to get information that 

is causing a lot of the problem. Of course, the whole problem that 

we are here to talk about is the backlog in even getting their annuities. But once they get them, they cannot get through to OPM because there is nobody there to answer the lines. 

Senator AKAKA. Mr. Nesterczuk, you recommended allowing people to begin their retirement applications while they are still active 

employees. Please elaborate on how you think this should be done 

and why you think it would speed up the process. 

Mr. NESTERCZUK. I think just having publicized the delays and 

the difficulties that employees and retirees are facing with the system as is has alerted the employees, or potential retirees, to the 

processing problems that could face them. Just knowing 2 to 3 

months before you are going to retire that kicking in an application 

form will start the process of amassing the information necessary 

to clear you at exit should provide enough incentive for them to get 

involved. 

It is not always the fault of the person you are speaking to. 

There are—if you have had a history where you left an agency 10 

or 15 years prior to your retirement, the files in that agency could 

most likely be in archives halfway across the country. You need to 

place a request to get that stuff activated and back out. That is 

weeks. That is not days. That is weeks before the physical files are 

actually placed in front of the processor. So it is not OPM’s fault 

necessarily nor your H.R. office. It is the system that we operate 

in. 

And I think employees need to be made aware of that. If you 

have worked in one agency for 20, 30 years and the record is continuous, that is not an issue. But if you have a broken employment 

record, then you need to know that it will take weeks to reconstruct that. OPM will not finalize anything until they see hard 

proof. Your H.R. office could provide the information, but OPM will 

not clear that until they see the hard proof. So you have to get that 

information rolling before you are ready to go. 

And, of course, the employees have the greatest vested interest 

to see that happen and they can dog the process. They will have 

more time to call that archive operation and make sure that their 

files have been cut loose rather than the H.R. person that may be 

dealing with 50 or 60 cases at the time. So that is why I think it 

is a good idea, and as a matter of policy, OPM ought to encourage—the CHCO Council through issuances, through publications, 

the American Association of Retired Persons (AARP) can get involved. If you identify what are the stumbling blocks in the process 

and how employees can intervene on their own behalf, you will get 

H605-41331-79W7 with DISTILLER

34 

them activated. It will serve everyone, OPM, the processors. It will 

serve everyone well to do that. 

Senator AKAKA. Thank you very much for your response. 

Mr. Beaudoin, I would like to get your thoughts on this recommendation, as well. Do you think your members would benefit 

from beginning the retirement process while they are still in active 

service? 

Mr. BEAUDOIN. I do believe in that, because if they, as has been 

testified already, if they would start 3, 4, 5, 6 months before their 

retirement, we would not end up with the problems that we are 

presently having, and that is that right now, 23 percent of all the 

claims are missing one or more records. Eleven percent are not 

even received within 30 days. And the problems with the agencies 

is that they do not have complete information, and as has been testified earlier, the individuals do. If the individuals would look at 

their records and say, as Mr. Berry did, oh, you are missing this 

portion of it, I think it would help to expedite the claims and we 

would not end up with 48,000-plus claims in the backlog. 

Senator AKAKA. Yes, thank you. Senator Warner do you have 

questions? 

Senator WARNER. Thank you, Mr. Chairman. I know you have 

been very generous with your time for me today and I really appreciate you willing to have me come over and participate as a member of your Subcommittee. I also really particularly appreciate you 

holding this hearing to bring this matter to the attention of your 

Subcommittee and the public. 

And I also want to thank my friends from NARFE. I have had 

a long journey with NARFE back to my times as Governor. Mr. 

Beaudoin, thank you for your testimony. 

I would ask—just two or three quick questions. One is, you made 

the point, and at least, I want to try to followup with Mr. Berry 

on this point, that it did not sound like there was really that standardized package and checklist of what you should pre-prepare. I 

agree with Mr. Nesterczuk that maybe we ought to start that process a little bit earlier. But even if you do not, you ought to at least 

make that checklist available on a standardized basis. 

And would it not seem to me, and you made the point that perhaps those pre-retirement seminars were cutoff because of budget 

constraints, but it would be interesting to see an analysis. If you 

do not end up getting the data and those are the claims that are 

taking much longer, the actual cost of processing that claim—I 

think I am going to press him on that $107 number. I think it is 

actually higher than that on some other data I have. But it would 

seem to me that we would save money in the long run if you went 

ahead and started this process earlier or if you reinstituted those 

pre-retirement seminars or at least put together a standardized 

checklist. Would you concur with that, or—— 

Mr. BEAUDOIN. I would, Senator. I believe that information is 

vital. It is needed by the agencies. But part of the problem, also, 

is that the agencies are sending OPM incomplete data and there 

are no teeth in there, in that, so I am sending you incomplete data. 

