FEDERAL RETIREMENT 

PROCESSING

OPM Is Pursuing 

Incremental Information 

Technology Improvements 

after Canceling a 

Modernization Plagued by 

Management Weaknesses

Statement of Valerie C. Melvin, Director 

Information Management and Technology 

Resources Issues

Testimony before the Subcommittee on 

Federal Workforce, U.S. Postal Service, and 

the Census, Committee on Oversight and 

Government Reform, House of 

Representatives

For Release on Delivery 

Expected at 9:30 a.m. EDT

Thursday, May 9, 2013

GAO-13-580T

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-13-580T, a testimony 

before the Subcommittee on Federal 

Workforce, U.S. Postal Service, and the 

Census, Committee on Oversight and 

Government Reform, House of 

Representatives

May 9, 2013

FEDERAL RETIREMENT PROCESSING 

OPM Is Pursuing Incremental Information 

Technology Improvements after Canceling a

Modernization Plagued by Management Weaknesses

Why GAO Did This Study

OPM is the central human resources 

agency for the federal government 

and, as such, is responsible for 

ensuring that the government has an 

effective civilian workforce. As part of 

its mission, OPM defines recruiting and 

hiring processes and procedures; 

provides federal employees with 

various benefits, such as health 

benefits; and administers the 

retirement program for federal 

employees. OPM’s use of IT is critical 

in carrying out its responsibilities; in 

fiscal year 2013 the agency plans to 

invest about $85 million in IT systems 

and services. For over two decades, 

OPM has been attempting to 

modernize its federal employee 

retirement process by automating 

paper-based processes and replacing 

antiquated information systems. 

However, these efforts have been 

unsuccessful, and the agency 

canceled its most recent large-scale 

retirement modernization effort in

February 2011. 

GAO was asked to summarize its work 

on challenges OPM has faced in 

attempting to modernize the federal 

employee retirement process and to 

describe the agency’s recent reported 

actions to improve its retirement 

processing. To do this, GAO generally 

relied on previously published work. 

What GAO Recommends

GAO is not making new 

recommendations at this time. GAO 

has previously made numerous 

recommendations to address IT 

management challenges that OPM has 

faced in carrying out its retirement 

modernization efforts. Fully addressing 

these challenges remains key to the

success of OPM’s efforts.

What GAO Found

In a series of reviews, GAO found that the Office of Personnel Management’s 

(OPM) retirement modernization efforts were hindered by weaknesses in key 

management practices that are essential to successful information technology 

(IT) modernization projects. For example, in 2005, GAO made recommendations 

to address weaknesses in the following areas:

• Project management: While OPM had defined major components of its 

retirement modernization effort, it had not identified the dependencies among 

them, increasing the risk that delays in one activity could have unforeseen 

impacts on the progress of others.

• Risk management: OPM did not have a process for identifying and tracking 

project risks and mitigation strategies on a regular basis. Thus, it lacked a 

mechanism to address potential problems that could adversely impact the 

cost, schedule, and quality of the modernization effort.

• Organizational change management: OPM had not adequately prepared 

its staff for changes to job responsibilities resulting from the modernization by 

developing a detailed transition plan. This could lead to confusion about roles 

and responsibilities and hinder effective system implementation.

In 2008, as OPM was on the verge of deploying an automated retirement 

processing system, GAO reported deficiencies in and made recommendations to 

address additional management capabilities:

• Testing: The results of tests 1 month prior to the deployment of a major 

system component revealed that it had not performed as intended. These 

defects, along with a compressed testing schedule, increased the risk that 

the system would not work as intended upon deployment.

• Cost estimating: The cost estimate OPM developed was not fully reliable. 

This meant that the agency did not have a sound basis for formulating 

budgets or developing a program baseline.

• Progress reporting: The baseline against which OPM was measuring the 

progress of the program did not reflect the full scope of the project; this 

increased the risk that variances from planned performance would not be 

detected.

In 2009, GAO reported that OPM continued to have deficiencies in its cost 

estimating, progress reporting, and testing practices and made recommendations 

to address these and other weaknesses in the planning and oversight of the 

modernization effort. OPM agreed with these recommendations and began to 

address them, but, in February 2011, it terminated the modernization effort. 

