OPM RETIREMENT

MODERNIZATION 

Progress Has Been 

Hindered by Longstanding 

Information Technology 

Management Weaknesses 

Statement of Valerie C. Melvin, Director 

Information Management and Technology 

 Resources Issues

Testimony 

Before the Subcommittee on Oversight of Government 

Management, the Federal Workforce, and the District of 

Columbia, Committee on Homeland Security and 

Governmental Affairs, U.S. Senate

For Release on Delivery 

Expected at 2:30 p.m. EST

Wednesday, February 1, 2012

GAO-12-430T

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-12-430T, a testimony 

before the Subcommittee on Oversight of 

Government Management, the Federal 

Workforce, and the District of Columbia, 

Committee on Homeland Security and 

Governmental Affairs, U.S. Senate 

February 2012 

OPM RETIREMENT MODERNIZATION 

Progress Has Been Hindered by Longstanding 

Information Technology Management Weaknesses

Why GAO Did This Study

The Office of Personnel Management 

(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 information 

technology (IT) is critical in carrying out 

its responsibilities; in fiscal year 2011 

the agency invested $79 million in IT 

systems and services. For over 2 

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 OPM 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. To do 

this, GAO relied on previously 

published work in addition to reviewing 

OPM’s recent plan for retirement 

services. 

What GAO Recommends

GAO is not making new 

recommendations at this time. GAO 

has previously made numerous 

recommendations to address IT 

management challenges 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 OPM’s retirement modernization efforts 

were hindered by weaknesses in key management practices that are essential to 

successful 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, OPM 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 deficiencies, as well as additional weaknesses in the planning 

and oversight of the modernization effort. OPM agreed with these 

recommendations and began to address them, but the agency terminated the 

modernization effort in February 2011. 

More recently, in January 2012, OPM released a new plan to improve retirement 

processing that aims at targeted, incremental improvements rather than a largescale modernization. Specifically, OPM plans to hire new claims-processing staff, 

take steps to identify potential process improvements, and work with other 

agencies to improve data quality. Further, OPM intends to make IT 

improvements that allow retirees to access and update their accounts and 

automate the retirement application process. However, the plan reflects a less 

ambitious retirement processing timeliness goal and does not address improving

or eliminating the legacy systems that support retirement processing. 

View GAO-12-430T. For more information, 

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

melvinv@gao.gov. 
 

Page 1 GAO-12-430T OPM Retirement Modernization 

Chairman Akaka, Ranking Member Johnson, and Members of the 

Subcommittee:

Thank you for inviting me to participate in today’s hearing on the Office of 

Personnel Management’s (OPM) 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; for over two decades, OPM has been attempting to 

modernize the retirement process by automating paper-based processes 

and replacing antiquated information systems. However, the agency has 

experienced challenges in managing its modernization initiatives. Reports 

that we issued in 2005, 2008, and 2009 on the agency’s efforts toward 

planning and implementing a modernized retirement system highlighted a 

long history of undertaking retirement modernization projects that have 

not yielded the intended outcomes. At your request, my testimony today 

summarizes the history of OPM’s retirement modernization efforts and the 

findings from our reports on challenges the agency has faced in 

managing these efforts.1

The information in my testimony is based on our previous work at OPM. 

We also obtained and reviewed the agency’s recent plan for improving 

retirement services. We performed our work in support of this testimony 

during January 2012. All work on which this testimony is based was 

conducted in accordance with generally accepted government auditing 

standards.

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 

 

1

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). 

 

Background
 

Page 2 GAO-12-430T OPM Retirement Modernization 

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.2 The agency’s March 2008 

analysis of federal employment retirement data estimates that nearly 1 

million active federal employees will be eligible to retire and almost 

600,000 will most likely retire by 2016.3

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).

 

2

OPM, Fiscal Year 2010 Annual Performance Report (January 2011).

3

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

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

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.

Federal Employee 

Retirement Application 

Processing Is Complex
 

Page 3 GAO-12-430T OPM Retirement Modernization 

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-12-430T OPM Retirement Modernization 

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

The agency recently reported that the average time to process a new 

retirement claim is 156 days. According to the Deputy Associate Director 

for the Center of Retirement and Insurance Services, about 200

employees are directly involved in processing the approximately 100,000 

retirement applications OPM receives annually. 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-12-430T OPM Retirement Modernization 

• 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 that 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-12-430T OPM Retirement Modernization 

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 the retirement 

process, to include 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 have been 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. 

Among others, these capabilities include project management, risk 

management, organizational change management, system testing, cost 

estimating, progress reporting, planning, and oversight. However, we 

found that many of the capabilities in these areas were not sufficiently 

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

weaknesses in key management capabilities, such as 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 

 

7

GAO-05-237. 

IT Management 

Weaknesses Have 

Contributed to OPM’s 

Unsuccessful 

Retirement 

Modernization Efforts
 

Page 7 GAO-12-430T OPM Retirement Modernization 

and controlled in comparison to planned objectives. Although OPM 

had defined major retirement modernization project components, it 

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 retirement modernization 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. Without 

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, confusion about user roles and 

responsibilities could have hindered effective implementation of new 

retirement systems.

