Up next in 10
Summer Retirement Surge: What’s Behind OPM’s Retirement Backlog Spike?
5 views
Aug 7, 2025
Why the OPM Retirement Backlog Exploded This Summer – July 2025 Update Discover the reasons behind the unprecedented surge in federal retirement claims this summer. In this video, we break down: 📊 Key July 2025 stats: claims received, processed, and backlog inventory 📈 Historical trends compared to previous years 🚨 The summer surge: May–June 2025 claims spike 🔍 Factors driving the surge: DRP, VERA, and downsizing efforts 🖥️ OPM’s digital overhaul: Online Retirement Application (ORA) launch Stay informed about the challenges federal employees face during retirement processing, including delays, interim payments, and the impact of digitization. 🔔 Don’t forget to subscribe for monthly updates on OPM retirement trends and insights! 📰 Related Articles What’s Driving the Summer Surge in the OPM Retirement Backlog? https://www.fedsmith.com/2025/08/06/whats-driving-the-summer-surge-in-the-opm-retirement-backlog/ Chapters
View Video Transcript
0:00
The OPM retirement backlog has spiked to
0:02
unusually high levels this summer.
0:05
What's driving that and what are the
0:06
latest figures? Let's take a look. Hey
0:09
there, I'm Ian Smith with fedsmith.com
0:11
and I was going to discuss the OPM
0:14
retirement backlog with you today. OPM
0:16
just released its latest retirement
0:18
processing statistics figures. So to
0:22
start out, the figures for July just
0:25
came out. Um, there were 8,295
0:28
new retirement claims from federal
0:30
employees that came in. OPM processed
0:33
8,485
0:35
of them. And the total inventory, that's
0:38
the outstanding backlog, is now 26,138.
0:43
And that's actually down just a little
0:45
bit from the peak so far this year in
0:48
June, which was 26,328.
0:51
So it's down 72% from the prior month.
0:56
The average processing time in July was
0:58
59 days and that's actually up from 45
1:02
days in June. So processing was a little
1:05
bit slower in July. There was a bit of a
1:09
dip in June, as I said, compared to the
1:12
prior months. A lot of new retirement
1:14
claims came in, but it's a little bit
1:17
more in line with historical figures.
1:19
Um, and I'll explain that now. If you
1:21
look at 2025, July 2025 versus previous
1:25
years, it gives you a little bit of a
1:28
better picture. So, looking at July for
1:31
the last five years,
1:34
this table paints a picture for you.
1:37
Again, there were 8,295 claims that came
1:40
in in 2025.
1:43
And that's a lot, but as you can see,
1:45
it's more in line with historical
1:47
numbers. The only one that was higher
1:49
was in 2022,
1:51
9,487.
1:54
And the processing was quite a bit
1:57
higher compared to the last five years.
1:59
Again, 2022 was an exception. But you
2:02
also can see the backlog was higher in
2:05
2022 than it is now even. Um the
2:09
situation with the backlog this year
2:11
though is that it has shot up quite a
2:13
bit from where it was a year ago. And
2:18
that's ultimately not good for federal
2:19
employees who are looking to retire soon
2:22
just because that can um can slow the
2:25
process down for them. If you look also
2:29
at this summer, kind of the big picture
2:31
there, you'll see that as I mentioned,
2:34
there has been a big surge this summer
2:36
in the number of incoming retirement
2:38
claims. And I'll show you some more
2:40
figures here that paints that picture as
2:43
well. In it, it began in May. May this
2:46
year there were 15,048
2:48
incoming retirement claims. Um June
2:52
there were still a lot 13,430.
2:57
And if you look at this table you see
3:00
where that spike really started. To
3:03
OPM's credit, they have been processing
3:05
a lot of these incoming claims. In May,
3:08
over 9,000 were processed.
3:10
The backlog was at a little over 21,000
3:13
in May. It really shot up in June
3:15
though. The processing went down and the
3:18
number of claims stayed pretty high. So
3:20
that pushed the backlog up to over
3:22
26,000.
