Challenges in Computation of Retirement Benefits for Federal Employees
Mar 06, 2018 | By: Drew Lessard | Category: Retirement
Computation of federal retirement benefits poses several challenges for retirement specialists, especially those still using outdated software and manual forms. These roadblocks can slow down the process substantially, creating a backlog of work for the HR specialists tasked with supporting retirees and employees preparing for retirement.
To address these challenges, several steps have been taken in the software and processes used, but much more needs to be done to ensure a seamless transition to a more robust system. Combined with the extensive regulations that are specific to federal retirement eligibility and annuities, the process can be complicated, even in standard cases.
Slow Modernization of Internal Systems
The Office of Personnel Management (OPM) relies on legacy software that is, in some cases, decades old. Combined with recent Congressional guidance to encourage financial awareness among the federal workforce and the fact that more than 30 percent of the current federal workforce is eligible for retirement, and there are many gaps in how retirement benefits are handled and what OPM can support with current technology.
Slow Processing and Manual Completion
Another major challenge in the process is the slow processing time both internally at large agencies and at OPM. The same outdated systems that make internal software ineffective for retirement calculations create bottle necks in processing. In 2017, more than 40 percent of all retirement applications took more than the allotted 60 days. Overdue applications took an average of 97 days to complete.
Manual form completion in agencies that do not yet use cloud-based software solutions to streamline the completion of these documents can further slow down the process.
Combine this with the fact that agencies are responsible for providing support for federal employees who are preparing for retirement. This includes assistance with deposits, general counseling, retirement estimates for specific dates, date selection help, and help with the application among many other responsibilities.
Retirement specialists who are dealing with a growing number of federal employees at retirement age, and inefficient, outdated software at OPM, struggle to keep up with the applications being completed.
Redundancy and Inefficiencies in Existing Software
Because internal tools are ineffective, many agencies have turned to outside tools that can support retirement eligibility calculations. These tools, however, are often outdated as well, lacking key modern features and in some cases, still suffering from inefficient user experiences.
One common issue is the need to rekey data when there are errors. Rather than being able to revisit previous entries, information needs to be completely rekeyed, as it would with a paper form. Inaccurate data can also create inaccuracies in these tools’ calculations and are not always indicated by the system. These issues can create errors that are not noticed until much later, significantly slowing processing speed.
Addressing the Challenges in Retirement Benefits Computations
There are several possible solutions to the issues referenced above. Newer cloud-based software is designed to tackle many of these. An eRetirement Wizard can not only reduce the risk of inaccurate data and the need for rekeying in the event of an error but can also streamline the processing speed of all applications.
It is for this reason that EconSys has worked to consistently improve and augment the features in our FedHR Navigator for retirement actions. If you are interested in learning more about FedHR Navigator or would like to read about how the various challenges faced by HR specialists can be addressed, download our newest eBook “Tips for Supporting Retirement Actions in the Federal Government”.