The following text are the remarks given by Janice Lachance, Acting Director of OPM, given to delegates at the NARFE Region VII Conference at Salt Lake City, UT, during the week of Sept. 15, l997. The information contained therein should be of interest to all NARFE members.
"OPM and NARFE"
Thank you. It's a great honor to be with you today. All of us at OPM feel we have a special relationship with the National Association of Retired Federal Employees. We believe that our fellow federal employees, in their retirement years, deserve the best possible treatment from their government and we have a solemn obligation to provide it.
Today I would like to talk about three subjects of interest to NARFE and to OPM: first, some of the work we have been doing with NARFE to enhance our service to our annuitants and their families; second, how we see current issues relating to health and retirement benefits; and finally, a look at some of the legislative issues we are working on in this session of Congress.
I'd like to put my remarks about our customer service in the context of this Administration's reinvention initiative. As many of you know, one of the most visible results of reinvention has been in the size of the federal workforce. At last count, in June of this year, there were 280,000 fewer federal employees than there were when President Clinton took office.
But reinvention is a tool, not a goal. Our goal is better service to the American people, and especially to those who have made public service their life's work. The government that President Clinton and Vice President Gore envision is smaller and less expensive, but more effective and responsive.
At OPM we are proud to have been leaders in downsizing, but even prouder to have been leaders in improving service. Although our workforce is smaller, we have increased our investments in communication with our customers, in the skills of our workforce, and in productive technology. Our goal is continuous improvement of our services in all dimensions: timeliness, accuracy, and customer satisfaction.
Let me look at how this approach is improving services we at OPM have been providing to our friends at NARFE.
We have identified forms and pamphlets that can be stocked by NARFE Service Centers, updated the Service Officer Guide, and helped Service Officers assist members with questions on retirement and insurance benefits.
We meet quarterly with your president, Charles Jackson, and his staff to exchange information and address mutual concerns.
We recently issued a letter that explained to NARFE members the rules that allow you to participate in agency-sponsored retirement seminars and to make use of agency facilities to provide information about NARFE to current federal employees.
We also worked with you on our tenth semi-annual mailing to federal employees. As you know, these letters go out in the first six months after an individual's retirement, and have made a significant contribution to your membership program.
We have worked with Retirement Life on articles that keep your members up to date on their benefits and on services available from OPM.
One of the realities we face today is that there are not one, but two, retirement systems we must understand and explain to retirees, the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS). Right now, the number of people who have retired under FERS is relatively small, less than one hundred thousand, but that number will grow and there is a need to make sure that people understand it.
In some ways, it is a more complex system, because FERS retirees need to understand the Social Security System and the Thrift Savings Plan as well as FERS itself.
We at OPM will continue to work with you to provide the materials and the information that will make FERS understandable to everyone who is using it or will use it in the future. The fact is that it is an excellent retirement system, and we want those who use it, or may use it, to do so with a maximum of satisfaction and an absolute minimum of uncertainty -- and we will work with NARFE to achieve that goal.
I think you know how pleased we are with Annuitant Express, the toll-free automated telephone system that went into operation in January of last year, and for its first service permitted retirees to make federal tax withholding changes during the 1996 tax season.
The number, in case you've mislaid it, is 1-800-409-6528 -- and don't forget your PIN number.
Since it began, Annuitant Express has been used to carry out about 260,000 transactions. Of these, by far the largest number, 210,000, were to make changes in tax withholding. Another 21,000 were requests for duplicate 1099R tax forms -- the Statement of Annuity Paid -- and another 17,000 were for changes in health benefits.
Annuitant Express benefits everyone. It enables OPM to perform more work with fewer employees, and it gives retirees fast, accurate information, without having to write letters and wait for letters in return. This program truly is a glimpse of the more efficient, yet more customer-friendly, government of the future.
Because of its popularity with retirees, we have continued to add new services to Annuitant Express.
In March of last year we added the option of allowing retirees to request duplicate 1099R forms.
Last fall, we expanded the system to allow retirees to make Federal Employee Health Benefit Open Season enrollment changes. Since then, about 42 percent of health- benefit changes have been made by Annuitant Express. That's about 17,000 out of 40,000 changes.
As of July of this year, in addition to being able to change federal income tax withholdings and request duplicate tax statements, retirees and survivors can use Annuitant Express to have a portion of their annuities allocated for state tax withholding and to buy savings bonds. Already, annuitants have called in 29,000 state tax withholding changes and 1,300 requests for savings bonds.
When this fall's FEHB Open Season begins, the system will have been expanded to offer additional transactions including requests for brochures, obtaining satisfaction survey results on participating plans, and obtaining information on payment options.
These additions were based in part on information we received from three focus groups we conducted with NARFE members in Sierra Vista, Arizona; Springfield, Virginia; and South Minneapolis, Minnesota, asking them about their specific needs and priorities.
The system will also be expanded next month to permit retirees and their survivors to request the replacement of Civil Service ID cards, to verify life insurance coverage, and to verify their income and their survivor benefit rate. If you are applying for a loan, for example, you could call and learn your exact income, and you could also have this information faxed to you if you needed proof.
Future additions to Annuitant Express could include expanding the Voluntary Allotment system to include the ability to make deposits in your checking and savings accounts.
We are also proud of our Survivor Express program, which began in 1994 and has revolutionized the way we process our survivor annuities. The key to this new system is simply trust. If eligibility is clear, as it is in the vast majority of cases, we simply start the payments, based on the notification of death. Service first; paperwork later.
