Federal Worker Retirement System Modernization Hits Bump

October 17, 2008 (PLANSPONSOR.com) - The federal government's project to bring its retirement system into the electronic age has hit a bump in the road.

Govexec.com reports that the Office of Personnel Management (OPM) on Thursday ended a contract with Hewitt Associates over difficulties in developing and maintaining an electronic retirement calculator. Ronald Flom, OPM’s senior procurement executive, said during a press conference that while Hewitt had originally created a retirement calculator that worked well in a commercial environment, customizing the system to fit the complexities of federal retirement proved difficult, according to the news report.

However, OPM Acting Director Michael Hager said on Thursday that other components of the RetireEZ modernization plan will continue. “The goal is to allow an employee to view their personal records and model potential retirement scenarios and even apply for retirement electronically,” said OPM Deputy Director Howard Weizmann, in the news report.

In April 2006, OPM asked Congress for a special $26.7 million appropriation for a “retirement systems modernization project.” Currently, each retirement claim requires a tedious, and sometimes lengthy, search for personnel folders and other paperwork – “a shameful way” of doing business, Linda Springer, director of the federal Office of Personnel Management (OPM), told the House federal workforce subcommittee (SeeOPM Asks for $26M for Retirement Systems Upgrade).

In May 2006, OPM announced a 10-year, $290 million deal with Hewitt Associates to undertake the work of creating a one-stop electronic shop for federal employees and retirees to access their retirement records and for the government to compute pensions (See Feds Keep Marching towards Electronic Pension RK ). The following month consultant Accenture was contracted to develop business transformation and information technology models.