[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
ADDRESSING THE BACKLOG IN THE FEDERAL
EMPLOYEE RETIREMENT PROCESS
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON FEDERAL WORKFORCE,
U.S. POSTAL SERVICE AND THE CENSUS
OF THE
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
__________
DECEMBER 10, 2014
__________
Serial No. 113-162
__________
Printed for the use of the Committee on Oversight and Government Reform
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Available via the World Wide Web: http://www.fdsys.gov
http://www.house.gov/reform
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COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM
DARRELL E. ISSA, California, Chairman
JOHN L. MICA, Florida ELIJAH E. CUMMINGS, Maryland,
MICHAEL R. TURNER, Ohio Ranking Minority Member
JOHN J. DUNCAN, JR., Tennessee CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina ELEANOR HOLMES NORTON, District of
JIM JORDAN, Ohio Columbia
JASON CHAFFETZ, Utah JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona GERALD E. CONNOLLY, Virginia
PATRICK MEEHAN, Pennsylvania JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee MATTHEW A. CARTWRIGHT,
TREY GOWDY, South Carolina Pennsylvania
BLAKE FARENTHOLD, Texas TAMMY DUCKWORTH, Illinois
DOC HASTINGS, Washington ROBIN L. KELLY, Illinois
CYNTHIA M. LUMMIS, Wyoming DANNY K. DAVIS, Illinois
ROB WOODALL, Georgia TONY CARDENAS, California
THOMAS MASSIE, Kentucky STEVEN A. HORSFORD, Nevada
DOUG COLLINS, Georgia MICHELLE LUJAN GRISHAM, New Mexico
MARK MEADOWS, North Carolina Vacancy
KERRY L. BENTIVOLIO, Michigan
RON DeSANTIS, Florida
Lawrence J. Brady, Staff Director
John D. Cuaderes, Deputy Staff Director
Stephen Castor, General Counsel
Linda A. Good, Chief Clerk
David Rapallo, Minority Staff Director
Subcommittee on Federal Workforce, U.S. Postal Service and the Census
BLAKE FARENTHOLD, Texas, Chairman
TIM WALBERG, Michigan STEPHEN F. LYNCH, Massachusetts,
TREY GOWDY, South Carolina Ranking Minority Member
DOUG COLLINS, Georgia ELEANOR HOLMES NORTON, District of
RON DeSANTIS, Florida Columbia
WM. LACY CLAY, Missouri
C O N T E N T S
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Page
Hearing held on December 10, 2014................................ 1
WITNESSES
Mr. Kenneth J. Zawodny Jr., Associate Director of Retirement
Services, U.S. Office of Personnel Management
Oral Statement............................................... 4
Written Statement............................................ 6
Ms. Valerie C. Melvin, Director, Information Management and
Technology Resource Issues, U.S. Government Accountability
Office
Oral Statement............................................... 12
Written Statement............................................ 14
Mr. Richard G. Thissen, President, National Active and Retired
Federal Employees Association
Oral Statement............................................... 32
Written Statement............................................ 34
ADDRESSING THE BACKLOG IN THE FEDERAL EMPLOYEE RETIREMENT PROCESS
----------
Wednesday, December 10, 2014
House of Representatives,
Subcommittee on Federal Workforce, U.S. Postal
Service, and the Census,
Committee on Oversight and Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 1:28 p.m., in
room 2154, Rayburn House Office Building, Hon. Blake Farenthold
(chairman of the subcommittee) presiding.
Present: Representatives Farenthold and Lynch.
Staff present: Melissa Beaumont, Assistant Clerk, Jennifer
Hemingway, Deputy Policy Director; James Robertson, Senior
Professional Staff Member; Andrew Shult, Deputy Digital
Director; Peter Warren, Legislative Policy Director; Una Lee,
Minority Counsel; and Juan McCullum, Minority Clerk.
Mr. Farenthold. The committee will come to order.
As is traditional with this committee, before we start out,
we will read the Oversight Committee's mission Statement.
We exist to secure two fundamental principles: First,
Americans have a right to know the money Washington takes from
them is well spent. And, second, Americans deserve an
efficient, effective government that works for them. Our duty
on the Oversight and Government Reform Committee is to protect
those rights.
Our solemn responsibility is to hold government accountable
to taxpayers, because taxpayers have a right to know what they
get from their government. We will work tirelessly in
partnership with citizen watchdogs to deliver the facts to the
American people and bring genuine reform to the Federal
bureaucracy. This is the mission of the Oversight and
Government Reform Committee.
I will now recognize myself for a short opening Statement.
The Office of Personnel Management, OPM, is responsible for
administering the Federal retirement program, which provides
monthly pension checks to 2 1/2 million retired Federal workers
and their survivors.