Just send it back to me and I will try to fill in the blanks. No, we 

ought to hold those agencies, hold them accountable so that they 

make sure that when they send the information, they get it from 

H605-41331-79W7 with DISTILLER

35 

the retiree or the employee at the time and then they send factual 

information to OPM. 

And I think we need to do that. Congress needs to make sure 

that they are held accountable, the agencies, that when they send 

the data to OPM, it is correct, it is complete, and it is timely, and 

maybe that will help reduce the backlog. 

Senator WARNER. And, Mr. Chairman, one other thing. It would 

seem that if Mr. Berry is going to report on a regular basis the 

backlog, which now, I believe, is actually not at 42,000, but one of 

the comments today, in the mid-60,000, and if we could get those 

reporting agencies, their error rates, and perhaps there might be 

some ways that this Subcommittee, and any assistance I could 

give, that would help give OPM some teeth to make sure that those 

other agencies that are reporting to OPM actually try to have that 

as a priority, as well. Perhaps the CHCO Council is one tool. But 

my understanding is, and you may recall, or others, that when 

there was this situation in the early 1990s, that simply publicizing 

the error rate from some of the agencies helped create some, at 

least, pressure in town on that item and we might want to return 

to it. 

One other question, and then I want to ask Mr. Nesterczuk one 

question, and then I will, again, not take too much time, but I was 

happy to hear Mr. Berry say that they have gone back out to some 

of our recently retired Federal employees that might be able to 

help fill in since there is this lag time on training. Have you been 

asked at NARFE to help put the word out to your members that 

there might be opportunities coming back at OPM if you want to 

re-up for a period of time to help us get through this backlog? 

Mr. BEAUDOIN. No, we have not. We would be happy to put the 

word out and to do that. 

But if I could mention one other thing, Senator, in OPM’s plan, 

they have voluntary overtime. We believe that is the wrong approach. We have too many people waiting for their annuities, too 

many people that are not getting their full annuities. They are getting, as I mentioned earlier, 17 percent, 23 percent, 50 percent, 

whereas even the one that you mentioned earlier today, the lady 

from Colorado, says, I cannot do anything. I cannot buy anything. 

I do not get any money. We need to do something. 

I would hope that Congress would step in and make it mandatory overtime for the OPM people to work an extra 20 hours a 

week until the backlog is gone. Once it is gone, then they can look 

into automation. They can look at all the rest of it. But that backlog has to be taken care of, and it has to be taken care of now. 

Senator WARNER. In prior backlogs, there has been mandatory 

overtime—I thought you had said to me—was that the case? 

Mr. BEAUDOIN. It was a voluntary backlog—I mean, I am sorry, 

not the backlog, voluntary overtime—— 

Senator WARNER. Yes. 

Mr. BEAUDOIN [continuing]. But that the backlog has to be reduced, sir. 

Senator WARNER. Mr. Nesterczuk, I concur with many of your 

comments that you made and do believe we need to move through 

to a more technology-based solution, not just an increased personnel solution. I guess my last question would simply be two-fold. 

H605-41331-79W7 with DISTILLER

36 

One, are there other examples, perhaps not from the private sector 

because clearly with all the procedures and rules and regulations 

of the Federal Government, but comparison to other State systems 

or other national government systems, Canada, that might have a 

further along technological solution, No. 1. 

And No. 2, it seemed it was clear that the effort with Retire EZ 

did not work out that well. How do we make sure that as we go 

down this path again we do not make those same mistakes? 

Mr. NESTERCZUK. I think in the case of your first question about 

other available comparative systems, I am not aware of. I cannot 

answer that question. 

I do believe OPM was primarily responsible for the failure of Retire EZ. If the contractor in making a delivery was surprised at 

what was not functioning properly in there, they clearly did not 

have the parameters properly stipulated. OPM I think more than 

probably, for certain—should have done their homework better in 

putting out the procurement competitively initially so that the contractors knew what they were really up against instead of what it 

is that they got that clearly did not meet the requirements of OPM, 

of their customers. 

So they need to go down—I would not necessarily have tossed out 

Retire EZ. I would have pared it down so that it would pick up at 

least part of the workload that OPM had, get something for your 

money out of that initial investment. Instead of expanding it, scale 

it back. The $290 million was spread over 10 years, so it is not like 

they lost the full amount. I believe it was something like $19, $20 

million for the 2-year effort. But I would have gotten something out 

of that, out of the contractor, and focused them on some part of the 

effort to subsequently buildupon. 