In January 2012, OPM released a plan to improve retirement processing that 

aimed at targeted, incremental improvements rather than a large-scale 

modernization. Toward this end, OPM has reported hiring new claims-processing 

staff, taking steps to identify potential process improvements, and working with 

other agencies to improve data quality. Further, the agency reported making IT 

improvements that allow retirees to view the status of their accounts and

automating parts of the retirement application process. However, the plan reflects 

a less ambitious goal for retirement processing timeliness and does not address 

improving or replacing the legacy systems that support retirement processing.

View GAO-13-580T. For more information, 

contact Valerie C. Melvin at (202) 512-6304 or 

melvinv@gao.gov.
Page 1 GAO-13-580T

441 G St. N.W.

Washington, DC 20548

Chairman Farenthold, Ranking Member Lynch, and Members of the 

Subcommittee:

Thank you for inviting me to testify at today’s hearing on the Office of 

Personnel Management’s (OPM) system for processing federal employee 

retirement benefits. The use of information technology (IT) is integral to 

carrying out this important responsibility,1 and for over two decades, OPM 

engaged in efforts to modernize the retirement process by automating 

paper-based functions and replacing antiquated information systems. 

However, the agency experienced numerous challenges in managing its 

modernization initiatives. Reports that we issued in 2005, 2008, and 2009 

on its efforts toward planning and implementing a modernized retirement 

system highlighted a long history of undertaking modernization projects 

that did not yield the intended outcomes.2

The information in my testimony is primarily based on our previous work 

at OPM. We also reviewed the agency’s plan and related information 

discussing its recent actions to improve retirement processing services. 

We performed our work in support of this testimony during April and May 

2013. All work on which this testimony is based was conducted in 

accordance with generally accepted government auditing standards. 

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

sufficient, appropriate evidence to provide a reasonable basis for our 

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

At your request, my testimony 

today summarizes the history of OPM’s retirement modernization efforts 

along with our findings regarding the challenges that it faced in managing 

those efforts, and describes more recent actions the agency has reported 

taking to improve the retirement process.

 

1

In fiscal year 2013 the agency plans to invest about $85 million in IT systems and 

services.

2

GAO, Office of Personnel Management: Retirement Modernization Planning and 

Management Shortcomings Need to Be Addressed, GAO-09-529 (Washington, D.C.: Apr. 

21, 2009); Office of Personnel Management: Improvements Needed to Ensure Successful 

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

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

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

D.C.: Mar. 28, 2008); and Office of Personnel Management: Retirement Systems 

Modernization Program Faces Numerous Challenges, GAO-05-237 (Washington, D.C.: 

Feb. 28, 2005). 

 
 

Page 2 GAO-13-580T

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

As the central human resources agency for the federal government, OPM 

is tasked with ensuring that the government has an effective civilian 

workforce. To carry out this mission, OPM delivers human resources 

products and services including policies and procedures for recruiting and 

hiring, provides health and training benefit programs, and administers the 

retirement program for federal employees. According to the agency, 

approximately 2.7 million active federal employees and nearly 2.5 million 

retired federal employees rely on its services.3

According to OPM, the retirement program serves current and former 

federal employees by providing (1) tools and options for retirement 

planning and (2) retirement compensation. Two defined-benefit retirement 

plans that provide retirement, disability, and survivor benefits to federal 

employees are administered by the agency. The first plan, the Civil 

Service Retirement System (CSRS), provides retirement benefits for most 

federal employees hired before 1984. The second plan, the Federal 

Employees Retirement System (FERS), covers most employees hired in 

or after 1984 and provides benefits that include Social Security and a 

defined contribution system.4

OPM and employing agencies’ human resources and payroll offices are 

responsible for processing federal employees’ retirement applications. 

The process begins when an employee submits a paper retirement 

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

completed when the individual begins receiving regular monthly benefit 

payments (as illustrated in fig. 1).

 

3

OPM, Fiscal Year 2012 Annual Performance Report (February 2013).