Counter to private-sector practice, where software and
computer systems apply complex business rules to unique data,
recent annuitants continue to wait their turn in a backlog of
claims before receiving their earned pensions. For individuals
applying for disability retirement and survivors applying for a
lump-sum death benefit, the wait is particularly long.
I remain puzzled why processing a Federal retirement
package remains paper-based while products such as TurboTax
help millions file their complicated tax returns quickly and
electronically.
Since 1987, the OPM has failed at its attempts to bring a
modern approach to how the Federal Government pays Federal
workers and their pensions. In February, the OPM issued a
Strategic Information Technology Plan that discusses a
paperless system, but, in reality, it seems that the system, if
successfully implemented, will maybe result in less paper, not
be paperless.
I applaud the hard work that has been put in in the past
few years under your leadership, Mr. Zawodny. However, I am
troubled by the fact that this reduction, cutting the backlog
in half, relies on hiring additional staff to operate a
patchwork paperwork facility with more than 80-plus legacy
systems.
You all got $2.6 million to improve retirement system
processes but have only spent $800,000. I would like to believe
that that is a result of good, conservative financial
management, but I am afraid that the strategic technology plan
is short on detail, lacks detailed information.
There are implementation schedules that stakeholders,
including the taxpayer, can use to monitor the progress, and I
am looking forward to hearing whether the OPM is ready and
capable of achieving true reform and getting some technology in
there.
I realize and I have said many times that the Federal
Government has trouble computing its way out of a paper bag.
But some of the systems that I have read about and heard about
in the OPM were stuff submitted electronically, printed out,
processed, rescanned. It really seems like there is a great
opportunity for improving efficiency, getting folks the money
that they have earned in a timely fashion, and cutting down on
the expense and time associated with processing.
I will now recognize my ranking member, Mr. Lynch, for his
opening Statement.
Mr. Lynch. Thank you very much, Mr. Chairman, for holding
this hearing to examine the progress made by the Office of
Personnel Management in addressing the backlog and timeliness
in the processing of Federal retirement claims since the last
time we held a hearing on this issue back in 2013.
These last few years have been especially hard on Federal
employees, who have had to endure an onslaught of attacks from
some Members of Congress on their pay, benefits, and due-
process rights. So I am certainly pleased that Chairman
Farenthold and I can agree that Congress and OPM must ensure
that our Federal employees receive timely and accurate pension
payments upon their retirement. Our Nation's dedicated public
servants deserve no less. And the chairman and I are both
sensitive to the financial hardships that a backlog and long
delays in claims processing may cause and have caused some
Federal retirees.
I want to commend OPM for successfully achieving its 2012
strategic plan goal of reducing the retirement claims backlog
to a manageable level, which was earlier 60,000 claims
backlogged in January 2012 to just 14,000 claims at the
beginning of this month.
I know the sequestration made that accomplishment harder to
achieve, and a large increase in retirement application
resulting from the early retirement and buyout offers from the
Postal Service--my sister was one of those retirees. She took
the early out. She didn't help matters either.
While I believe that OPM has made great strides in reducing
its backlog, it still falls short of the goal to process 90
percent of new retirement claims within 60 days, having only
reached 83 percent. I know that progress has been made. As of
last month, it remained at 83 percent, but we've got to work on
that.
And while I think OPM's incremental approach to modernizing
its retirement claims makes sense, it appears that the agency
is making much slower progress on this front as we go forward.
But, again, the effect of the early retirement issue with the
Post Office, that added a historically large amount of claims
at one point, and also the effect of sequestration might have
exacerbated the problem beyond what we see here.
OPM has noted that implementation of many of the IT
initiatives spelled out in OPM's February Strategic Information
Technology Plan are dependent upon the receipt of sufficient
funding. And I would like to explore in this hearing the
support that OPM would need from Congress to ensure that it can
modernize its retirement claim systems. I believe that the
long-term sustainability of OPM's progress will depend heavily
upon a transition from a paper-based, manual process to an
electronic process.
Thank you, Mr. Chairman. I appreciate the opportunity to
revisit the status of OPM's retirement claims processing, and I
look forward to hearing from our panel members.
Thank you. I yield back.
Mr. Farenthold. Thank you very much.
Mr. Farenthold. Members will have 7 days to submit their
opening Statements and extraneous material for the record.
Mr. Farenthold. I would now like to take this opportunity
to welcome our witnesses.
Ken Zawodny serves as the Associate Director of Retirement
Services at the U.S. Office of Personnel Management.
Welcome, sir.
Donna Seymour serves as Chief Information Officer at the
U.S. Office of Personnel Management.
Ms. Seymour, welcome.
Valerie Melvin serves as the Director of Information
Management and Technology Resource Issues at the GAO.
And Richard Thissen serves as president of the National
Active and Retired Federal Employees Association.
