OPM Retirement Services – How Can Digital Modernization Overcome Longstanding Challenges?

Blog Author: Al Himler, former Chief Technology Officer of the U.S. Office of Personnel Management

I left Federal service recently where I held the position of Chief Technology Officer (CTO) of the U.S. Office of Personnel Management (OPM) and have joined IBM as a Master Solutions Architect with the Hybrid Cloud Transformation team.

In my role at OPM, I had the privilege to work with the OPM Retirement Services team. I supported this group to develop a strategy for digitizing their completely paper-based processes. We started with low-hanging fruit including the automation of the retirement application process, the calculation of basic retirement annuities, and with the capability to support digital signatures on a subset of retirement-related documents.

One of the over-riding questions was how to manage the backlog (literally a cave-full) of paper documents in Boyers, PA -- where retirement documents have been stored in accordance with their records retention policy that requires keeping documents for 115 years from the date of the employee’s birth or 30-year after the date of the employee’s death, whichever is sooner (records for VIPs are kept indefinitely). Considering that, in an average year, about 100,000 people retire from Federal service annually, that volume of paper becomes a logistical "ball-and-chain" that must be managed to respond to annuitant needs. How could OPM best do so?

The most insightful answer, from one of my Retirement Services partners, was to focus on the incoming materials as the higher priority and as quickly as possible automate the processes to efficiently handle new paper coming in the door. Sounds deceptively simple, but paper comes in from different directions: people planning to retire, payroll centers, people who have retired, people claiming to be a survivor needing to be verified, and so on. Digitizing all the inputs simultaneously, and on a constrained budget, was a challenge, but we made incremental progress. For example, we were able to automate the process of accepting retirement packages for a single payroll provider and a small handful of agencies. Beyond accelerating the receipt of error-free applications, the project also demonstrated our ability to define digital interfaces with other agencies so that we could receive retirement applications, and the payroll data required for annuity calculations. The plan for the remainder of FY2025 was to add a second payroll provider (there are a total of five) and begin to accept retirement applications from another set of agencies. This project provided the first implementation where Retirement Services digital processing replaced paper processing.

Beyond stopping the flood of incoming paper, there was some thinking about the cave-full of paper records.  Conceptually, OPM would have a digitization capability, but an annuitant's folder would only be digitized if it had to be pulled from storage. The scenario and strategy went like this: If an annuitant or their survivor contacted OPM for information, and that information required that the folder be pulled from storage to respond to the request, then that folder would also be digitized at that time. The idea being that a folder pulled from storage once is more likely to be requested again, and so is more valuable to be digitized than randomly scanning folders. With limited funding however, this approach has been delayed, but the idea again was focused on efficiency.

As OPM moves into FY2026, there will be many challenges related to its digital strategy. First, OPM employees who recently left government will need to receive their payments for accrued paid time-off (PTO). Given the number of employees and higher leave balances carried by senior (SES) employees, this is going to be a large FY2026 budget charge. Next, Retirement Services will need to process all Federal retirees who submitted the applications as part of the recent program supporting early retirement (commonly referred to as the “fork in the road” or Deferred Retirement Program). Like me, those people timed their retirement for some date between 1 October 2025 and 31 December 2025. This will represent a spike from the normal annual 100,000 Federal retirees. Continuing to automate Retirement Services processes to take advantage of "quick hits" in automation will likely slow, as the Retirement Services subject matter experts will need to devote 100% of their attention to processing all the new retirees.

OPM can address this need by continuing to invest in the modernization of Retirement Services.  Utilizing enterprise design thinking can continue to put the users, both annuitant customers and Retirement Services staff, in the center of modernization activities, to create systems that dramatically improve user experience in the retirement application process and OPM’s annuitant support functions.  Artificial Intelligence (AI) capabilities can enable training delivery to Human Resources specialists across government and reduce the time to provide consistent, authoritative answers to Help Desk support requests.  Smart Document (including AI) digitization can dramatically improve OPM’s ability to bring legacy document data online.  Enterprise level governance, through SAFe and Agile practices, can ensure transparency and accountability throughout the modernization.

Through continued focus, OPM’s digital modernization will securely reduce processing times, increase calculation accuracy, and enhance customer experience for annuitants and their survivors.  Additionally, taking advantage of technology innovations, OPM may finally be able to empty the “cave” in Boyers, PA -- strategically and efficiently.