This summer, the Office of Personnel Management (OPM) plans to implement a new, entirely digital retirement processing system for the federal employees. The new online retirement processing system will come into effect in less than a month. 

Any new retirement applications submitted on or after June 2, 2025, should be filed online by the applicant. As stated by OPM, any freshly prepared paper for retirement processing will not be entertained for federal employees or any subsequent applications; instead, they will be sent back to the agency for digital resubmission.

OPM has said that beginning on June 2, it would replace its more than 65-year-old manual procedure with an entirely digital one, following more than 35 years of unsuccessful modernization attempts. As a result, retirees would have to wait less than a month instead of three to five months to get their retirement payout.

In this blog, we will explore the retirement processing benefits for federal government employees once the modernization process comes into action on the tentative date.

OPM is the federal government’s main human resources organization; it is responsible for making sure the government has a productive civilian workforce. Its objective is to establish hiring and recruitment policies and procedures, offering several benefits, including health insurance, and managing the federal employee retirement program.

OPM has been working to update its federal employee retirement program for more than 2 decades by upgrading outdated information management systems with automated online procedures. The agency suspended its retirement modernization initiative in February 2011 due to the failure of earlier attempts.

As per several evaluations, GAO discovered that OPM’s attempts to update its retirement system have been hampered by inadequacies in various critical management disciplines that are necessary for IT modernization initiatives to be effective. For instance, in 2005, GAO recommended addressing the following areas of weakness: 

• Project Management

Despite having outlined the main elements of retirement modernization, OPM failed to recognize the interdependencies between them, raising the possibility that setbacks in one activity could hinder advancement in others. 

• Risk Management

OPM lacked a procedure for routinely identifying and monitoring project risks and measures to mitigate them. This meant that OPM had no way to deal with possible issues that would harm the budget, timeline, and quality of the retirement modernization program.

• Organizational Makeover Management

In response to the new system’s deployment, OPM earlier did not create a comprehensive strategy to assist users in transitioning to new job responsibilities. This could have led to misunderstandings over roles and responsibilities, delaying the successful deployment of the system.

• Cost Estimation

The cost estimate that OPM had created lacked the supporting documents required for its accuracy. This meant that OPM lacked a strong base upon which to build program cost baselines or budgets.

OPM has been processing retirement applications for federal employees using a manual, paper-based method. As of April 2025, the OPM Retirement Quick Guide stated that the agency’s current estimate for the time it will take to fully process a retirement application is 3-5 months. As a result, a federal employee who applies now will not receive his full annuity payout for 3-5 months.

Additionally, the existing method is prone to mistakes. Errors in a government employee’s retirement application package led to further delays in the procedure. Also, the existing approach relies on coordinated efforts by OPM, payroll offices, and government workers, among other parties. 

This summer, the OPM plans to implement a new, entirely digital retirement processing system within the government.

OPM started projects to automate its outdated paper-based procedures in the late 1980s after realizing the need to update its retirement processing. For the purpose of offering timely and comprehensive benefit payments, the original modernization goals called for the development of an integrated system and automated procedures. But despite efforts spanning more than 20 years, the government has failed to succeed in realizing its goal for a reformed retirement system.

Following its establishment, the Department of Government Efficiency (DOGE) brought attention to the outdated method of handling retirement applications for federal employees. The odd and confusing procedure caught DOGE’s notice as something that needed and needs to be updated.

By the end of February 2025, OPM declared that it had completed its first online retirement application within a week. Officially on 2nd May, it was announced that the retirement process of government employees will be completed through an online process.

Just over five days thereafter, OPM has started implementing the system throughout the entire federal agency. With the RetireEZ initiative, DOGE and OPM’s Retirement Services team appear to have accomplished in a matter of months what the agency was unable to do over a decade. 

From the 2nd of June 2025, government agencies using the Interior Business Center or National Finance Center will have to use DOGE’s new Online Retirement Application (ORA) system. Regarding that, important information includes,

• Beyond this date, handwritten retirement applications will no longer be accepted. 
• The OPM offers an alternative electronic method that agencies outside these common services can utilize. 
• Processing periods for retirement are now shortened from 3-5 months to less than a month. 