3:24
If you look at this next table, uh you
3:27
get an even clearer picture of the
3:29
situation. Like again, I said 2025 has
3:32
been an anomaly and and this this table
3:34
really tells the story. Looking back to
3:37
2021, there's no comparison. Um you see
3:40
May well over the the recent years in
3:46
comparison 15,048
3:49
the next highest was uh 2021 at just
3:53
over 7600.
3:55
June same kind of thing and as I said in
3:58
July it kind of stabilized a little bit
4:00
more. July is apparently a more popular
4:04
time for federal employees to retire
4:06
compared to May and June at least for
4:08
going back the the previous five years
4:10
based on these figures. So what's
4:12
driving this unusual summer surge in the
4:16
retirement claims? I think it's the
4:18
downsizing efforts by the Trump
4:20
administration. As soon as he came into
4:22
office, President Trump started making
4:25
good on his campaign promise to try to
4:27
shrink the size of the federal
4:28
government. And we're starting to see in
4:31
these numbers um the results of that.
4:35
The deferred resignation program,
4:38
federal employees watching this channel
4:40
undoubtedly will remember that um almost
4:43
from day one that was announced. They
4:45
put the offer on the table. Hey, you can
4:48
resign and we'll pay you your pay and
4:50
benefits through the remainder of the
4:52
fiscal year. According to OPM, over
4:56
154,000 federal employees resigned under
4:58
the deferred resignation program. And um
5:02
OPM's new director, Scott Koopour, said
5:06
recently that he expects this number to
5:08
double in the near future. He was on Fox
5:11
Business when he made that statement.
5:13
Also, we've had um VISPs and VAS. That's
5:16
voluntary early retirement authority and
5:19
voluntary separation incentive payments.
5:22
Those have been going on. There have
5:24
been rifts going on. So, add it all
5:27
together and it's uh it's it's pushing
5:31
up the number of federal employees
5:33
leaving the government. I think also at
5:35
the end of the fiscal year, you're going
5:37
to see those numbers go up even more.
5:39
Now, something else related to
5:40
retirement for federal employees, tying
5:42
into all this as well, is that OPM has
5:45
launched a new digital retirement
5:47
processing system this year. It's called
5:49
the online retirement application or OR
5:52
for short. It launched in May and OPM
5:56
stopped accepting paper retirement
5:58
applications on July 15th. So, any new
6:02
retirements that come in, any new
6:04
submissions, all have to be digital and
6:06
go through the this O system. The goal
6:09
is to streamline the retirement
6:11
processing, reduce delays. OPM's
6:14
director, Scott Cooper, said recently,
6:17
quote, "The team at OPM have been
6:19
working tirelessly to take the federal
6:21
retirement system digital. Success will
6:24
be for nearly all federal employees to
6:26
self-retire in a matter of seconds, as
6:29
opposed to the antiquated process that
6:31
can take several months, if not years,
6:33
to complete." It's interesting he
6:35
mentions the the time frames on the
6:37
current process. Comments we've seen
6:39
from some of our readers and viewers
6:41
indicate that they have indeed had to
6:43
wait years in some cases under the old
6:46
system to have their retirements fully
6:49
processed by OPM. I'd say that's
6:52
definitely the exception rather than the
6:54
rule. According to OPM, it typically
6:56
will take three to five months based on
6:58
their current estimates to process a
7:00
federal employees retirement
7:02
application. But it has happened. And
7:04
the problem with these delays from a
7:07
federal employee standpoint is that it
7:09
means they have to wait longer to get
7:10
their full annuity payments. When the
7:13
retirement application process begins,
7:16
federal employees get an interim annuity
7:18
payment. And according to OPM, that's 60
7:20
to 80% of the full annuity payment.
7:23
Again, the process typically takes three
7:25
to five months before that full annuity
7:28
kicks in once the retirement application
7:31
is fully processed. But as you can
7:33
imagine, if this were to go on for over
7:34
a year and you were planning on having
7:38
one amount and you're getting 60% of
7:41
that amount, that can be tough. So, it's
7:44
certainly in
7:46
uh federal employees best interest to
7:48
have the process expedited. And that's
7:50
what this new system is intended to do.