Pursuant to committee rules, all witnesses will be sworn in
before they testify.
Would you all please rise and raise your right hand?
Do you solemnly swear or affirm that the testimony you're
about to give this committee will be the truth, the whole
truth, and nothing but the truth?
Let the record reflect that all witnesses answered in the
affirmative.
Please have a seat.
We do have votes scheduled to come up. I would like to get
through as much of this as we can. We may get it finished
before votes if the House runs typically behind schedule, as it
normally does. If not, we may have to leave for votes and then
come back.
But in order to facilitate that, let's make sure we've got
some time for discussion. We will follow the 5-minute rule, let
you all give your 5-minute summary of your written testimony,
and then we'll then proceed to questions.
So we'll get started with Mr. Zawodny.
WITNESS STATEMENTS
STATEMENT OF KENNETH J. ZAWODNY, JR.
Mr. Zawodny. Thank you. Good afternoon, Chairman
Farenthold, Ranking Member Lynch, and members of the
subcommittee. Today I would like to----
Mr. Farenthold. Can you come a little closer to the
microphone? You've kind of got to get up really close to be
heard.
Mr. Zawodny. Today I would like to discuss the progress of
OPM in reducing the inventory of the Federal retirement claims
as well as further automating the claims process.
OPM is responsible for processing over 120,000 retirement
applications a year from all 3 branches of the government and
dozens of independent agencies. Aside from processing new
incoming retirements, OPM also handles post-retirement human-
resource functions for 2.5 million Federal annuitants,
survivors, and their family members.
In January 2012, OPM released and began implementation of a
retirement strategic plan to reduce the inventory of retirement
claims, and we remain on track and focused on the goal of
adjudicating 90 percent of those claims within 60 days. Today
the retirement claims inventory is down to about 9,500 cases
from January--from February 2014. We are now processing 83.4
percent of those claims in under 60 days.
Director Archuleta is committed to improving retirement
services at OPM. There are three areas targeted for reform:
process, customer service, and IT solutions.
The process team is focused on identifying opportunities to
gain efficiency in the processes pertaining to the post-
adjudicative workload. Process improvements will lead to more
timely actions and a reduction in the potential for improper
payments. We have mapped out and evaluated current processes,
and we review the data collected in order to identify
improvement opportunities.
Additionally, the customer service team is studying current
processes and customer behavior. The team has made multiple
visits to different RS facilities and conducted numerous
interviews with current and future retirees. Based on the
research, we are focusing our attention on OPM's online
services. Interview results show that customers who utilize
retirement services' online services are very satisfied with
those particular services and activities. The key is to drive
more people to the online services and to further improve those
services and experiences for the customers.
We also continue to review and improve our call center
support. Recent statistics show that the average speed to
answer calls for the last quarter of Fiscal Year 2014 was
improved by 30 percent. Our call-handling volume has increased
to 41 percent, and we have been able to reduce the amount of
busy signals by 91 percent.
We have also reached out to customer service agencies, like
the Social Security and Department of Defense, who have similar
annuitant populations to exchange information and ideas on how
to better serve all of our customers.
Fulfilling a promise she made during her confirmation
hearing, Director Archuleta produced a strategic IT plan for
OPM within 100 days of becoming the Director. In accordance
with this plan, our goal is to deliver iterative capability
that will yield near-term results and can be built upon over
time as we continue to work toward a full automation solution.
We are currently focused on procuring a case management system
to track business workflows, which increase transparency and
efficiencies. This would create the foundation for a fully
automated system of the future.
In Fiscal Year 2015, we plan to release a solicitation for
award of a case management system and begin configuration of
that tool. Our effort will include an online retirement
application that will help agencies ensure they submit a
completed retirement application thoroughly and make
information more accessible to personnel planning for their
retirement.
Currently, we will complete a pilot project with payroll
service providers for accepting payroll data from shared
service centers using a standardized data format. Throughout
2015 and 2016, we will automate further functions currently
performed by the mainframe, such as annuity calculations and
routines to send payment information to the Treasury.
Transitioning from the mainframe to a distributed computing
environment will save money and increase our ability to make
changes to the system in a timely and efficient manner. OPM has
made significant progress in reducing retirement claims
inventory and modernizing our retirement process. We expect to
continue this process; however, we understand that challenges
do remain.
Thank you for the opportunity to testify today, and I look
forward to answering any questions you may have.
Mr. Farenthold. Thank you very much.
[Prepared Statement of Mr. Zawodny and Ms. Seymour
follows:]
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Mr. Farenthold. Now, Ms. Seymour, was your Statement
included with Mr. Zawodny, or do you have some additional--
anything additional to add?
Ms. Seymour. Mine was included. Thank you.
Mr. Farenthold. Thank you.