The change, according to DOGE, is a “modern digital breakthrough” that will improve productivity and cut down on delays that have long irritated retired federal workers.

Pensions will now be processed online, according to OPM, while DOGE targets a strange federal document extraction procedure. Here are some key highlights on retirement processing.

Annually, over 1 lakh federal employees’ retirement applications are submitted to the OPM. However, processing these applications might frequently take longer than expected. In the real world, OPM failed to process the majority of applications within 60 days between 2014 and 2017.

Administered by OPM, there are over 2.4 million working employees who are covered under the federal retirement program. In the next 5 years, about 32 percent of federal employees who were on board at the end of FY17 will be eligible for retirement.

When they have decided to retire, employees submit a formal request for retirement to their organization’s human resources department. When a person starts getting regular monthly benefit payments, the procedure is finished.

Here are some reasons that were the cause of the delay:

1. Delays are a result of the ongoing use of paper applications and manual screening. OPM was unable to give projected timelines or prices, despite having formulated a strategic vision for modernizing the application process.
2. OPM says that understaffing was an issue, especially during the busiest times of the year. It employs more workers and pays overtime to handle this problem. Moreover, the organization didn’t evaluate how well these actions work or if they cut down on delays.
3. Processing time is also increased by incomplete applications. OPM encourages agencies by offering advice, communicating with them by email and liaisons, and sending them monthly error reports that include the kind of fault discovered and the number of applications that have the same error.

Dealing with a retirement application took months or perhaps a year to process if done manually. It relies on paper files kept in a mine in Pennsylvania, which was the main cause of the agency’s ongoing delay of retirement claims.

An essential first stage in the modernization plan is the use of artificial intelligence (AI) by OPM to clean up its electronic Official Personnel Folder (eOPF). The AI system has proven 100% accurate in a test setting; however, OPM had to file a Privacy Impact Assessment in early April as part of the procedure before it could begin utilizing real-world information.

OPM would make sure that no new paper files were added to the mine, but it has no plans to digitize the papers there using the AI system. A federal employee’s retirement application can now be reviewed and granted in less than a second if this technology is used.

The DOGE and OPM are updating the retirement processing system by transforming it into an online procedure that will take just a few days for processing retirement applications from federal employees.

Additionally, OPM just announced that its customized retirement booklets can now be downloaded digitally via the retirement services website. The booklets are now available to retirees and survivors in original and updated editions thanks to this 18-month project, which will also save agency printing expenses and help prevent the delays that come with requesting printed copies.

Federal employees could soon find that the retirement process is entirely online and takes a few days at most, rather than months, as the modernization effort appears to be progressing swiftly.

The OPM announced that it had obtained funds to start engaging a contractor to develop a new computerized case-management system. In the core of a Pennsylvania underground mine, the system would deal with the files of current and past government employees, which are right now handled manually.

Clif Triplett, senior consultant for cybersecurity and information technology at the employment agency, stated, It will be a modern, automated system reinvention that will improve access for the federal employees.

The primary goal of the initiative was to alert everyone that OPM is beginning the process of hiring a new chief information officer in order to fix another issue: outdated IT systems that were so weak that last year the Chinese were able to access the personnel records of millions of employees.

Due to the system’s inefficiency, retirees had to wait a long time to get their federal pensions and have their inquiries addressed. This was the primary reason the presidential administrations have invested over $100 million to automate the system over the course of three decades. Every initiative has failed; the most recent one was in 2011.

OPM has been striving to provide a retirement process that is quick, easy to use, and sensitive to our workers’ requirements by utilizing contemporary technology and interagency cooperation. All federal agencies handled by the Interior Business Center (IBC) and the National Finance Center (NFC) will be required to begin their retirement cases online through the Online Retirement Application (ORA) as of June 2, 2025. 

Every participating agency will have access to training and onboarding support. However, the HR employees have the timeline until June 2, 2025, to finish these trainings. OPM will now work closely with paycheck providers to guarantee that all agencies will soon have access to ORA.