4

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

the Federal Retirement Thrift Investment Board administers the defined-contribution 

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

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

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

by the employee and employer.

Background 

Federal Employee 

Retirement Application 

Processing Is Complex
 

Page 3 GAO-13-580T

Figure 1: Simplified View of Retirement Application Process

Once an employee submits an application, the human resources office 

provides retirement counseling services to the employee and augments 

the retirement application with additional paperwork, such as a separation 

form that finalizes the date the employee will retire. Then the agency 

provides the retirement package to the employee’s payroll office. After the 

employee separates for retirement, the payroll office is responsible for 

reviewing the documents for correct signatures and information, making 

sure that all required forms have been submitted, and adding any 

additional paperwork that will be necessary for processing the retirement 

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

retirement package is mailed to OPM to continue the retirement process. 

Payroll offices are required to submit the package to OPM within 30 days 

of the retiree’s separation date.

Upon receipt of the retirement package, OPM calculates an interim 

payment based on information provided by the employing agency. The 

interim payments are partial payments that typically provide retirees with 
 

Page 4 GAO-13-580T

80 percent of the total monthly benefit they will eventually receive.5

The agency recently reported that the average time to process retirement 

claims was 156 days in 2012. According to the Deputy Associate Director 

for the Center of Retirement and Insurance Services, about 200 

employees are directly involved in processing the approximately 100,000 

retirement applications OPM receives annually. Retirement processing 

includes functions such as determining retirement eligibility, inputting data 

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

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

documented on the agency’s internal website, to process retirement 

applications. For example, the site contains memorandums that outline 

new procedures for handling special retirement applications, such as 

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

involves the use of over 80 information systems that have approximately 

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

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

among other things, information regarding the total amount of benefit 

payments to which an employee is entitled.

OPM 

then starts the process of analyzing the retirement application and 

associated paperwork to determine the total monthly benefit amount to 

which the retiree is entitled. This process includes collecting additional 

information from the employing agency’s human resources and payroll

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

before calculating benefits. After OPM completes its review and 

authorizes payment, the retiree begins receiving 100 percent of the 

monthly retirement benefit payments. OPM then stores the paper 

retirement folder at the Retirement Operations Center in Boyers, 

Pennsylvania.

OPM has reported that a greater retirement processing workload is 

expected due to an anticipated increase in the number of retirement 

applications over the next decade, although current retirement processing 

operations are at full capacity. Further, the agency has identified several 

factors that limit its ability to process retirement benefits in an efficient and 

timely manner. Specifically, OPM noted that

 

5

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

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

payment which they are entitled.
 

Page 5 GAO-13-580T

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

in a higher number of errors and delays in providing benefit payments;

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

existing information systems and processes pose increasing risks to 

the accuracy of benefit payments;

• current manual capabilities restrict customer service;

• federal employees have limited access to retirement records, making 

planning for retirement difficult; and

• attracting qualified personnel to operate and maintain the antiquated 

retirement systems, which have about 3 million lines of custom 

programming, is challenging.6

Recognizing the need to modernize its retirement processing, in the late 

1980s OPM began initiatives that were aimed at automating its antiquated 

paper-based processes. Initial modernization visions called for developing 

an integrated system and automated processes to provide prompt and 

complete benefit payments. However, following attempts over more than 

two decades, the agency has not yet been successful in achieving the 

modernized retirement system that it envisioned.

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

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

decided to reevaluate the program, and the Office of Management and 

Budget requested an independent review of the program, which identified 

various management weaknesses. The independent review suggested 

areas for improvement and recommended terminating the program if 

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

program.

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

the Retirement Systems Modernization (RSM) program. The agency 

originally intended to structure the program as an acquisition of 

commercially available hardware and software that would be modified inhouse to meet its needs. From 1997 to 2001, OPM developed plans and 

analyses and began developing business and security requirements for 

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

the retirement modernization initiative.

 

6

GAO-09-529. 