Ms. Melvin, you are up.
STATEMENT OF VALERIE C. MELVIN
Ms. Melvin. Good afternoon, Chairman Farenthold, Ranking
Member Lynch, and members of the subcommittee. Thank you for
inviting me to testify on OPM's system for processing Federal
employee retirement benefits.
As we all know, OPM has a critical mission to serve current
and retired Federal employees, and information technology is
integral to this responsibility.
As agreed with your staff, my testimony today summarizes
findings that we have previously reported on OPM's efforts and
challenges to modernize systems supporting the retirement
process and also briefly speaks to its current plans for
acquiring new technology. In addition, based on other work that
we have undertaken, I will briefly highlight key IT acquisition
success factors that, based on selected agencies' experiences,
have proven helpful in carrying out IT acquisitions.
In three reports that we have previously issued, we noted
that OPM's attempts to modernize its systems were hindered in
large measure by ineffective IT planning, management, and
execution. Weak project management, to include ineffective
system testing, the absence of a process to identify and
mitigate project risks, and the lack of a fully functioning
oversight body to monitor the modernization projects were among
a number of factors that contributed to various stops and
starts since 1987 and then to the agency's termination of the
retirement modernization program in February 2011.
In January 2012, the agency released a plan describing
targeted incremental steps that would include making IT
improvements to automate retirement application processing. It
Stated a goal, as you have already mentioned, of processing 90
percent of new claims within 60 days by July 2013 but later
extended the date to July 2014.
More recently, OPM has indicated that it is focused on
acquiring a case management system and ultimately transitioning
to a paperless system that will authorize accurate retirement
benefits on the day they are due. It also plans other
initiatives to incrementally improve retirement processing. We
have not yet had an opportunity to closely examine these
planned initiatives.
Nonetheless, while it is making these plans and has
reported progress toward its processing goal, OPM's
modernization success will depend on having a disciplined and
effective approach to managing IT investments, one that, among
other things, enables the agency to clearly describe how it
intends to carry out its modernization projects, to include the
projected timeframes and financial and other resources needed
to accomplish the modernization and definite measures of its
progress toward doing so.
In other work, we have reported on common factors critical
to successful IT investment acquisitions that were undertaken
by selected agencies. The agencies identified nine factors
helpful to their achieving cost, schedule, scope, and
performance goals. These included active engagement of program
stakeholders throughout the acquisition process and having
program staff with the necessary knowledge and skills regarding
acquisition and procurement processes, contract monitoring, and
other areas of program management.
As OPM moves forward with its case management and other
planned initiatives, applying these critical IT acquisition
success factors, in conjunction with the industry and
government best practices that we have stressed, presents
opportunities for the agency to engage in more effective
management of its investments. And, in doing so, the agency may
better position itself to avoid mistakes of the past and
overcome a long history of unsuccessful attempts to modernize
the retirement system.
This concludes my oral Statement, and I would be pleased to
respond to your questions.
Mr. Farenthold. Thank you very much.
[Prepared Statement of Ms. Melvin follows:]
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Mr. Farenthold. Mr. Thissen? And you are going to need to
move that microphone right out in front of your mouth, as well.
Mr. Thissen. OK. Is this good?
Mr. Farenthold. Perfect.
STATEMENT OF RICHARD G. THISSEN
Mr. Thissen. Good afternoon, and thank you for inviting me
to testify.
Over the last several years, Congress recognized there were
issues with the processing of Federal retirement claims and
held hearings drawing attention to the problem. As president of
the association representing those directly affected, I thank
the committee for continuing to address this issue.
OPM developed a strategic plan to improve retirement claims
processing, implemented the plan as intended, and it has
worked. The inventory of pending retirement claims is now
roughly 14,000, which is in line with projections. OPM set a
goal of processing 90 percent of the claims within 60 days. At
83 percent in November, OPM is not meeting that goal but is
coming close. However, 200 claims are over 180 days old. While
this number is decreasing, over 6 months is too long.
In advance of this hearing, we asked NARFE members for
feedback on their experience with the retirement claims
procedure, specifically from those who retired within the last
2 years. Contrary to the avalanche of complaints we heard 3
years ago, the responses from hundreds of NARFE members were
overwhelmingly positive. Nearly 75 percent of the responses we
received were favorable and praised the customer service they
received from OPM.
In most cases, they received their full annuity check--they
reported their full annuity check came 3 to 4 months following
their separation from service. A large number of those who
reported quick processing noted they received timely
information and assistance from their agencies. Proper due
diligence on the part of the employee prior to retiring, such
as attendance at preretirement seminars, also contributed.
Unfortunately, the responses we received from members who
were not satisfied indicated their claims had been in the
process anywhere from 6 months to more than 2 years. These
individuals, not surprisingly, are very unhappy and tell
lengthy stories critical of OPM.
