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House Democrat seeking answers from NFC on federal retirement delays

A top Democrat on the House Oversight and Reform Committee is looking for answers from the National Finance Center, which agencies have said is contributing to recent delays in processing federal retirement packages.

Gerry Connolly (D-Va.), chairman of the House Oversight and Reform Government Operations Subcommittee, wrote to the payroll provider’s acting director, Anita Adkins, Wednesday.

Some agencies have warned their employees and recent retirees of longer-than-normal wait times for their interim and first full annuity payments. The agencies said the delays are due, in part, to processing lags at the National Finance Center, one of four major federal payroll providers.

“That delay has placed undue and unanticipated financial concerns on retiring federal workers who have earned timely administration of these benefits. At least three agencies have warned employees of significant delays in retirement processing,” Connolly said, citing previous reporting by Federal News Network.

In a briefing with his staff last month, OPM reported more than 4,000 requests for service records were delayed at the National Finance Center, Connolly said.

One of the more dire agency warnings came from Customs and Border Protection, which told employees they could wait as long as six months for an interim payment and 12 months for a full annuity payment. Usually, employees expect to wait two months and six months, respectively, for their interim and full annuity payments.

Payroll providers like NFC are responsible for calculating an employee’s outstanding leave balances and preparing an “individual retirement record,” which includes details on an employee’s service, salary history and annual retirement contributions.

Then, payroll providers send an employee’s retirement record to the Office of Personnel Management, which begins its own verification process and takes steps to calculate a retiree’s annuity.

It usually takes NFC about 30 days to send completed retirement paperwork to OPM for processing, according to the payroll provider. But CBP said its payroll provider was currently taking anywhere from 60-to-90 days to process and submit retirement paperwork to OPM.

NFC acknowledged it was experiencing delays in processing and sending retirement information to OPM. It pointed to its COVID-19 safety and telework protocols as a reason for the delays and said it should return to a more normal processing timeline by the end of the month.

Connolly acknowledged the pandemic’s role in potential retirement processing delays, but the systems multiple agencies use to process federal retirements are archaic.

“NFC still largely employs a paper-based system, and the information technology NFC uses to process retirement applications is outdated and cumbersome,” he said.

Connolly said he’s looking for more details on the current status of NFC’s backlog, as well as a description of the provider’s current challenges.

He’s also interested in NFC’s short-term plans to address immediate processing delays and a long-term roadmap for automating its systems.

NFC does employ some automation. In a bulletin released last fall, the provider described recent enhancements to its ServiceNow platform, which it’s using to submit packages and manage inquires, but the move from “manual internal procedures to automated procedures” had created a backlog in cases.

A spokesperson for the Agriculture Department, which manages NFC, said the agency will promptly respond to Connolly’s letter. It reiterated that NFC had handled 31,207 retirement cases in 2020, and the majority were processed within 30 days, the spokesperson said.

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