OPM Has a Long History of 

Unsuccessful Retirement 

Modernization Initiatives
 

Page 6 GAO-13-580T

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

third initiative to modernize the retirement process and examined the 

possibility of privately sourced technologies and tools. Toward this end, 

the agency determined that contracting was a viable alternative and, in 

2006, awarded three contracts for the automation of retirement 

processing, the conversion of paper records to electronic files, and 

consulting services to redesign its retirement operations.

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

automated retirement processing system. However, by May 2008 the 

agency determined that the system was not working as expected and 

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

attempting to address quality issues, the agency terminated the contract 

for the system. In November 2008, OPM began restructuring the program 

and reported that its efforts to modernize retirement processing would 

continue. However, after several years of trying to revitalize the program, 

the agency terminated the retirement system modernization in February 

2011.

OPM’s efforts to modernize its retirement system were hindered by 

weaknesses in several key IT management disciplines. Our experience 

with major modernization initiatives has shown that having sound 

management capabilities is essential to achieving successful outcomes. 

These capabilities include project management, risk management, 

organizational change management, system testing, cost estimating, 

progress reporting, planning, and oversight, among others. However, we 

found that OPM’s capabilities in these areas were not sufficiently 

developed. For example, in reporting on RSM in February 2005, we noted 

weaknesses in project management, risk management, and 

organizational change management.7

• Project management is the process for planning and managing all 

project-related activities, including defining how project components 

are interrelated. Effective project management allows the 

performance, cost, and schedule of the overall project to be measured 

and controlled in comparison to planned objectives. Although OPM 

had defined major retirement modernization project components, it 

 

7

GAO-05-237. 

OPM’s Unsuccessful 

Retirement 

Modernization Efforts 

Were Plagued by IT 

Management 

Weaknesses 
 

Page 7 GAO-13-580T

had not defined the dependencies among them. Specifically, the 

agency had not identified critical tasks and their impact on the 

completion of other tasks. By not identifying critical dependencies 

among project components, OPM increased the risk that unforeseen 

delays in one activity could hinder progress in other activities.

• Risk management entails identifying potential problems before they 

occur. Risks should be identified as early as possible, analyzed, 

mitigated, and tracked to closure. OPM officials acknowledged that 

they did not have a process for identifying and tracking retirement 

modernization project risks and mitigation strategies on a regular 

basis but stated that the agency’s project management consultant 

would assist it in implementing a risk management process. Lacking 

such a process, OPM did not have a mechanism to address potential 

problems that could adversely impact the cost, schedule, and quality 

of the retirement modernization project.

• Organizational change management includes preparing users for the 

changes to how their work will be performed as a result of a new 

system implementation. Effective organizational change management 

includes plans to prepare users for impacts the new system might 

have on their roles and responsibilities, and a process to manage 

those changes. Although OPM officials stated that change 

management posed a substantial challenge to the success of 

retirement modernization, they had not developed a detailed plan to 

help users transition to different job responsibilities. Without having 

and implementing such a plan, effective implementation of new 

systems could be hindered by confusion about user roles and 

responsibilities.

We recommended that the Director of OPM ensure that the retirement 

modernization program office expeditiously establish processes for 

effective project management, risk management, and organizational 

change management. In response, the agency initiated steps toward 

establishing management processes for retirement modernization and 

demonstrated activities to address our recommendations.

We reported again on OPM’s retirement modernization in January 2008, 

as the agency was about to deploy a new automated retirement 

processing system.8

 

8

We noted weaknesses in additional key 

GAO-08-345. 
 

Page 8 GAO-13-580T

management capabilities, including system testing, cost estimating, and 

progress reporting.

• Effective testing is an essential activity of any project that includes 

system development. Generally, the purpose of testing is to identify 

defects or problems in meeting defined system requirements or 

satisfying system user needs. At the time of our review, 1 month 

before OPM planned to deploy a major system component, test 

results showed that the component had not performed as intended. 

We warned that until actual test results indicated improvement in the 

system, OPM risked deploying technology that would not accurately 

calculate retirement benefits. Although the agency planned to perform 

additional tests to verify that the system would work as intended, the 

schedule for conducting these tests became compressed from 5 

months to 2-1/2 months, with several tests to be performed 

concurrently rather than sequentially. The agency stated that a lack of 

testing resources, including the availability of subject matter experts, 

and the need for further system development contributed to the delay 

of planned tests and the need for concurrent testing. The high degree 

of concurrent testing that OPM planned to meet its February 2008 

deployment schedule increased the risk that the agency would not 

have the resources or time to verify that the planned system worked 

as expected.