While OPM reports that the average call wait time is 10
minutes, NARFE members still report higher wait times and an
inability to get through altogether.
Overall, things have greatly improved, but there is still
room for further improvement.
While OPM bears the responsibility for processing the
claims, a Federal employee's transition into retirement starts
with the employing agency. Unfortunately, the governmentwide
error rates for retirement submissions remain unacceptable.
Although publishing the results has led to pressure on agencies
to improve, there was no significant improvement from 2012 to
2014. Agencies should be performing better. Reducing the error
rate would improve processing at OPM, especially as it bears
the brunt of retirees' frustration with delayed claims.
OPM must work to enter the electronic age and eventually
end the process of paper records being physically driven up and
down the east coast. We realize this is no easy feat. The
process of transitioning into retirement varies too widely
among employing agencies. A standardized process and use of
electronic records would go far in ensuring the backlog will
become a distant memory. OPM's IT strategic plan aims to do
just that.
While incremental process on these initiatives is being
made, the timeline for completion and how OPM plans to be held
accountable for keeping on schedule is unclear. It is also
unclear how funding for these new initiatives will be obtained,
particularly during these days of sequestration.
In Fiscal Year 2014, OPM received $2.6 million intended to
be directed toward modernizing the retirement processing
system. This money came directly from the Civil Servant
Retirement and Disability Trust Fund, money that Federal
employees have contributed their entire careers in return for
retirement stability. These funds should not be used lightly or
taken for granted. It is unclear how this money was spent, and,
as such, OPM should provide additional details regarding this
plan.
In the future and consistent with past practice, we urge
that financing for IT modernization come from the general fund
and not the trust fund. We strongly support efforts by OPM to
modernize its retirement services to improve efficiency and
better serve the Federal retirees. However, we remain skeptical
of drawing additional resources from the trust fund simply
because Congress is unwilling to provide adequate financing.
Thank you again for providing me the opportunity to share
NARFE's views. I am happy to answer any questions you may have.
Mr. Farenthold. Thank you very much.
[prepared Statement of Mr. Thissen follows:]
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Mr. Farenthold. And we will get under way with questions. I
appreciate everybody staying within their time limit.
Mr. Zawodny, at our last hearing, you said that by July
2013 OPM would have been able to process 90 percent of its
cases within 60 days. You are moving in the right direction,
but we are still short of the goal, with 83.4 percent of new
retirement claims now processed in 60 days.
Why haven't we gotten to where we need to be?
Mr. Zawodny. Well, thank you, Mr. Farenthold.
The truth of the matter is that we have made great progress
in reducing that inventory down to a manageable level. And
while that near 84 percent of the cases are being done in under
60 days and that average time of being completed is roughly 36
days, there are sill some older cases that we are trying to
work through.
The one thing that we did not quite understand when we had
those 60,000 cases that Mr. Lynch mentioned was the complexity
of some of those cases that would be processed. As we have
gotten our inventory down to a manageable steady State, we now
understand more the complexity of the cases and what is needed
with regard to missing information, such as service credit or
pay information, that is needed to finalize the case.
And as we have worked better to understand that, we are
able to drive up the amount of cases that we process in under
60 days, and we'll continue to do so.
Mr. Farenthold. Well, we've got an issue, though, with the
number of workers eligible to retire. It suggests a potential
for an upswing in pending claims in the coming years. How are
you all preparing for this challenge?
Mr. Zawodny. Just as we've prepared for all the other
challenges regarding processing retirement. We continue to
replace individuals who have retired or left the agency. We've
cross-trained individuals to ensure that they understand
different disciplines of the work to be conducted so that when
we have a surge in one area we can move additional resources in
there to try to drive that workload down.
The other thing that we do is work closely with the
agencies to try to improve their processing of the cases on
their end, to educate employees better on their retirement
applications so that when they come to us they can be fully
worked as quickly as possible.
Mr. Farenthold. All right.
Then, also, while there has been some progress--and I
applaud that--some Federal workers continue to wait 6 months or
longer for their pensions. OPM's backlog of pending disability,
retirement, and lump-sum death benefit determinations is also
of concern.
It is my understanding you all have 29 staff assigned to
lump-sum benefit claims and 66 assigned to disability. Is this
enough?
Mr. Zawodny. The lump-sum payments are averaging about 140
days.
But we need to understand exactly what that lump-sum
payment represents. It represents the amount of days that the
annuitant survived in a particular month. For instance, if the
annuitant passed away on the 5th of the month, they are
entitled to 5 days of pay for that month.
Mr. Farenthold. Right.
Mr. Zawodny. The lump sum represents that 5 days of pay.
