Federal Retirement Services

High-priority program

Home > Agencies & Programs > Federal Retirement Services

Program level Payment Integrity results

Sponsoring agency: Office of Personnel Management

RS provides Federal employees, retirees and their families with benefits that offer choice, value, and quality to be a competitive employer. Eligible retirees and survivors generally receive recurring monthly benefits. The status of an annuitant may change and result in a change to the benefits due. Life event changes may occur (i.e. a death, marriage, termination of a marriage, child eligibility, or earnings limitations). A known barrier is reliance on self-reporting by annuitants and on other sources. Delayed or the absence of reporting can result in improper payments. To mitigate improper payments, RS conducts various surveys and matches. An additional barrier is the legacy system doesn't provide the needed granularity for root cause.

PROGRAM METRICS

$83,707 M

in FY 2021 outlays, with a

99.6%

payment accuracy rate

PROGRAM METRICS

$87,899 M

in FY 2022 outlays, with a

99.6%

payment accuracy rate

PROGRAM METRICS

$95,302 M

in FY 2023 outlays, with a

99.6%

payment accuracy rate

PROGRAM METRICS

$106,884 M

in FY 2024 outlays, with a

99.7%

payment accuracy rate

PROGRAM METRICS

$109,365 M

in FY 2025 outlays, with a

99.7%

payment accuracy rate

  • Improper payment estimates over time
    View as:

    Chart toggle amounts:
    Proper payments
    Overpayment
    Underpayment
    Technically improper
    Unknown

Payment Integrity results

  • FY 2021 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    10/2020 - 09/2021


    Confidence interval:

    >90%


    Margin of error:

    +/-0.0

Overpayments

Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $228.28 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $228.28 M

Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $0.0 M

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $91.53 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $91.53 M

Technically improper payments

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

Additional information

$91.53 M

Unknown Payment Details

Additional information is needed in order to determine if the recipient is receiving the correct monthly benefit.

The amount of payments that could either be proper or improper but the agency is unable to determine whether they were proper or improper as a result of insufficient or lack of documentation is $10.86 M


Cause of insufficient or lack of documentation & why the documentation is needed for determination of payment type
Payment cause Amount Description of the documentation that was not provided and explanation of why the program is unable to conclude whether the payment is proper or improper without that documentation

Evaluation of corrective actions

Retirement Services consistently meets its acceptable target rate and commitment to addressing improper payments. This is a high priority for the Retirement Services.

Future payment integrity outlook

Federal Retirement Services has established a baseline.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $84,761.74 M
Current year +1 estimated future improper payments $313.62 M
Current year +1 estimated future unknown payments $10.65 M
Current year +1 estimated future improper payment and unknown payment rate 0.38 %

The program's current year improper payment and unknown payment rate of 0.4 % has been achieved with a balance of payment integrity risk and controls and represents the lowest rate that can be achieved without disproportionally increasing another risk, therefore it is the tolerable rate.

Additional programmatic information

  • FY 2022 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    10/2021 - 09/2022


    Confidence interval:

    95% to <100%


    Margin of error:

    +/-1.03

Overpayments

There are barriers to preventing improper payments. The status of an annuitant's death may go unreported. OPM relies on annuitant's family members and other sources to officially report the annuitant's death. However, OPM conducts surveys and matches to mitigate potential improper payments resulting from these events. OPM conducts two matches to identify discrepancies that may exist between the OPM annuity roll and the Social Security Administration’s (SSA) pay system. The Consolidated Death Match (CDM) is compared with OPM’s annuity roll weekly to identify annuitants who are reported as deceased by SSA. The Validated Agency Match System processes the death information in order to terminate Federal benefits and prevent subsequent improper payments. Collection actions are initiated for any overpayments that are discovered. The SSA Death Master File (DMF) match is conducted yearly and is also compared with OPM’s annuity roll and the SSA Death Master File (DMF).
Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $244.68 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $244.68 M

Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $0 M

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $81.13 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $81.13 M

Technically improper payments

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

Additional information

$81.13 M

Unknown Payment Details

Payments are unknown when it is discovered that additional information is needed to determine if the recipient is receiving the correct monthly benefit. Insufficient evidence can also result in unknown payments. Insufficient or missing information that affect the average salary and length of service are the most common reasons for unknown payments.