I mean, I had been involved in system programming, FORTRAN 

programming in my day, including some fairly complicated systems, so I know that once you have done something, you have a 

beginning and then you can fix it and build on it, et cetera, expand. 

I suspect there was a lot of political scrutiny—a lot of public scrutiny and political pressure that came to bear on not delivering after 

2 years’ worth of expectations. Backlogs may have been building up 

already and so they just pulled the plug on it to try to clean the 

slate. 

I think, also, OPM needs to rethink its approach of managing the 

retirement system. This business of keeping everything in-house 

and close hold does not work anymore. Technology advances, 

evolves very quickly, and you are better off bringing in players 

from the outside as partners who keep up with that for you and 

then you just give them what it is that you want and let them 

worry about how to deliver. And that is probably today a much better business model to utilize. But that would require rethinking 

what parts of the retirement system they want to keep in-house 

and what to put out the door on a competitive basis and then just 

monitor the process, get feedback on errors, fix it, work with the 

contractors. And you do not have to get stuck with one. You can 

get several. 

Senator WARNER. Well, let me thank both witnesses, and Mr. 

Chairman, again, thank you for the courtesy, and any way I can 

H605-41331-79W7 with DISTILLER

37 

help you as we pursue this matter, count me in. Thank you, Mr. 

Chairman. 

Senator AKAKA. Thank you very much, Senator Warner, for participating in this hearing. 

This is my final question and it is to both of you. What should 

OPM’s No. 1 priority be for its retirement processing reforms? I 

would like to call on Mr. Nesterczuk to answer first, followed by 

Mr. Beaudoin. Mr. Nesterczuk. 

Mr. NESTERCZUK. Well, I think initially, in the short term, I 

would rely on the agencies. I would change the rules for processing 

and delegate some authority to the agencies. OPM in the past has 

delegated various kinds of staffing authorities in terms of the ability to hire employees. They gave it away, gave up their own authorities to let other agencies in the process participate, become 

more efficient and speed up the hiring tremendously. I would push 

for that initially. 

Have OPM, instead of bringing all the folks in-house—that is 

their first step—simultaneously shove some of the work back out. 

They have very capable people in the agencies, especially the agencies like DOD that turn loose an awful lot of retirees. I would work 

with those agencies, partner up with them, authorize them to be 

the claims adjudicators, the finalizers, and just monitor their 

progress on it. That might offload 20, 30 percent of the workload 

right off the get-go. So that would be what I would do in the short 

term as my immediate priority. 

And longer term, absolutely, stick with modernization. The future is not going to be with more claims processors. Thank you. 

Senator AKAKA. Thank you, Mr. Nesterczuk. Mr. Beaudoin. 

Mr. BEAUDOIN. Yes, sir. I believe that the problem, as we all 

know, is the backlog. We have thousands of people that are inconvenienced, that do not have the pay to live on. Their lives are 

upset. The communities that they live in, they cannot even benefit 

from them. So I believe OPM needs to do everything they can to 

reduce that backlog. 

They need to, as has been testified, work with the agencies to demand that the information coming to them is accurate and complete the first time. They need to have people of not the administrative specialists but others answer the phone to free up the administrative specialists. They need to bring in overtime, mandatory 

overtime. They need to bring back retirees, more retirees. 

They need to be more automated so that anyone who wants to 

check their claim can do it online. This is—we are in the 21st century. They should be able to do things online. They should not have 

to go, as they said, with paper and pencil and telephone. No. Go 

on a computer. I can check my status. I can check my claim. But 

we are still operating in the 20th century. I am not even sure— 

maybe it is the 19th century. But they need to move ahead and I 

do not think they are doing it fast enough, sir. Thank you. 

Senator AKAKA. Well, I want to thank you both. It was so good 

to hear things from your experience and the people that you represent. Your responses will certainly be taken under consideration 

here and we all look forward to improvement in the retirement system. There are many times when people like you who, I would say, 

H605-41331-79W7 with DISTILLER

38 

are in the trenches, know the problem better than officials do, so 

we value your responses. 

I want to thank you very much for your testimonies and your responses. There are no further questions. 

In this time of shrinking budgets, many agencies are offering 

early retirement options. This could mean a wave of retirements 

will be added to what is already a sizable claims backlog. OPM 

must prioritize its resources, address shortcomings, and focus its 

attention on providing the level of service that retirees deserve. 

I want to again thank our witnesses for being here today. I believe that this hearing provided good insight into how Federal retirement processing can and must be improved. The hearing record 

will be open for one week for additional statements or questions 

from other Members of the Subcommittee. 