When we get notified of the death of an annuitant, we
immediately process the application for the death insurance
payment, as well as getting the survivors into survivor pay so
that they can continue their monthly payment as allotted by the
survivor benefits.
The final thing we do is solidify and finalize the lump-sum
payment, which sometimes can be very little or up to a month's
worth of pay.
We continue to work in that area, and that goes back to
some of the cross-training that we have done to move resources
into those areas that need to be put higher attention to.
Mr. Farenthold. Great.
Let me go to Ms. Seymour.
You are kind of the tech expert here, I guess. We're moving
toward a paperless system. And, you know, there's a distinction
between less paper and no paper at all, being paperless. Is a
true paperless system doable, where you're almost entirely
electronic? And would it help?
Ms. Seymour. Anytime that we can eliminate paper, it helps
move the process faster and makes the process more accurate. We
are working with the retirement services business unit to
understand where we can eliminate paper and in compliance with
the rules and regulations that they use for processing
retirement.
There are some opportunities and there will be some
challenges as we move through that process. So we want to make
sure that we have targeted the opportunities first that we can
eliminate paper soonest in that process.
Mr. Farenthold. And I would assume you're taking an
approach to this--obviously, you're going to have the
exceptional cases where somebody has bounced around to a dozen
Federal agencies over their career. But a veteran who goes to
work for the Postal Service when they come out of the service
and serve there till they retire is not uncommon.
I mean, are we focusing on the easy ones first? Or are we
getting bogged down trying to create a system that will handle
all cases rather than, you know, starting with the easy ones
and growing it?
Ms. Seymour. Thank you, sir. I'm going to let Mr. Zawodny
talk to his business priorities.
Mr. Farenthold. OK.
Mr. Zawodny. In the particular case of that postal employee
you mentioned, the Postal Service and other agencies that use
part-time or seasonal help add a complication when it comes to
the figuring of the retirement claim.
But let's say that same employee you mentioned did do
service, served the country, and then came to work as a civil
servant, stayed with that same agency for their entire career.
That particular case could be considered a simple case.
The problem becomes, quite often, that earlier in their
career is, if service credit or service time was unaccounted
for or mismanaged or not properly documented, that's where that
missing service comes in. So, quite often, those older cases
that you mentioned earlier that might take 6 months or 9
months, those people waiting, it's near every time----
Mr. Farenthold. Well, you ought to be able to get----
Mr. Zawodny [continuing]. We're waiting for----
Mr. Farenthold. You ought to be able to come up with a
business process where--you've got to have the simple ones and
the hard ones. Is it not doable to----
Mr. Zawodny. It is.
Mr. Farenthold [continuing]. Automate the simples ones
first and then, you know, start growing it as you learn more?
I talked to the programmers of the Google self-driving car.
They've identified tens of thousands of unique driving
situations. They start with the obvious ones, and then when
they encounter a new one they grow the system. Is that the
approach?
Mr. Zawodny. That's absolutely the approach. And that's the
approach that we've taken to drive the inventory down to where
it is today. We've been able to segment out those less
complicated cases and put teams of forces on those.
And as we move into the automation of that particular
process, we'll be able to automate those cases. And those
exceptions where we're missing information or data to finalize
a case will have to be----
Mr. Farenthold. OK. Well, I've gone way over. We'll let Mr.
Lynch get his questions in, and I've got a couple more. We'll
do a second round after my colleague finishes here.
Mr. Lynch. Thanks, Mr. Chairman.
Let's just followup on the chairman's thinking there a
little bit. Is there a uniformity to these cases that are more
pernicious and more difficult to resolve? Are we talking about,
as the chairman suggested, someone who's got multiple
jurisdictions of service?
Mr. Zawodny. Yes, sir. There are some cases where an
individual may have worked at one agency their entire career
and then those individuals that have gone from agency to agency
to agency.
Mr. Lynch. Yes. So, I do want to try to get through a
number of questions, but what happens to a person--I mean, are
these the cases that are going on for 6 months?
Mr. Thissen, what happens to an employee that has to wait 6
months? Are they in limbo? Are they hanging? Do they have no
income if they file for their retirement and they're waiting 6
months?
Mr. Thissen. They get a temporary payment, but----
Mr. Farenthold. Your mic is not on.
Mr. Thissen. All right. Is it on now?
Mr. Farenthold. Yes.
Mr. Thissen. OK.
They get a temporary payment. But, obviously, that's not
the optimum, and it does create hardship for some of the
members. It sure does.
Mr. Lynch. Yes. OK.
Ms. Melvin, you did mention that we have, in the current
system, OPM uses I believe you said 500 different procedures,
laws, and regulations and 80 information systems that have I
believe you said 400 different interfaces to process retirement
applications.
Ms. Melvin. It's approximately that.
