Living on 1/3 of your income

Monday - 3/26/2012, 2:00am EDT

Humor me: Old joke to make a new point.

Here goes this time-trusted knee slapper:

So, this 1920s lonely sailor, meets this young woman. They agree to an evening of dinner and dancing. Around about midnight, he looks at the clock and says "You know, my ship sails in eight hours."

She replies, "I'm dancing as fast as I can!" Get it, she thinks ...

Anyhow, told you it was good. And it has a point too.

Fast-forward to today, March 26, 2012. The sailor represents thousands of recent (and some not so recent) federal retirees who are waiting for full pension payments long after they retired. The Office of Personnel Management, which processes retirement applications, represents the maiden in the story. It's dancing as fast as it can.

But for a lot of retirees, that's not fast enough. OPM has made processing claims (a primarily paperwork challenge) a top priority. Nobody doubts they mean it, or that things will get better. But for people stuck in the pipeline — and with a 24 percent spike in retirement applications last year — good intentions aren't enough.

Most interim payments are for 80 to 90 percent of the estimated final annuity. Full payments on average can be expected in about four months. But many retirees have told us — and other media types — that they are getting a lot less, and they've been waiting a lot longer.

Like this frustrated former fed:

  • "I just wanted to share my sorry experience with an interim pension from OPM. It took me by surprise, because I had the impression that OPM was going to start using the agency's retirement estimate as the interim pension amount.

    "I retired 12/31/11. My interim pension is 36 percent of the estimate my agency gave me. My first pension payment was even less than that. It's hard to understand why. My 34-1/2 years of service were all with one agency (I had an even 35 years when you add in my unused sick leave). I had no breaks in service. The only possible explanation I can think of is that OPM thinks I have a survivor annuity. My ex-husband passed away in 1994. I tried to send OPM the death certificate at the time it happened, asking them to take the survivor annuity off my record. It took about a year, and a congressional letter, for OPM to respond, telling me they could not accept the death certificate until I retired. So now the death certificate is in my retirement package waiting for someone to look at it. I've received correspondence from OPM, with two different toll-free numbers. One of them turned out not to be reachable from my area of the country. The other seems to be constantly busy. So I sent an email to an address that was provided in the correspondence. I received an auto-reply indicating: 'You will receive a response to your specific questions within the next 15 to 20 business days. However, please be advised that more complex issues, or those requiring the retrieval of a case file, may increase the response time to 20 to 30 business days.'

    "It's been 11 business days (as of last Friday) since I received the auto-reply, and I presume I'll be in the 20 to 30 business-day range.

    "Even if I did have a survivor annuity, I don't know how that justifies an interim pension of 36 percent of my agency's estimate. Thank God I saved my leave all last year, and received a large lump sum payment as well as a buyout. I thought I was going to be traveling this spring, and then remodeling my kitchen. Instead, I'm starting to look for a job and being very conservative with my spending.

    "OPM notified me that my health and life insurance deductions going back to Jan. 1 will be deducted from my April check. I sure hope they know that I reduced my optional life insurance going into retirement. Otherwise, they'll tell me I owe them money in April. Even if they get the life insurance right, I won't get much of a check in April if I'm still on an interim pension. Thank God I put aside the money to pay this year's real estate taxes before I retired."


NEARLY USELESS FACTOID

By Jack Moore

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