Under the old system, we were authorizing our first annuity payment to survivors in an average of twenty-eight days -- which meant there was almost always a break in benefits.
Under Survivor Express, we issue the first payment in an average of five days, with no break in payments in most cases, depending on the time of the month that notification is received.
That is not only good customer service, it is compassionate customer service, helping people at a time when they most need our help, and we're proud to be able to provide it.
Another important new service starting this fall is toll-free access to our Customer Service Specialists -- in other words, if we keep you waiting, we pay for it, not you. We have been listening to your requests, and we know that toll-free service is one many of you have asked for.
Annuitants and survivors will be notified of the new number -- and the PIN needed to access automated features -- in two mailings that are scheduled for the end of this month and mid-October. These mailings will also explain the recent changes in Annuitant Express.
We're proud of these new services. They are made possible by our focus on directing our resources to ever-improving technology and more skilled people.
I might add another change that was recently announced. As of January 2, 1999, the law will require that all federal checks that go out -- except for tax refunds and a few specific exceptions -- must be delivered electronically to your bank or other financial institution. This will speed transfers, save money, and eliminate the risk of loss or theft.
There are exceptions, where electronic transfer would create a financial hardship or where existing recipients would have other difficulties in complying with the new procedure, usually due to physical disability or geographic barriers. If electronic transfer would be difficult for some, we stand ready to help. No one will be abandoned.
But for most of us, electronic transfer should be a convenience, and it will also save the taxpayers a great deal of money. It now costs an average of 43 cents to mail a check, whereas they can be sent electronically for an average of two cents, and the Treasury Department estimates that this new policy will amount to savings of $100 million a year.
Let me move on to my second subject: the current state of federal retirement and health benefits. One of our greatest concerns at OPM is the benefits that federal annuitants receive, and as you know those benefits have been the subject of intense debate in recent years.
In 1994, a new Congressional majority was elected, and many of its members were less sympathetic to federal employees than is the Clinton Administration. Some of the new members said the government is the enemy, and the need is not to improve it but, as much as possible, to abolish it.
When the time came for budget cutbacks, many of these people cast a cold eye on federal salaries and benefits, including retirement benefits.
Let me make one point very clear. If there is one thing that we at OPM believe, it is that federal benefits are not entitlements, to be lumped with welfare and unemployment. They are benefits earned as part of an employment contract with federal workers--they are earned benefits and must be respected and treated as such.
Everyone understood, as 1995 began, that sacrifices would have to be made in order to achieve a balanced budget, but the political question was just who would pay what.
A vigorous debate ensued -- that is putting it mildly -- and when the dust settled, in the form of the recent budget agreement, federal employees and retirees had done very well.
COLA's will not be subject to delay.
The budget agreement does include a temporary increase in the amount working federal employees contribute toward their retirement, beginning in 1999 and ending in 2002, culminating in a total, four-year increase of one half of one percent of salaries. Yes, those are real dollars, a real deduction of, for example, fifty cents for every hundred dollars in our paychecks.
I believe this is a small price to pay if we can stabilize our annuity . This increase also underscores the fact that we are paying a larger share of our own retirement -- it is not a gift to any of us.
Politically, it is important that, whenever possible, we remind Congress and the American people that our benefits are earned, not a gift, not entitlements, but earned. That is something we at OPM do at every opportunity, just as NARFE does. It is a message that cannot be repeated too often.
With regard to health benefits, we share your concern that federal employees have adequate health care coverage at affordable prices during their working years, and continue to have first-rate protection when they retire.
We were therefore concerned that the provision of the law that provides for the "phantom" formula to be included in the calculation of the government's share of the premium expires in 1999. As a result, if no new legislation had been enacted, the average enrollee's premiums would have increased an estimated $23 a month.
We anticipated this problem and took the lead within the Administration and with Congress to develop legislation that was acceptable to all parties, and which has now passed, and that ensures that there will be no such increase.
To sum up, if we look back two years, and consider the massive cutbacks that were being discussed, and then look at where we are today -- we all have a great deal to be proud of and thankful for.
And let me assure you that you in NARFE did a great deal to bring about that favorable outcome.
Yet despite the budget agreement, we cannot assume that the threat to federal benefits is ended.
That is why we must continue to work together to demonstrate to Congress and the American people that federal retirement benefits are earned benefits and are part of a solemn trust between our government and people who have served it well.
I might close with a look at the current session of Congress.
One issue to which we have been paying great attention is federal employees being assigned to the wrong retirement system. OPM has developed a plan to prevent that ever happening again and to compensate those to whom it did happen. We want to even the playing field. Under our proposal, employees placed in the wrong program for three or more years could choose between continued coverage under FERS (as current law requires) or CSRS Offset. We are now drafting bipartisan legislation to implement this proposal, which we expect to have ready by October 15. We are working with Chairman Mica, and we both hope that this legislation will pass Congress this year.
Mr. Mica has also expressed interest in expanding the Federal Employees Government Life Insurance program, in creating medical savings accounts, and in allowing military retirees to join the Federal Employees Health Benefits Program. We will continue to be leaders in shaping proposals that are fair and equitable, and I can assure you our guiding principle will be to protect the interests of federal retirees in any legislation that emerges.
Let me thank you again for inviting me to be with you. The Clinton administration has a strong record, on improving our government, and in particular on supporting federal retirees, and I appreciate this opportunity to discuss it with you.
I look forward to working with you for a long time to come.