Mr. Lynch. Isn't that the root of the problem here? Is that
what we're talking about?
Ms. Melvin. Well, I think it certainly points to a complex
process and a complex system that they have to try to address.
And it is part of the problem. From our standpoint, it doesn't
make it impossible to address it, though.
What we are looking for, from the standpoint of what OPM
does, is to have clearly defined plans and a very detailed
tactical approach to addressing these kinds of complexities. We
mentioned priorities. There are priorities in terms of the
requirements that have to be defined and how they're going to
work through developing or acquiring the particular systems and
how those systems would interface.
So a number of factors that go into addressing it. Complex,
yes, but not impossible.
Mr. Lynch. Yes. Well, thank you.
It just seems to me that it doesn't need to be this
difficult. And there might actually be some savings here if we
move away from the paper system to one that is, you know,
automated. I'm a little surprised it's taken this long.
You mentioned also in your remarks there was a lack of
oversight in terms of making this transition. Who do you think
should be--should we bring somebody in from the outside in
terms of making sure that this transition happens? Or how would
the oversight take place? Obviously, it's more difficult
without having somebody overseeing this.
Ms. Melvin. When we did our work and reported on the
oversight issue, one of the things that we looked at were their
investment review boards. And that would be the critical
players in terms of a chief information officer, chief
financial officer, whomever else would be involved, the key
officials from the business side who make the decisions on what
the investments are going to be, how they prioritize those. We
continue to believe that that's necessary, in terms of having
those key players.
Ms. Seymour is the Chief Information Officer at OPM, and we
would look to her as the first source of oversight relative to
what has to be done in terms of delivering the technology
solutions. That being said, Mr. Zawodny, in his role, you know,
from the business side, is also critical.
So the proper positions are there in terms of oversight.
It's a matter of making sure that when those boards are getting
together that they, in fact, are performing. When we looked at
what was being done back some years ago, the board was in
place; there was an oversight board. However, it had not been
responding to the types of issues that--the problems and
concerns that were being brought to it.
So it has to be a functional board. It has to have
functional oversight capability. And that's what we would look
for going forward.
Mr. Lynch. Yes. Thank you.
I'm just concerned--as the chairman has noted, the concern
up here is whether we've got all the low-hanging fruit, and so
we've eliminated--I mean, you deserve to be commended. You've
eliminated 75 percent of your backlog. The problem here is,
though, you've got this significant lingering backlog. And if
people keep retiring at the rate that they have been, we've got
a--you know, we've got a possible resurgence in the size of the
backlog, and we're back to square one at some point.
So now is the time to try to--you know, to try to change
over the system. I know you all have tremendous responsibility
already. You have made commendable progress. I'm not
criticizing. I'm just trying to see what framework gets us to
where we need to be. We need to have sustainable progress here.
We can't retrench every so often; we need to fix the system.
And let me ask: How much of this is money, in terms of
funding and--you know, we don't like the idea of just throwing
money at a problem and expecting it to go away. That has proven
to be a failure in the past. You've really got to spend your
money wisely and make those important changes.
But, Mr. Zawodny, talk to me about the resources that you
might need.
Mr. Zawodny. Well, Mr. Lynch, as Stated earlier, we did
receive $2.6 million in 2014. And in the present budget for
2015, we request an additional $2.4 million.
Mr. Lynch. Is that--Mr. Thissen was complaining about you
raiding the disability trust fund. Is that where you got some
of this money?
Mr. Zawodny. That's correct, sir. The law----
Mr. Lynch. We can't keep doing that, though, can we?
Mr. Zawodny. I'm sorry?
Mr. Lynch. We can't keep doing that, right?
Mr. Zawodny. Well, the law authorizes us to use the trust
fund for operating expenses for retirement services. It's not--
Mr. Lynch. Yes.
Mr. Zawodny [continuing]. An appropriations.
Mr. Lynch. All right. I'm just nervous about having a
resulting unfunded liability, you know, in that fund or
inadequate resources. Sort of robbing Peter to pay Paul. I'd
rather not get into that situation.
But go ahead. I interrupted you.
Mr. Zawodny. And with the current funding that we have, we
believe that that's going to be a sustainable amount to get us
started on the right path.
We have a number of initiatives. Like I mentioned, we're
going to be releasing an RFP very shortly to solicit vendors to
provide us an estimate on what it's going to cost to have a
case management service started for us with a platform and
actual case management system. Only then will we really
understand exactly what the true cost is going to be and then
be able to come back and properly budget for that in out-years.
Mr. Lynch. Yes. OK.
All right. That's all I have, Mr. Chairman. I yield back.
Mr. Farenthold. You hit a couple of the questions I had.
I've basically just got a couple more questions.
Ms. Melvin, after its last major initiative resulted in
termination of a $290 million contract, OPM switched to an
incremental approach for its modernization.