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.
 

Page 8 GAO-12-430T OPM Retirement Modernization 

We subsequently reported on OPM’s retirement modernization again in 

January 2008, as the agency was on the verge of deploying a new 

automated retirement processing system.8

• 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 in sequence. The agency identified a lack of 

testing resources, including the availability of subject matter experts, 

and the need for further system development, as contributing 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.

We noted weaknesses in 

additional key management capabilities, including system testing, cost 

estimating, and progress reporting.

• Cost estimating represents the identification of individual project cost 

elements, using established methods and valid data to estimate future 

costs. The establishment of 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, the estimate was not supported by the 

documentation that is fundamental to a reliable cost estimate. Without 

a reliable cost estimate, OPM did not have a sound basis for 

formulating retirement modernization budgets or for developing the 

cost baseline that is necessary for measuring and predicting project 

performance.

 

8

GAO-08-345. 
 

Page 9 GAO-12-430T OPM Retirement Modernization 

• 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 provided a favorable view of project performance over time 

because the variances indicated 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., subject to frequent changes). This EVM approach in effect 

ensured that material variances from planned project performance 

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

reliably reported.

We recommended that the Director of OPM address these deficiencies 

by, among other things, conducting effective system tests prior to system 

deployment, in addition to improving program cost estimation and 

progress reporting. In response to our report, OPM stated that it 

concurred with our recommendations and stated that it 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

• Despite agreeing with our January 2008 recommendation that OPM 

develop a revised retirement modernization cost estimate, the agency 

had not completed initial steps for developing a new cost estimate by 

Specifically, we 

noted that significant weaknesses continued to exist in three key 

management areas that we had previously identified—cost estimating, 

progress reporting, and testing—while also noting two additional 

weaknesses related to planning and oversight.

 

9

GAO-09-529. 
 

Page 10 GAO-12-430T OPM Retirement Modernization 

the time we reported again in April 2009. At that time, 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.

• Although it agreed with our January 2008 recommendation to 

establish a basis for effective EVM, OPM had not completed key 

steps as of the time of our April 2009 report. Specifically, despite 

planning to begin reporting on the retirement project’s progress using 

EVM, the agency was not prepared to do so because initial steps, 

including the development of a reliable cost estimate and the 

validation of a baseline, had not been completed. Engaging in EVM 

reporting without first performing these fundamental 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 
 

Page 11 GAO-12-430T OPM Retirement Modernization 

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

and used a plan that could guide its efforts, it would not be properly 

positioned to move forward 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 determining appropriate actions when investments 

encounter challenges. Despite meeting regularly and being provided 

with information that indicated problems with the retirement 

modernization, the board did not ensure that retirement modernization 

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

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

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

described problems the retirement modernization program was facing, 

such as the lack of an integrated master schedule and earned value 

data that did not reflect the “reality or current status” of the program. 

However, meeting minutes indicated that no discussion or action was 

taken to address these problems. According to a member of the 

board, OPM guidance regarding how the board is to communicate 

recommendations and needed corrective actions for investments it is 

responsible for overseeing had not been established. Without a fully 

functioning oversight body, OPM could not monitor the retirement 

modernization and make the 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.
 

Page 12 GAO-12-430T OPM Retirement Modernization 

In mid-January 2012, OPM released a new plan that describes the 

agency’s intention to improve retirement processing through actions that 

include

• 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; and

• working with other agencies to improve the accuracy and 

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

processing.

Additionally, OPM’s new plan identifies existing and planned IT 

improvements to support the retirement process. Recognizing that its 

previous, large-scale efforts to automate the retirement process have 

failed, the agency characterizes its new plan as representing partial, 

progressive IT improvements. These efforts include

• providing retirees with the capability to access and update their 

accounts to change addresses, banking information, and tax 

exemptions and

• planning to automate retirement applications and to automatically 

collect retirement data from agencies’ payroll processing centers.

Under this approach, OPM expects to eliminate the agency’s retirement 

processing backlog within 18 months and to accurately process 90 

percent of its cases within 60 days. However, this goal represents a 

substantial reduction from the agency’s fiscal year 2009 retirement 

modernization goal to accurately process 99 percent of cases within 30 

days. Moreover, the plan does not describe whether or how the agency 

intends to modify or decommission the over 80 legacy systems that 

support retirement processing.

In summary, despite OPM’s 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 have been 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, 

OPM Has a New Plan 

to Improve 

Retirement 

Processing
 

Page 13 GAO-12-430T OPM Retirement Modernization 

cost estimating, system testing, progress reporting, planning, and 

oversight. Although the agency is now considering modest, incremental 

efforts to improve retirement processing, the development and 

institutionalization of the aforementioned management capabilities remain 

important to OPM’s success in improving the delivery of retirement 

services. 

Mr. Chairman, this concludes my statement today. I would be pleased to 

answer any questions that you or other members of the Subcommittee 

may have. 

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; Barbarol J. James; Lee A. McCracken; Teresa M. Neven; and 

Robert L. Williams, Jr. 

Contact and 

Acknowledgments 

(310984)
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