• Cost estimating is the identification of individual project cost elements, 

using established methods and valid data to estimate future costs. 

Establishing a reliable cost estimate is important for developing a 

project budget and having a sound basis for measuring performance, 

including comparing the actual and planned costs of project activities. 

Although OPM developed a retirement modernization cost estimate, it 

was not supported by the documentation that is fundamental to a 

reliable cost estimate. Without a reliable cost estimate, OPM lacked a 

sound basis for formulating retirement modernization budgets or for 

developing the cost baseline that is necessary for measuring and 

predicting project performance.

• Earned value management (EVM) is a tool for measuring program 

progress by comparing the value of work accomplished with the 

amount of work expected to be accomplished. Fundamental to reliable 

EVM is the development of a baseline against which variances are 

calculated. OPM used EVM to measure and report monthly 

performance of the retirement modernization system. The reported 

results indicated that the project was progressing almost exactly as 

planned. However, this view of project performance was not reliable 

because the baseline on which it was based did not reflect the full 

scope of the project, had not been validated, and was unstable (i.e., 
 

Page 9 GAO-13-580T

subject to frequent changes). This EVM approach in effect ensured 

that material variances from planned performance would not be 

identified and that the state of the project would not be reliably 

reported.

We recommended that the Director of OPM conduct effective system 

tests prior to system deployment and improve program cost estimation 

and progress reporting. OPM stated that it concurred with our 

recommendations and would take steps to address the weakness we 

identified. Nevertheless, OPM deployed a limited initial version of the 

modernized retirement system in February 2008. After unsuccessful 

efforts to address system quality issues, the agency suspended system 

operation, terminated the system contract, and began restructuring the

modernization effort.

In April 2009, we again reported on OPM’s retirement modernization, 

noting that the agency still remained far from achieving the modernized 

retirement processing capabilities that it had planned.9

• Although it concurred with our January 2008 recommendation to 

develop a revised cost estimate for the retirement modernization 

effort, OPM had not completed initial steps for developing the new 

estimate by the time we issued our report in April 2009. We reported 

that the agency had not yet fully defined the estimate’s purpose, 

developed an estimating plan, or defined the project’s characteristics. 

By not completing these steps, OPM increased the risk that it would 

produce an unreliable estimate and not have a sound basis for 

measuring project performance and formulating retirement 

modernization budgets.

Specifically, we 

noted that significant weaknesses continued to exist in the areas of cost 

estimating, progress reporting, and testing, while also noting two 

additional weaknesses related to planning and oversight.

• OPM also concurred with our January 2008 recommendation to 

establish a basis for effective EVM but had not completed key steps 

as of the time of our report. Specifically, despite planning to use EVM 

to report the retirement modernization project’s progress, the agency 

had not developed a reliable cost estimate and a validated baseline. 

Engaging in EVM reporting without first taking these fundamental 

 

9

GAO-09-529. 
 

Page 10 GAO-13-580T

steps could have again rendered the agency’s assessments 

unreliable.

• As previously discussed, effective testing is an essential component 

of any project that includes developing systems. To be effectively 

managed, testing should be planned and conducted in a structured 

and disciplined fashion. Beginning the test planning process in the 

early stages of a project life cycle can reduce rework later. Early test 

planning in coordination with requirements development can provide 

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

development of requirements may reduce the number of defects 

identified later and the costs related to requirements rework or change 

requests. OPM’s need to compress its testing schedule and conduct 

tests concurrently, as we reported in January 2008, illustrates the 

importance of planning test activities early in a project’s life cycle. 

However, at the time of our April 2009 report, the agency had not 

begun to plan test activities in coordination with developing its 

requirements for the system it was planning at that time. 

Consequently, OPM increased the risk that it would again deploy a 

system that did not satisfy user expectations and meet requirements.

