Federal employees looking to retire can breathe a sigh of relief as the Office of Personnel Management (OPM) retirement backlog just hit one of the lowest levels since 2017. As of November 2023, the number of pending retirement claims stands at 15,826, a significant decrease from its peak in 2020. This positive development is attributed to several factors, including OPM’s efforts to streamline the retirement process and implement digital solutions.

However, despite the progress made, the backlog still impacts Federal employees in various ways. The monthly average processing time in days is now at 66, with some cases taking longer than 119 days. This delay can cause financial stress and uncertainty for retirees waiting to receive their benefits.

Let’s delve deeper into the current state of the retirement system and explore the key changes implemented since 2017.

What is the Current Status of the Federal Retirement Backlog in 2023?

The Current Backlog of Retirement Claims is Near Its Lowest Level

• • • Number of Pending Claims: The current backlog of 15,826 claims represents a significant decrease compared to previous years. In October 2022, the number of days is at 25,227 claims.

Current Monthly Average Processing Time of Retirement Applications

• • • Improvements: OPM has managed to reduce the average processing time from 93 days in January 2023 to 66 days in November. For an overview of what to expect during this waiting period, explore our FERS Retirement Quick Guide.

What are the key changes and developments in the OPM retirement system since 2017?

• OPM Reforms and their Impact: Since 2017, OPM has implemented several reforms aimed at improving the retirement process. These reforms included hiring additional staff, expanding training programs, and launching digital initiatives.
• Improvements in Handling Pending Claims: OPM has made strides in reducing the backlog by prioritizing older claims and implementing new procedures for handling incomplete applications.
• Pilot of the Digital Retirement System: The OPM Retirement Services and the Office of the Chief Information Officer’s Retirement Services Information Technology Program Management Office (OCIO/RSITPMO) is piloting an Online Retirement Application. 

Challenges faced by federal employees due to the OPM backlog

• Longer Interim Payments: The increase in employees retiring at the end of the year will double the number of claims. The result will be longer processing time and increase the number of months of interim payments. 
• Paying for Taxes and Benefits Out of Pocket: While Federal taxes are withheld, State & Local taxes are not. Moreover, if you have been paying FLTCIP (Federal Long Term Care Insurance) through payroll deductions, you must pay for it out of pocket instead. FLTCIP premium cannot be deducted from interim payments.
• Alternative to Fulfilling the Income Gap: Review your budget and have excess funds in bank savings or money market accounts. You should also build up a healthy emergency fund to prepare for lower-income months.

Learn More:

Maximize Your FERS Pension & Retirement Benefits – Receive a Detailed Federal Benefits Report

Newly Retired FERS? Do You Receive a COLA in the First Year?

Maximizing Retirement Benefits: A Comprehensive Guide to FERS Special Retirement Supplement