OPM Trap Explained – What You Should Do
Are you down with OPM? If you are a federal employee, you definitely are. As the main Human Resources department for federal employees, the Office of Personnel Management (OPM) is the clearinghouse on all benefits and retirement details. Federal Educators shares information on what you can do to avoid the “OPM Trap” effectively so your retirement benefits and pension payments aren’t delayed.
OPM encourages all employees to begin planning their retirement as early as 5 years before their proposed retirement date. In addition to the plethora of forms that must be filled out prior to retirement, this generous lead time allows employees to plan ahead. Federal Educators recommends using this time for a few important action items like confirming your FEHB health insurance before you retire so coverage remains uninterrupted before Medicare begins and gaining a better understanding of your FERS annuity pension eligibility and how any TSP funds will work to fund your retirement. This is also a great time to decide on your FEGLI life insurance coverage.
As you approach a year out from your anticipated retirement date, here are some additional items to review. By this time, you should plan to review your Official Personnel Folder (OPM) for any discrepancies on dates of service and/or raises, choose an official retirement date, notify your supervisor and plan to attend a pre-retirement counseling session on benefit coverage. Lastly, make sure to elect any survivor benefits on your coverage.
It’s the final stretch – retirement is quickly approaching! At least 2 months before your designated retirement date, make sure to apply for your FERS annuity. This gives your personnel office ample time to review files and complete their paperwork verifying your service. Your payroll office must also complete forms and then send the application to the OPM. Upon receipt of your file, OPM will issue a civil service identification number. Do not lose it! All progress and any questions are referenced by this number.
Reviewing paperwork, calculating your FERS annuity and final processing currently takes OPM over 90 days to process (as of July 2021) though in some cases, can take a year for approval. Because this process is not instantaneous, many refer to this time as the “OPM trap.” During this time, you will only receive an interim payment, usually 60-85% of your actual FERS annuity. Checks will begin to arrive within 6 to 8 weeks of retirement. This can come as a huge surprise for some so in order to avoid waiting months for payments, it’s critical that a plan is in place.
That’s where Federal Educators comes in! We can provide you with the perfect combination of educational resources and a knowledgeable team that will ensure a smooth retirement. Call our St. Petersburg office at (813) 544-2908 to get started today.