The amount of payments that could either be proper or improper but the agency is unable to determine whether they were proper or improper as a result of insufficient or lack of documentation is $12.13 M


Cause of insufficient or lack of documentation & why the documentation is needed for determination of payment type
Payment cause Amount Description of the documentation that was not provided and explanation of why the program is unable to conclude whether the payment is proper or improper without that documentation

Evaluation of corrective actions

An upgrade to the current legacy system is needed to properly categorize the root causes of improper payments. A Retirement Services Information Technology Modernization Plan has been created. OPM sought to obtain funding via the Technology Modernization Fund (TMF) but was recently denied. Retirement Services leadership continues to be committed to modernizing and is currently working to prioritize and identify funding in FY 2024. RS was unable to properly categorize $88.08 million in overpayments. However, Retirement Services uses regular Quality Assurance audits to assess accuracy and the corresponding value of improper payments, as well as to identify any training or systemic deficiencies.

Delayed reporting or sometimes no reporting by the annuitant's family or other sources, can result in an improper payment. OPM conducts two matches to detect deaths that are unreported or delayed reporting of deaths. The Consolidated Death Match (CDM) is compared with OPM’s annuity roll weekly to identify annuitants who are reported as deceased by the SSA. The Validated Agency Match System processes the death information in order to terminate Federal benefits and prevent subsequent improper payments. Collection actions are initiated for any overpayments that are discovered. The SSA Death Master File (DMF) match is conducted yearly and is also compared with OPM’s annuity roll and the SSA Death Master File (DMF).

The improper payment rate decreased from FY 2021 to FY 2022 which demonstrates the effectiveness of the current corrective actions.

Future payment integrity outlook

Federal Retirement Services has established a baseline.

Per OMB guidelines the program is not required to establish a reduction target until a baseline has been determined. We are still within the window of 24 months to establish a baseline.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $92,300.59 M
Current year +1 estimated future improper payments $332.28 M
Current year +1 estimated future unknown payments $12.37 M
Current year +1 estimated future improper payment and unknown payment rate 0.37 %
Current year +1 estimated future improper payment and unknown payment reduction target 0.38 %

The program's current year improper payment and unknown payment rate of 0.38 % has been achieved with a balance of payment integrity risk and controls and represents the lowest rate that can be achieved without disproportionally increasing another risk, therefore it is the tolerable rate.

RS ensured that the current internal controls, human capital, information systems, and other infrastructure remained in place. Using the existing corrective actions, the improper payment rate has consistently been at or below 0.38 percent and we expect the same for FY 2023. The improper payment rate for RS remains significantly below the OMB threshold of 10 percent for non-compliance. Improper payments include both overpayments and underpayments. The improper payment rate for overpayments only is 0.28%. Last fiscal year, the improper payment was 0.38 percent. This fiscal year the improper payment rate reduced to 0.37 percent. However, OPM will further evaluate the current corrective actions to determine if any can be expanded, resulting in an even lower improper payment rate.

Using the existing corrective actions, RS’s improper payment rate is 0.37 percent which is well below the OMB 10 percent threshold. Improper payments include both overpayments and underpayments. The improper payment rate for overpayments was 0.28 percent.

An upgrade to the current legacy system is needed to properly categorize the root causes of improper payments. A Retirement Services Information Technology Modernization Plan has been created. OPM sought to obtain funding via the Technology Modernization Fund (TMF) but was recently denied. Retirement Services leadership continues to be committed to modernizing and is currently working to prioritize and identify funding in FY 2024.

