Feds and retirees face fresh uncertainty amid resurgent instability

Guest:	John Hatton
Title:	Sstaff vice president for policy and programs, National Active and Retired Federal Employees Association
Summary:	OPM’s customer‑service struggles are coming at the same time the agency is rewriting policies that affect job security and appeals. We’ll unpack what it all means for people counting on a stable, fair system with John Hatton, staff vice president for policy and programs at NARFE.

The Federal Drive with Terry Gerton provides expert insights on current events in the federal community. Read more interviews to keep up with daily news and analysis that affect the federal workforce. Reach out to Terry and the Federal Drive producers with feedback and story ideas at FederalDrive@federalnewsnetwork.com.

Interview transcript:

Terry Gerton Let’s start with one of our perennially favorite topics, retirement processing. What are you hearing from NARFE’s membership right now? How’s it going?

John Hatton Well, it depends. I think we’re still in a waiting game for some of the information, how quickly it goes through. But we’ve heard some really bad stories for people who aren’t even over at OPM. So if they’ve filed for retirement at their agency and then their claim has not yet been sent over to OPM and maybe stuck at the National Finance Center — we’ve heard that about a large group of USAID employees who were separated  involuntarily, but they were eligible to retire, then that’s July 1st and we’re still hearing delays about them getting to OPM. You can’t even start that interim pay status at that point. So OPM is tracking interim pay status. Once they get the claim, it’s about seven days to at least get some portion of your annuity. Now that’s a final adjudication of the claim. It’s not the final amount you’re going to get, but it’s something, and they’ve increased the kind of percentages to try to get people closer to their full annuity. So once it gets to OPM, at least there’s that interim step that I think is very critical. But we have these claims stuck at the agencies or at the payroll processor that aren’t getting to OPM, which is leading to really long delays and no income for a long period of time. So that’s the No. 1 problem. The No. 2 problem is that OPM still, once it gets that interim pay status, has a huge number of claims. I think their last inventory is 54,000 claims, you know, when they’re processing maybe about 10,000 a month, and maybe they’re picking up the pace of that a little bit, but certainly not enough to get through that in a couple of months, which is the normal time frame. So you have a time frame where it’s supposed to be 30 to 45 days from when you apply with the agency to get over to OPM. We’re looking at more than six months, seven months for some people getting there. That’s a huge delay. And then we’re looking at the inventory and the pace of claims processing that looks like, you know, just back of the envelope, something like five months when it should be closer to 60 days. So, a lot of issues there. I think, obviously, there was a huge influx of claims in September and through the end of the year to OPM related to that deferred retirement program and a lot of these reductions in force. But clearly, there’s not the capacity, I think, to deal with it in a timely manner.

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Terry Gerton Are these applicants getting any sort of update or status? Do you feel like there’s any systemic review going on or is it just, hey, we’ll let you know?

John Hatton The online retirement application has provided at least a little bit of insight into kind of where it is and where it’s going, more so than it has in the past, but it doesn’t help if your claim is stuck at the National Finance Center and it hasn’t been sent over to OPM and you can’t get an answer from anybody. And I think that’s happening for some people, where they can’t an answer why, what’s going on with their personal claim. It’s gotten better than it used to be, but it’s still far from where it should be.

Terry Gerton Who should be pulling all of these pieces together? Is anybody looking at an end-to-end solution space for this backlog?

John Hatton Well, certainly White House, OMB should be direct, trying to get in touch with the right people at the agencies if we have an issue where they’re not even getting to OPM. I think OPM is trying to do what it can do with the resources it has. But, you know, a number of people at OPM took deferred resignation program, and they have less staff than they used to have. And so they’re dealing with less people and staff to process these claims. They’re trying to modernize with the digital retirement claims process. That apparently is looking like they’re moving faster with those claims than the old paper-based claims, but we’re still not switched over. So some of the intermediate steps that OPM has taken to modernize, I think, are positive, but they’re facing an overwhelming amount of work with an underwhelming amount of staff.