• Project management principles and effective practices emphasize the 

importance of having a plan that, among other things, incorporates all 

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

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

Although OPM had developed a variety of informal documents and 

briefing slides that described retirement modernization activities, the 

agency did not have a complete plan that described how the program 

would proceed in the wake of its decision to terminate the system 

contract. As a result, we concluded that until the agency completed 

such a plan and used it to guide its efforts, it would not be properly 

positioned to proceed with its restructured retirement modernization 

initiative.

• Office of Management and Budget and GAO guidance call for 

agencies to ensure effective oversight of IT projects throughout all lifecycle phases. Critical to effective oversight are investment 

management boards made up of key executives who regularly track 

the progress of IT projects such as system acquisitions or 

modernizations. OPM’s Investment Review Board was established to 

ensure that major investments are on track by reviewing their 

progress and identifying appropriate actions when investments 

encounter challenges. Despite meeting regularly and receiving 

information that indicated problems with the retirement modernization, 

the board did not ensure that retirement modernization investments 

were on track, nor did it determine appropriate actions for course 

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

Page 11 GAO-13-580T

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

problems the program was facing, such as the lack of an integrated 

master schedule and earned value data that did not reflect the “reality 

or current status” of the program. However, meeting minutes indicated 

that no discussion or action was taken to address these problems. 

According to a member of the board, OPM had not established 

guidance regarding how the board is to communicate 

recommendations and needed corrective actions for investments it 

oversees. Without a fully functioning oversight body, OPM lacked 

insight into the retirement modernization and the ability to make 

needed course corrections that effective boards are intended to 

provide.

Our April 2009 report made new recommendations that OPM address the 

weaknesses in the retirement modernization project that we identified. 

Although the agency began taking steps to address them, the 

recommendations were overtaken by the agency’s decision in February 

2011 to terminate the retirement modernization project.

In mid-January 2012, OPM released a plan to undertake targeted, 

incremental improvements to retirement processing rather than a largescale modernization, which described planned actions in four areas:

• hiring and training 56 new staff to adjudicate retirement claims and 20 

additional staff to support the claims process;

• establishing higher production standards and identifying potential 

retirement process improvements;

• working with other agencies to improve the accuracy and 

completeness of the data they provide to OPM for use in retirement 

processing; and

• improving the department’s IT by pursuing a long-term data flow 

strategy, exploring short-term strategies to leverage work performed 

by other agencies, and reviewing and upgrading systems used by 

retirement services.10

Through implementing these actions, OPM has said that it aims to 

eliminate the agency’s retirement processing backlog and accurately 

process 90 percent of its cases within 60 days by July 31, 2013. 

However, as we testified in February 2012, that goal represents a 

 

10OPM, Strategic Plan for Retirement Services (Jan. 17, 2012).

OPM Has Reported 

Taking Actions to 

Improve Retirement 

Processing 
 

Page 12 GAO-13-580T

substantial reduction from the agency’s fiscal year 2009 retirement 

modernization goal to accurately process 99 percent of cases within 30 

days.11

Last month, OPM officials described steps the agency has begun taking 

to implement the January 2012 plan for retirement services. These steps 

include

Moreover, the plan did not describe whether or how the agency 

intends to modify or decommission the over 80 legacy systems that it 

currently relies on to support retirement processing.

• filling the 56 positions needed to adjudicate retirement claims and 20 

positions needed to support the claims process;

• implementing retirement processing improvements identified during 

an external review of its retirement claims process, such as 

reorganizing benefits claims officers into two tiers to allow the 

processing of more complex inquiries by higher-level officers;12

• improving the accuracy and completeness of retirement data that 

other agencies provide to OPM by conducting audits of the agencies’ 

application submissions and providing more frequent feedback and 

follow-up training.

and

Additionally, the officials identified existing and planned IT improvements 

to support the retirement process. These efforts include

• providing retirees with the ability to view the status of their cases 

through OPM’s web-based application, Services Online;

• developing the capability to accept electronic data that are transferred 

from one of the seven federal payroll processing centers;

• enhancing its internal web-based application, Data Viewer, to allow 11 

other agencies to view retirement case packets;

• upgrading its data storage capacity and production printer;

• sponsoring a challenge, in cooperation with the National Aeronautics 

and Space Administration, for developers to create a system with 

accounting tools for processing service credits;

• updating reporting guides to include processes for sending electronic 

retirement data to OPM; and

 

11GAO, OPM Retirement Modernization: Progress Has Been Hindered by Longstanding 

Information Technology Management Weaknesses, GAO-12-430T (Washington, D.C.: 

Feb. 1, 2012). 