Again, thank you very much. Mahalo. This hearing is adjourned. 

[Whereupon, at 4:50 p.m., the Subcommittee was adjourned.] 

H605-41331-79W7 with DISTILLER

(39) 

A P P E N D I X 

H605-41331-79W7 with DISTILLER


73672.001
40 

H605-41331-79W7 with DISTILLER


73672.002
41 

H605-41331-79W7 with DISTILLER


73672.003
42 

H605-41331-79W7 with DISTILLER


73672.004
43 

H605-41331-79W7 with DISTILLER


73672.005
44 

H605-41331-79W7 with DISTILLER


73672.006
45 

H605-41331-79W7 with DISTILLER


73672.007
46 

H605-41331-79W7 with DISTILLER


73672.008
47 

H605-41331-79W7 with DISTILLER


73672.009
48 

H605-41331-79W7 with DISTILLER


73672.010
49 

H605-41331-79W7 with DISTILLER


73672.011
50 

H605-41331-79W7 with DISTILLER


73672.012
51 

H605-41331-79W7 with DISTILLER


73672.013
52 

H605-41331-79W7 with DISTILLER


73672.014
53 

H605-41331-79W7 with DISTILLER


73672.015
54 

H605-41331-79W7 with DISTILLER


73672.016
55 

H605-41331-79W7 with DISTILLER


73672.017
56 

H605-41331-79W7 with DISTILLER


73672.018
57 

H605-41331-79W7 with DISTILLER


73672.019
58 

H605-41331-79W7 with DISTILLER


73672.020
59 

H605-41331-79W7 with DISTILLER


73672.021
60 

H605-41331-79W7 with DISTILLER


73672.022
61 

H605-41331-79W7 with DISTILLER


73672.023
62 

H605-41331-79W7 with DISTILLER


73672.024
63 

H605-41331-79W7 with DISTILLER


73672.025
64 

H605-41331-79W7 with DISTILLER


73672.026
65 

H605-41331-79W7 with DISTILLER


73672.027
66 

H605-41331-79W7 with DISTILLER


73672.028
67 

H605-41331-79W7 with DISTILLER


73672.029
68 

H605-41331-79W7 with DISTILLER


73672.030
69 

H605-41331-79W7 with DISTILLER


73672.031
70 

H605-41331-79W7 with DISTILLER


73672.032
71 

H605-41331-79W7 with DISTILLER


73672.033
72 

H605-41331-79W7 with DISTILLER


73672.034
73 

H605-41331-79W7 with DISTILLER


73672.035
74 

H605-41331-79W7 with DISTILLER


73672.036
75 

H605-41331-79W7 with DISTILLER


73672.037
76 

H605-41331-79W7 with DISTILLER


73672.038
77 

H605-41331-79W7 with DISTILLER


73672.039
78 

H605-41331-79W7 with DISTILLER


73672.040
79 

H605-41331-79W7 with DISTILLER


73672.041
80 

H605-41331-79W7 with DISTILLER


73672.042
81 

H605-41331-79W7 with DISTILLER


73672.043
82 

H605-41331-79W7 with DISTILLER


73672.044
83 

H605-41331-79W7 with DISTILLER


73672.045
84 

H605-41331-79W7 with DISTILLER


73672.046
85 

H605-41331-79W7 with DISTILLER


73672.047
86 

H605-41331-79W7 with DISTILLER


73672.048
87 

H605-41331-79W7 with DISTILLER


73672.049
88 

H605-41331-79W7 with DISTILLER


73672.050
89 

H605-41331-79W7 with DISTILLER


73672.051
90 

H605-41331-79W7 with DISTILLER


73672.052
91 

H605-41331-79W7 with DISTILLER


73672.053
92 

H605-41331-79W7 with DISTILLER


73672.054
93 

H605-41331-79W7 with DISTILLER


73672.055
94 

H605-41331-79W7 with DISTILLER


73672.056
95 

H605-41331-79W7 with DISTILLER


73672.057
96 

H605-41331-79W7 with DISTILLER


73672.058
97 

H605-41331-79W7 with DISTILLER


73672.059
98 

H605-41331-79W7 with DISTILLER


73672.060
99 

H605-41331-79W7 with DISTILLER


73672.061
100 

H605-41331-79W7 with DISTILLER


73672.062
101 

H605-41331-79W7 with DISTILLER


73672.063
102 

H605-41331-79W7 with DISTILLER


73672.064
103 

Æ 

H605-41331-79W7 with DISTILLER


73672.065