Have we addressed the management issues, do you think, that
you've identified in your previous reports and your testimony
today? Are we at a point where you think they can do it? And do
you have any feeling as to--and I guess it's probably more of a
question for Mr. Zawodny after you answer, but is there the
commitment to do it?
Ms. Melvin. We hope there is, but we have not been in to
look at their initiatives and what they're undertaking at this
point. We would certainly look to Ms. Seymour and Mr. Zawodny
to be primary players in making sure that they can move
forward, and I hope that they are. But we would need to do more
work to really be able to provide an informed response to that.
Mr. Farenthold. All right.
And, then, Mr. Zawodny, I used to be a computer consultant
in my early days, and I actually got into it when I led an
automation process for a law firm that I was working at. That's
what got me interested in technology.
And what I discovered was that, among a lot of the people
who used the technology, be they lawyers or secretaries or
whatever, are so busy in their day-to-day operations that they
don't want to take the time to learn a new system or
participate in a committee or a study to figure out how to
automate and make their job easier.
And, you know, in today's time, most people recognize that
a little bit of time invested in technology typically pays off
very well.
Is there the attitude within your work force, and does it
go all the way up to the top, where there is a willingness to
commit the time and the effort that may in the short term put
you a little bit behind, you're going to have to work a little
bit harder to go to that technology committee meeting, but in
the long run will make your life a whole lot easier?
Mr. Zawodny. The short answer to that is, yes, overwhelming
enthusiasm to become more modern within the entire
organization, from the top all the way down and back up.
We have a number of processes already in place within
retirement services that are an automated process, from the
receipt of initial notification for the individual to retire,
going through the interim pay that we mentioned earlier,
through the calculations piece, and even to a rudimentary type
of case management system we have.
Our folks are attuned to using automation right now and
welcome the opportunity to use the automation and to expand
upon it even further in the future.
Mr. Farenthold. And just one last question to Ms. Seymour.
Mr. Lynch talked about 80-plus legacy systems. I mean, I'm
assuming those are--you know, you've got some old systems that
are probably in Fortran and COBOL and other extinct programming
language on hardware you probably can't get parts for. Would
that be a fair characterization of some of the stuff?
Ms. Seymour. It's fair, yes, sir.
Mr. Farenthold. That's got to be awfully expensive. Would
we not be able to save some money if we moved to a modern
system that's more, if you will, off-the-shelf or, you know,
certainly didn't have to have custom manufactured parts with
vacuum tubes?
Ms. Seymour. We're not--thank you, sir. We're not quite
that antiquated.
But what we are doing is moving from a mainframe
environment, most of these applications. And when we talk about
80 applications, they're small applications that do a very
finite set of functions and, together, form the retirement
services system.
So what we're doing is taking this very incremental
approach, putting in place the case management system first,
and then we're looking at each of those applications to make
sure we understand the complete functionality that they perform
and how we can move them into the modern environment.
That gives us the opportunity for Mr. Zawodny's staff to
experience a little bit of the capabilities----
Mr. Farenthold. Right.
Ms. Seymour [continuing]. Learn a little bit. And then we
give them--you know, we build on that capability over time.
Mr. Farenthold. I'm reminded of a--I took a computer in
when I was doing a law firm to one of the senior partners. He
called me up and said, ``Come get this rat thing out of my
office,'' referring to the mouse. I hope we don't--I hope we
don't have that.
I don't have anything else. Mr. Lynch, did you have
anything you wanted to followup on?
Mr. Lynch. Well, I just want to--thank you, Mr. Chairman.
I would just want to encourage you to try to tighten up
what you need. You know, on this side of the dais, that's what
we want to know--resources, technical assistance, maybe, you
know, a third party to oversee the transition.
I know you're both working very hard, all of you are
working very hard, but sometimes you need sort of an honest
broker here to--when you've got 500 different procedures and
all these laws and regulations, you've got 80 information
systems and 400 different interfaces, sometimes that can be
overwhelming and you've got obvious turf concerns between
departments. If we can have somebody else sort of be the
umbrella group that gets all of these people corralled, you
know, we can make a little bit more progress than we have been.
We're going too slow right now, and that raises some concerns
for me.
So we want to be--we want to be helpful. And, you know, we
just need more input in order to make sure what we're doing is
rowing in the same direction that you all are. Thank you.
I yield back.
Mr. Farenthold. Great. And we made it in time for us to get
out to votes. We're not going to hold you over.
I join with Mr. Lynch in encouraging you to get this job
done, get the process finished and fixed. Our Federal workers
deserve prompt and adequate processing of their retirement
after years of service to this country.
Thank you very much.
We're adjourned.
[Whereupon, at 2:12 p.m., the subcommittee was adjourned.]
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