Additional programmatic information

  • FY 2023 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    10/2022 - 09/2023


    Confidence interval:

    95% to <100%


    Margin of error:

    +/-1.29

  • Actions taken & planned to mitigate improper payments

    Mitigation strategy Description of the corrective action Completion date Status
    Training
    Regular quality assurance audits were used to assess the accuracy of annuity payments. These audits were used to identify specific training needs and systemic deficiencies. For example, QA conducted an audit on claims processed, identified a training need, and subsequently provided targeted training to improve accuracy. The staff that completes the specific workload increased their knowledge base which impacts internal accuracy goals.
    FY2023 Q4
    Completed
    Audit
    RS is aware of the improper payments; however, systemic limitations prevent RS from providing the needed level of specificity. OPM’s systems were not designed or built to perform analyses of vast quantities of data. Therefore, based on OMB's predetermined root cause categories, only the category "failure to access data" applies. There are overpayments within the agency’s control that are are the result of annuitant's family members and other sources failing to report annuitant's death. The overpayments are considered to be within the agency's control because RS has access to the death master file but does not access for each recurring payment. However, as our on-going internal control activities, OPM conducts surveys and matches to mitigate potential improper payments resulting from these events. OPM conducts two matches to identify discrepancies that may exist between the OPM annuity roll and the Social Security Administration’s (SSA) pay system. The Consolidated Death Match (CDM) is compared with OPM’s annuity roll weekly to identify annuitants who are reported as deceased by SSA. The Validated Agency Match System processes the death information in order to terminate Federal benefits and prevent subsequent improper payments. Collection actions are initiated for any overpayments that are discovered. The SSA Death Master File (DMF) match is conducted yearly and is also compared with OPM’s annuity roll and the SSA Death Master File (DMF). OPM also utilizes Treasury's Do Not Pay Portal to identify annuitants that should have been reported as deceased. Using these mechanisms, in FY 2023 Retirement Services collected $208.5 million in improper payments.
    FY2023 Q4
    Completed
    Training
    OPM’s annuity calculations have automated and manual components. The manual components are subject to human error. Errors can include entering incorrect effective dates, salary rates, and/or tours of duty, which all impact annuity calculations. Identifying specific skill gaps and developing target training improves accuracy which affects improper payments.
    FY2024
    Planned
    Audit
    RS plans to continue receiving the robust and comprehensive Death Master File under a separate agreement with SSA (checking). RS uses an automated process to match against the data provided in the Death Master File and the Consolidated Death Match. In addition, the Quality Assurance Group will continue to provide feedback through monthly and formal quarterly reports with recommendations, if applicable. These reports will provide specific analysis meant to discover trends that may not be discernible in any given month. The information gained through these audits will be used to make informed decisions regarding resources and to ensure compliance with policies and procedures governing the determination and payment of benefits.
    FY2024
    Planned

Overpayments

Overpayments within the agency’s control are generally the result of antiquated systems that fail to automate the processing of available intra-agency data while the payments are being processed. Additionally, the outdated systems fail to provide large quantities of specific data in order to pinpoint risk areas of improper payments. For example, overpayments occurred because the death data isn’t directly linked to the payment file to allow for immediate suspension of accounts. The overpayments are considered to be within the agency’s control because RS has access to the death data. The agency has put measures in place to mitigate improper payments to include annuitant surveys sent electronically or by mail to solicit eligibility. It also conducts a Consolidated Death Match (CDM), comparing the annuity roll to the full death master file from SSA on a weekly cadence, suspending and dropping accounts on the list that fail to respond to notices. The agency also utilizes Bureau of Fiscal Services’ Do Not Pay (DNP) portal, conducting monthly searches of annuitants who are reported as deceased through the death data sources (i.e. EVVE-FOD, DOD, DOS, AIS-OBIT, AIS-PROB, PACER, DMF-Public), verifying death and stopping further payments.
Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $224.33 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $224.33 M

Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $0 M

Overpayment type Eligibility element/information needed Eligibility amount
Overpayments Within Agency Control Deceased $224.33 M

Overpayment type Mitigation strategies taken Mitigation strategies planned
Overpayments within the agency’s control Audit, Training Audit, Training

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $113.22 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $113.22 M

Eligibility element/information needed Eligibility amount
Education $113.22 M

Mitigation strategies taken Mitigation strategies planned
Audit, Training Audit, Training

Technically improper payments

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

Additional information

$113.22 M

Unknown Payment Details

Payments are unknown when it is discovered that additional information is needed to determine if the recipient is receiving the correct monthly benefit. Insufficient evidence can also result in unknown payments. Insufficient or missing information that affect the average salary and length of service are the most common reasons for unknown payments.

