Federal Retirement Tsunami Still a Myth?March 6, 2017 / by Sonny Dothard
People feared that the much-talked about federal retirement tsunami will hit this year as many of the federal employees who are eligible for retirement would opt for retiring and enjoying their Federal Annuities at home. It was also believed that feds who don’t want to work under Trump administration would opt to retire. Fortunately, none of this has happened as per OPM data. Just one noticeable thing has occurred, the retirement benefits backlog of OPM has increased again.
Who Says Federal Retirement Tsunami Didn’t Hit?
The data revealed by OPM clearly indicates that the much-talked about federal retirement tsunami has failed to hit this year as well. Only 15,317 feds opted for retirement in the first month of this year. January is usually the month when most federal employees file for a retirement so no one was shocked when this number increased 15,300. In fact, people were a bit disappointed as the number of feds opting for retirement has fallen by about a 100 as compared to January last year. Another point that must be mentioned here is that the numbers of January 2017 fell short by over 3,300 in January 2015.
Federal Retirement Backlog
As expected the increase in the number of retirees in January though not enough to be considered a federal retirement tsunami has increased the ever-growing backlog of OPM, which is currently more than 23,000 claims behind. It is at the highest point since February 2015. At that time, it had exceeded 24,000. February usually witnesses the second highest number of claims and this comparatively smaller surge results in producing the highest backlog of the year. At the moment, the backlog inventory is more than 10,000 claims higher than the steady state inventory of OPM. For those who are unaware, the steady state inventory is 13,000.
Though the federal retirement tsunami did not occur in January 2017, it seems the OPM was expecting it. The reason being the agency has succeeded in processing more than 7,000 retirement claims in January 2017. Unfortunately, the speedy processing of claims in January 2017 is not enough to enhance the agency’s position ahead of the January surge partly due to its dreary progress in the last months of 2016.
The percentage of retirement claims processed in 60 days or less has declined to 51 percent which is at an all time low since May 2014. It was in May 2014, that the agency started tracking this statistic. The monthly rate of claims processed in less than 60 days time fell to 39 percent. As per data, the average number of days it took to process a case rose to 53 which is a 16-month high. OPM succeeded in making progress in reducing the average number of days it took to process a case in over 60 days. That number fell to 89 and it’s the lowest since October 2015.
In the year 2016, 93, 713 federal employees opted for retirement. This figure is high but is nowhere close to being called a federal retirement tsunami. In 2014, the Government Accountability Office had predicted that around 600, 000 federal employees that constituted 31 percent of the federal workforce would be eligible to retire by September 2017.
A number of experts suggested that the presidential transition could lead to a federal retirement tsunami or at least a higher turnover in the federal workforce that would drain federal agencies of a majority of their workforce and institutional knowledge. The prediction of the retirement tsunami was made in the 1990s when first of the baby boomers began approaching the retirement age at the same time when the hiring of young federal workers slowed.
In the months leading up to the presidential election, many federal workers stated that they were uncertain about the retirement plans. In a survey, about 35 percent of the respondents even stated that the transition would be a key factor in deciding their retirement plans. At least 18 percent respondents admitted that they would make a decision regarding the retirement only when the result of the election was clear.
As per the latest data made available by the OPM, on September 2015, more than 45 percent of federal employees are more than 50 years of age. The same data states that just seven percent feds are younger than 30 years of age. The average age of a federal employee is 47.4 years. This data may be a sign that the federal retirement tsunami may hit in the future.
It is evident that the federal retirement tsunami hasn’t hit due to the recent presidential election results. It can be assumed that federal employees might value their annuities or retirement benefits but they still don’t want to leave their lucrative jobs just because the head of the oval office has changed.