The agency has a challenging timeline ahead as it transitions to a paperless federal retirement system. The Human Resources Administration is finalizing its modernization project, which has been ongoing for several years.
In guidance issued last week, OPM announced its goal to fully digitalize retirement services for all newly retired federal employees within a month.
“The old system, with its outdated technology and cumbersome processes, has delayed retirements and frustrated employees who have devoted their careers to public service,” said Charles Ezell, acting head of OPM. “By utilizing modern technology and fostering collaboration between agencies, we aim to create a retirement process that is efficient, user-friendly, and meets employee needs.”
According to a press release on Monday, the Trump administration has emphasized its commitment to this initiative, led by the Department of Government Efficiency (DOGE). Ezell mentioned that DOGE has been collaborating with OPM’s retirement services team for several months.
However, it’s important to note that OPM’s efforts to create and test online retirement application systems have been in progress for longer than just a few months. Plans for launching the Online Retirement Application (ORA) date back at least to 2023, as noted in OPM’s justification for the 2024 Congressional Budget. The ORA is described as a “customer portal” allowing retirees, institutions, and payroll providers to submit applications online.
During the Biden administration, OPM also laid out its IT modernization plans for 2022-2026, which included timelines for improving retirement services and other agency projects. These strategic plans have since disappeared from the OPM website, replaced by a message indicating an “unexpected error.”
The current Trump administration aims to finalize the ORA project soon. By June 2, all organizations using the National Financial Center (NFC) or the Interior Business Center (IBC) for payroll and HR services must submit retirement documents electronically. OPM stated it would create an alternative system for those institutions not using NFC or IBC.
“OPM is directly working with payroll providers to ensure that retirement services will soon have access to the ORA,” Ezell added in last week’s guidance.
OPM has also advised agencies using NFC and IBC to start training their HR staff on these changes ahead of the June deadline. Starting July 15, OPM will no longer accept paper submissions. Any paper-based retirement packages will be returned to institutions for electronic resubmission through the ORA.
This update comes amid an increase in federal employees opting for the Voluntary Early Resignation Authority (VERA) and the Deferred Retirement Option Program (DROP), with OPM anticipating a surge in resignation applications. The agency has noted that “we cannot manage the expected doubling of retirement application backlogs with the current quality of service” without modernizing its HR system.
OPM indicated that it has faced a systemic breakdown in its HR, pay, and benefits infrastructure, leading to payroll errors and delayed processing of retirement applications.
OPM Hits Other Federal Retirement Milestones
For decades, efforts to modernize the federal retirement process have been underway at OPM, spanning multiple administrations. Over the last 20 years, there have been several attempts to enhance technology and processes focused on retirement systems, but outcomes have often fallen short.
In 2023, former OPM Chief Information Officer Guy Cavallo sought to shift strategy towards a more incremental approach. He believed previous modernization attempts were unsuccessful due to a “big bang” method.
As part of an IT strategy initiated in the past few years, OPM began introducing chatbots to assist with online retirement applications and address common inquiries regarding federal retirement. Sources familiar with OPM’s modernization efforts have stated that the agency completed its digital retirement pilot in December 2024.
Earlier this year, OPM achieved two significant milestones in its long-term efforts to digitize the retirement process. In February, it announced the processing of federal resignation applications completely online for the first time. Then in April, OPM made public the digital versions of its four federal retirement booklets.
Yet, questions remain about how much the new online application system will truly speed up the retirement processing timeline. While shifting to online applications may reduce document errors, more complex retirement cases typically take longer to resolve. Some retirees have old HR records only available in physical formats, while others might require paper-based processing.
A 2019 report from the Government Accountability Office highlighted that paper applications are just one of several major factors contributing to OPM’s challenges in processing retirements. The report also mentioned chronic understaffing within OPM, especially during peak retirement periods, which further complicates matters.
John Hatton, vice president of policy and programs for the National Active and Retired Federal Employees Association (NARFE), expressed cautious optimism regarding the push toward digitizing federal retirement applications.
“OPM had previously piloted this concept, and I’m glad to hear about the accelerated movement toward electronic retirement applications,” Hatton commented. “If successful, this could alleviate some of the delays federal retirees face in accessing their benefits.”
Still, he noted, “we are not ready to celebrate just yet. We need to see how effectively this new system works in actually reducing processing times and maintaining application accuracy.”
