Retirement Claim Processing at OPM: Existing Backlog and Transition to Online System – and One Big Mistake to Avoid when Applying

Pertaining to the federal workforce in general, 2025 has not been a typical year. The number of VERA (voluntary early retirement authority) “early out” offers is much higher than normal. Along with the separate deferred resignation program, and several RIFs (reduction in force) in effect, over 100,000 civilian feds have left their jobs, opting to defer their pension, take refunded contributions, or apply for immediate retirement benefits. The influx of retirement claims last month reflects this reality. Let’s look at the OPM (Office of Personnel Management) backlog, the average time it takes to process an application, and what we now about the new portal for retirement claim submissions. 

OPM Backlog Update: Incoming Retirement Claims Surged Last Month

The biggest influx of income retirement packages to OPM retirement services typically occurs at the start of the year as December 31 is commonly known as one of the best dates to retire from the federal government. In January of 2024, for instance, a tad less than 13,000 were received. The most recent January saw 16,101 incoming FERS and CSRS applications. Historically, other months of the year see around 5000 to 8000 packets incoming packets. This past May was an obvious outlier, seeing 15,048 new federal pension applications. The reason for this is likely the drastic restructuring of federal agencies taking place in 2025. The new online retirement application (ORA) for federal retirement was also announced last month, likely prompting many federal employees to apply for their FERS, CSRS, or CSRS-offset annuity before the upcoming deadline of July 15 – when OPM will stop accepting paper-based retirement claims.

Estimate your FERS annuity with our Federal Retirement Pension Calculator.

Checking In: The New System for Processing Retirement Requests Online

Starting June 2^nd, the ORA was accessible for the first time. Although we will have to wait until next month to see the June data regarding average processing time and whether or not it improved. For the 9,739 applications that were fully processed in May, the average time from submission to approval was 49 days, lowering the year’s average processing time from 53 days to 52. Many are cautiously optimistic following the new system’s rollout, which was achieved by career OPM staffers and employees at the new DOGE (Department of Government Efficiency) organization. However, it is possible only those with more straightforward retirement situations are currently using the new online portal and those with more complex predicaments are still opting to submit via paper-based packets before the upcoming deadline.

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Avoid this Huge Mistake when Retiring from Federal Service

Although it might sound silly at face value, it is 100% true: the biggest mistake any federal worker can make when applying is submitting an application with ANY errors. Yes, the biggest mistake is any mistake. Retirement claims that are error-free take an average of 30 days to complete whereas applications with even one error have an average processing time of 110 days – 80 days more! Before the packet is approved by OPM, federal retirees only receive interim payments that are considerably less than their finalized monthly pension amount. The best way to ensure your application for federal retirement is error-free is to sit down with a financial planner that is an expert when it comes to federal retirement benefits.

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Common Reasons for Delays in Processing 

Several common reasons can lead to delays in processing a federal retirement application. These include incomplete applications, missing documentation, and discrepancies in payroll or retirement records. Additionally, high volumes of new retirement applications can contribute to longer processing times. Federal employees can help mitigate these delays by submitting a complete and accurate application and by responding promptly to any requests for additional information from OPM. Staying proactive and organized throughout the application process can help ensure a timely transition to retirement.

Read the Top 3 FERS Calculation Mistakes to Avoid

Retirement Date, Federal Retirement Application, and Other Information Regarding Retirement Process

The federal retirement application is a comprehensive package that includes several critical components. At its core, the application consists of forms that detail the retiree’s personal information, employment history, and retirement system affiliation, whether it be the Federal Employees Retirement System (FERS) or the Civil Service Retirement System (CSRS). The application also requires the submission of an individual retirement record, which is essential for calculating the annuity. Additionally, federal employees must include information about their life insurance coverage, health benefits, and any survivor annuity elections. 

Forms Required for a Complete Application Package

A complete federal retirement application package includes several essential forms. The primary form is the retirement application form, known as Standard Form 2801 for CSRS employees or Standard Form 3107 for FERS employees. These forms collect detailed information about the retiree’s service history and retirement preferences. Additionally, forms related to life insurance, such as the Federal Employees’ Group Life Insurance (FEGLI) election form, and health benefits, like the Federal Employees Health Benefits (FEHB) enrollment form, are required. Including all necessary forms and ensuring they are filled out correctly is crucial to avoid delays in processing.

Military Service and Retirement Eligibility 

Military service can significantly impact a federal employee’s retirement eligibility. Federal employees who have served in the military may be eligible to receive credit for their military service towards their federal retirement. This credit can enhance their annuity and potentially allow for earlier retirement. However, to receive this credit, employees must make a deposit for their military service time, which is calculated based on their military retired pay. Understanding how military service integrates with federal retirement systems is crucial for maximizing retirement benefits.

Timeline for Processing a Federal Retirement Application

The timeline for processing a federal retirement application can vary depending on several factors, including the completeness of the application and the current workload of OPM. On average, the processing time can range from several weeks to a few months. Federal employees can help expedite the process by ensuring their application is complete and free of errors. Additionally, submitting the application electronically can reduce processing time. OPM provides updates on the status of applications, allowing retirees to track their progress and anticipate when they will begin receiving their retirement benefits.

How to Maintain Health Insurance Coverage After Retiring

Maintaining health insurance coverage into retirement is a critical consideration for federal employees. The Federal Employees Health Benefits (FEHB) program allows eligible retirees to continue their health insurance coverage, provided they have been enrolled in FEHB for at least five years before retirement. Although, the 5 year rule can be waived, allowing several retirees to be eligible to continue their coverage. Retirees can choose to keep their existing health plan or select a new one during the annual open season.