7:53
With respect to these interim annuity
7:55
payments, according to OPM,
7:57
uh they exclude deductions for health
8:00
benefits, life insurance, dental,
8:02
vision, and long-term care. In other
8:04
words, those things are not deducted
8:06
from the interim annuity payment. The
8:09
only deduction that does come out of it
8:10
is for federal tax. State tax is also
8:13
excluded. Now, one challenge with
8:15
developing and launching this new
8:17
digital retirement system is with
8:20
respect to digitizing all these millions
8:22
of records. OPM's focus has been on the
8:25
new retirement applications coming in.
8:28
They're not even looking at this point
8:30
or worried at this point about the
8:32
existing paper records that are all out
8:34
there that are sitting in the mine up in
8:37
Berser, Pennsylvania. There's a man by
8:39
the name of Al Hemler. He's the former
8:42
chief technology officer at the office
8:44
of personnel management and uh before he
8:46
left recently for a private sector
8:48
position. He had worked on on this new
8:51
digital retirement processing system and
8:54
he wrote a blog post about about it
8:56
recently and he was describing some of
8:58
the challenges they were facing. He
9:00
wrote, "Considering that in an average
9:02
year about 100,000 people retire from
9:05
federal service annually, that volume of
9:07
paper becomes a logistical ball and
9:09
chain that must be managed to respond to
9:11
annuitant needs. How could OPM best do
9:14
so?"
9:15
The most insightful answer from one of
9:18
my retirement services partners was to
9:20
focus on the incoming materials as the
9:22
higher priority and as quickly as
9:24
possible automate the processes to
9:27
efficiently handle new paper coming in
9:29
the door. Sounds deceptively simple, but
9:32
paper comes in from different
9:33
directions. People planning to retire,
9:36
payroll centers, people who have
9:38
retired, people claiming to be a
9:40
survivor needing to be verified and so
9:42
on.
9:43
Digitizing all the inputs simultaneously
9:46
and on a constrained budget was a
9:48
challenge, but we made incremental
9:50
progress. For example, we were able to
9:52
automate the process of accepting
9:54
retirement packages for a single payroll
9:56
provider in a small handful of agencies.
10:00
Beyond accelerating the receipt of
10:02
error-free applications, the project
10:04
also demonstrated our ability to define
10:06
digital interfaces with other agencies
10:09
so that we could receive retirement
10:10
applications and the payroll data
10:13
required for annuity calculations. The
10:15
plan for the remainder of fiscal year
10:17
2025 was to add a second payroll
10:20
provider. There are a total of five and
10:23
begin to accept retirement applications
10:25
from another set of agencies.
10:28
This project provided the first
10:29
implementation where retirement services
10:31
digital processing replaced paper
10:33
processing.
10:36
So that just gives you a glimpse into
10:38
what OPM was facing with developing this
10:40
system. It's easy to criticize them and
10:44
say, hey, why haven't you developed a
10:47
digital system? This is 21st century.
10:49
This should have been done years ago.
10:51
But it is a very complex process as he
10:53
lays out. That gives you a basic
10:55
overview of the latest situation with
10:57
OPM's retirement processing and the
11:00
number of federal employees that have
11:02
retired over the summer. Like I said,
11:04
there has been an unusual spike. And as
11:07
I laid out, I I think it's all of the
11:09
ongoing downsizing efforts that have
11:11
have caused this, which isn't a big
11:13
surprise. I expect the numbers to be
11:15
even higher at the end of the fiscal
11:17
year since the deferred resignation
11:19
program was set to run through the end
11:21
of the fiscal year. presumably starting
11:25
um October 1st, you'll have even more
11:27
federal employees retiring from under
11:30
that program. So, the future reports
11:33
will reflect that and it'll be
11:37
interesting to see how those numbers
11:38
compare to past years if there is indeed
11:41
a really big spike. We won't see that
11:43
though until probably the October,
11:46
November reports, I'm guessing, when
11:48
they come out. But I'll continue to keep
11:50
you updated. So, be sure to subscribe to
11:52
the channel and stay tuned to FedSmith
11:54
for more updates. Be sure to also visit
11:56
our website, fedsmith.com. We've got a
11:58
number of articles on this topic as
12:00
well. Have a good day.
#Government
#Legislative Branch
#Politics
#Public Policy