Retirement Application Backlog Exceeds 50,000
In December, the number of retirement applications pending with the Office of Personnel Management (OPM) surpassed 50,000. This increase is attributed to the agency receiving about 3,400 more applications than it could process, all while the average processing time remained fairly consistent.
Last month, the OPM received around 3,200 insurance claims, marking a decrease of roughly 10,000 compared to November and about 7,000 from October. Before reaching OPM, applications need to go through the hiring company’s Human Resources and Payroll Office, which can take anywhere from one to over four weeks.
Interestingly, operating profit margins surged in October and November, reflecting patterns not usually observed until the year kicks off. This spike seems to correlate with employees who left in the final days of their retirement grace periods, which generally conclude on September 30 after the fiscal year ends, though some were extended into the following calendar year.
The recent government shutdown, which lasted from October 1 to November 12, also slowed down processing across various agencies. Once the shutdown concluded, OPM urged agencies to expedite the processing of late applications so that pension payments could start promptly.
There’s usually a notable uptick in employees retiring around the new year, often to maximize the payout of unused leave. This trend typically appears in OPM’s application statistics for January and February. However, this year’s figures might be affected by those who have already retired, which could alter the usual patterns.
In December, the average processing time was 67 days, which is similar to November’s 66 days. However, there was a difference between applications submitted on paper and those sent through the online portal launched in mid-2025, with the latter averaging around 40 days. Unfortunately, some applicants, especially those in the numeric mask category, are facing even longer waits, sometimes exceeding a year.
During the processing phase at OPM, retirees receive interim payments based on estimated monthly benefits, usually around 80% of their final amounts. Any discrepancies will be adjusted during the final payout.
Meanwhile, a new bill (HR-6929) has been proposed in the House that would allow new retirees to withdraw up to $100,000 from their Thrift Savings Plan (TSP) accounts while awaiting application processing. Notably, these withdrawals would be exempt from the standard 10% early withdrawal tax, provided the funds are returned within three years. This bill would also apply to employees who were involuntarily separated.