Terry Gerton I’m speaking with John Hatton. He’s staff vice president at the National Active and Retired Federal Employees Association. Well, John, let’s keep our microscope focused on OPM for a minute longer. The Schedule Policy/Career rule became final recently. What’s NARFE’s take on how that’s going to be implemented?

John Hatton Well, it doesn’t go into effect for 30 days, so March 9th, and we’ll have to see exactly how many people are reclassified into the new Schedule Policy/Career, but OPM, at the onset of the proposed rulemaking process, said about 50,000 people. We do see that it looks like they’re going to require people to sign waivers in getting into Schedule Policy/Career to acknowledge it. For full disclosure, NARFE has been challenging this policy via a lawsuit that had been on hold during the rulemaking process, but we’ll pick back up again. So we oppose the rule on a legal basis. We’re asking Congress to shore up the statutory regime to make it even more clear that it’s illegal. But our main concern here is that it is taking away your rights to appeal politically based termination. That really undermines the merit-based civil service. And instead of being able to appeal to an independent body, like the Merit Systems Protection Board, you have to go to your general counsel, who is themselves potentially subject to the political nature of their position. So, you know, it is a big step back for where the merit-based civil service has been, and in combination with a lot of these other policies coming out, really moves us to a more politically based civil service rather than a nonpartisan, merit-based one.

Terry Gerton Speaking of those rights to appeal, OPMs proposed some new additional regulatory changes that would centralize appeals away from MSPB, those that might deal with RIFs, probationary firings, and suitability disputes. How does this, following on the Schedule Policy/Career, increase, I guess, the risk of loss of due process, conflict of interest?

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John Hatton All taken together, it further politicizes the civil service. So if Schedule Policy/Career impacts 50,000 or more, some of these other rules are even broader in terms of their impact on the federal workforce. So suitability used to be a determination that was done as you enter civil service, but it can now be done potentially as you’re no longer suitable to be working in the federal government. And bypassing this independent body of MSBP appeals, we’re looking at eliminating appeal rights for probationary employees, which are already limited in themselves based on politically based terminations. So this is really stepping back a lot closer to the spoils system that we had where the people employed the federal government had to be aligned with the political party that won the election, that maybe were campaign donors. It moves us into a situation where it’s more likely to have politically based enforcement of laws, politically based provision of services favoring one group or locality over another, politically based awards of contracts or grants or exceptions to tariffs. So across the board, instead of being based on objective criteria that are laid out in law and potentially regulation, you have subjective or arbitrary criteria more based on the size of political donation or your actions.

Terry Gerton So these changes all land at about the same time as Congress has now launched a bipartisan federal workforce caucus. I think a lot of people thought there was one already, but now there is one. So when NARFE thinks about engaging with this new group, what’s on your agenda to put on their agenda?

John Hatton Well, this is certainly one pushing back on the politicization of the workforce. And so that is one of the things they’re focusing on is pushing back against Schedule Policy/Career. It’s a great group of members of Congress leading the caucus. James Walkinshaw, who took over for Congressman Connolly, he used to be his chief of staff back in the day. Sen. Van Hollen on the Senate side. There was a number of other senators and representatives at the launch — Steny Hoyer, a longtime supporter of federal employees, Sen. Alsobrooks, Sen. Kaine, Sen. Suhas Subramanyam. So we’re already getting a lot of people onto the caucus and certainly I think it’s a helpful way to consolidate support for these issues within a group, foster communication between these members of Congress and help coordinate these activities in Congress. It’s not as if these activities weren’t already ongoing, there’s already people pushing some of this legislation, but I think that it will improve the coordination of it, improve the visibility of who is taking these actions in Congress for constituents, and hopefully move the ball forward on these issues.

Terry Gerton What do you hope will be at the top of their priority list?

John Hatton I think these attempts to wholesale, large-scale reductions in force outside of the approval of Congress, the politicization of the workforce in terms of saving the Civil Service Act and moving that forward, pushing back against some of these other rules — those are the things that we’ve been working on and we’ll continue to work on.

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