12OPM officials stated that the external review of its pending claims process was 

completed by the United States Navy in November 2012. 
 

Page 13 GAO-13-580T

• planning an initiative to develop an automated retirement case 

management system to replace the agency’s existing document and 

case control system in fiscal year 2014.

Nonetheless, while OPM is planning to replace its legacy document and 

case control system, agency officials stated that there were no major 

plans to decommission any of the agency’s other legacy systems that 

support retirement processing. Although the Associate Director for 

Retirement Services stated that investing in IT is important for improving 

the efficiency of retirement claims processing, the agency has not yet 

planned for improving or replacing the remaining legacy systems that 

support retirement processing.

In summary, despite OPM’s longstanding recognition of the need to 

improve the timeliness and accuracy of retirement processing, the agency 

has thus far been unsuccessful in several attempts to develop the 

capabilities it has long sought. For over two decades, the agency’s 

retirement modernization efforts were plagued by weaknesses in 

management capabilities that are critical to the success of such

endeavors. Among the management disciplines the agency has struggled 

with are project management, risk management, organizational change 

management, cost estimating, system testing, progress reporting, 

planning, and oversight. The incremental steps the agency recently 

reported taking include dedicating additional resources to retirement 

processing; however, they do not address the more fundamental need to 

modernize its legacy IT systems in order to significantly improve the 

efficiency of the process. Until OPM tackles that challenge, and develops 

the management capabilities to carry it out successfully, it may face 

ongoing difficulties in meeting the needs of future retirees.

Chairman Farenthold, Ranking Member Lynch, and Members of the 

Subcommittee, this concludes my prepared statement. I would be 

pleased to respond to any questions that you or other members of the 

Subcommittee may have.
 

Page 14 GAO-13-580T

If you have any questions concerning this statement, please contact 

Valerie C. Melvin, Director, Information Management and Technology 

Resources Issues, at (202) 512-6304 or melvinv@gao.gov. Other 

individuals who made key contributions include Mark T. Bird, Assistant 

Director; David A. Hong; and Lee A. McCracken.

Contact and 

Acknowledgments 

(311500)
This is a work of the U.S. government and is not subject to copyright protection in the 

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

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

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

necessary if you wish to reproduce this material separately.
The Government Accountability Office, the audit, evaluation, and 

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

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and 

policies; and provides analyses, recommendations, and other assistance 

to help Congress make informed oversight, policy, and funding decisions. 

GAO’s commitment to good government is reflected in its core values of 

accountability, integrity, and reliability.

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

cost is through GAO’s website (http://www.gao.gov). Each weekday 

afternoon, GAO posts on its website newly released reports, testimony, 

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

products, go to http://www.gao.gov and select “E-mail Updates.”

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

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

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

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

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

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

TDD (202) 512-2537. 

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

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

Connect with GAO on Facebook, Flickr, Twitter, and YouTube. 

Subscribe to our RSS Feeds or E-mail Updates. Listen to our Podcasts. 

Visit GAO on the web at www.gao.gov. 

Contact:

Website: http://www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

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

Katherine Siggerud, Managing Director, siggerudk@gao.gov, (202) 512-

4400, U.S. Government Accountability Office, 441 G Street NW, Room 

7125, Washington, DC 20548

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

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

Washington, DC 20548

GAO’s Mission

Obtaining Copies of 

GAO Reports and 

Testimony 

Order by Phone

Connect with GAO

To Report Fraud, 

Waste, and Abuse in 

Federal Programs

Congressional 

Relations 

Public Affairs

Please Print on Recycled Paper.