The amount of payments that could either be proper or improper but the agency is unable to determine whether they were proper or improper as a result of insufficient or lack of documentation is $23.5 M


Cause of insufficient or lack of documentation & why the documentation is needed for determination of payment type
Payment cause Amount Description of the documentation that was not provided and explanation of why the program is unable to conclude whether the payment is proper or improper without that documentation
Other $23.5 M Federal agencies are required to provide complete retirement packages. Through audits, the Quality Assurance Group identifies retirement claims that need additional information or clarification to determine if a recipient is receiving the correct monthly benefit. Insufficient or missing evidence can result in unknown payments. These types of errors can impact the amount of the improper payment amount. The improper payment amount is also impacted by the length of time it takes to receive sufficient information. The payment cannot be moved out of the unknown category and classified as proper or improper until all necessary documentation is received.

Mitigation strategies taken Mitigation strategies planned
Audit,Training Audit,Training

Evaluation of corrective actions

An upgrade to the current legacy system is needed to properly categorize the root causes of improper payments. A Retirement Services Information Technology Modernization Plan has been created. OPM sought to obtain funding via the Technology Modernization Fund (TMF) but was recently denied.
Retirement Services leadership continues to be committed to modernizing and is currently working to prioritize and identify funding in FY 2024. RS was unable to properly categorize $85.34 million in overpayments. However, Retirement Services uses regular Quality Assurance audits to assess accuracy and the corresponding value of improper payments, as well as to identify any training or systemic deficiencies.

Delayed reporting or sometimes no reporting by the annuitant's family or other sources, can result in an improper payment. OPM conducts two matches to detect deaths that are unreported or delayed reporting of deaths. The Consolidated Death Match (CDM) is compared with OPM’s annuity roll weekly to identify
annuitants who are reported as deceased by the SSA. The Validated Agency Match System processes the death information in order to terminate Federal benefits and prevent subsequent improper payments. Collection actions are initiated for any overpayments that are discovered. The SSA Death Master File
(DMF) match is conducted yearly and is also compared with OPM’s annuity roll and the SSA Death Master File (DMF).

The improper payment rate decreased from FY 2022 to FY 2023 which demonstrates the effectiveness of the current corrective actions.

Future payment integrity outlook

Federal Retirement Services has established a baseline.

RS is committed to the objective of reducing improper payments. OPM set a goal of lowering the improper rate by 0.01 percent for each subsequent year. The current Improper Payment and Unknown Payment rate was 0.38 percent. Therefore, the RS reduction target is 0.37 percent.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $103,327.68 M
Current year +1 estimated future improper payments $351.31 M
Current year +1 estimated future unknown payments $24.46 M
Current year +1 estimated future improper payment and unknown payment rate 0.36 %
Current year +1 estimated future improper payment and unknown payment reduction target 0.37 %

The program's current year improper payment and unknown payment rate of 0.38 % has been achieved with a balance of payment integrity risk and controls and represents the lowest rate that can be achieved without disproportionally increasing another risk, therefore it is the tolerable rate.

The improper payment rate has consistently been at or below 0.38 percent using the existing corrective actions. In the FY 2022 survey, RS predicted that the Improper Payment Rate and Unknown Payment rate would be at or below 0.38 percent for FY 2023. RS has successfully met the predicted expectation. Therefore, 0.38 percent remains the tolerable rate. In addition, the improper payment rate for RS remains significantly below the OMB threshold of 10 percent for non-compliance. OPM will continue to further evaluate the current corrective actions to determine if any can be expanded, resulting in an even lower improper payment rate.

Using the existing internal controls, human capital, and information systems and other infrastructure RS was able to reduce the Improper Payments and Unknown Payments to the tolerable rate. The FY 2023 Improper Payments and Unknown Payments rate is 0.38 percent. The improper payment rate for overpayments was 0.24 percent.

An upgrade to the current legacy system is needed to categorize the root causes of improper payments properly. RS leadership is working on modernization initiatives to prevent improper payments. RS is working with OPM leadership to prioritize and identify funding. An IT Roadmap has been delivered, and the costs to modernize have been assessed through fiscal year 2028.

Additional programmatic information

  • FY 2024 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    10/2023 - 09/2024


    Confidence interval:

    95% to <100%


    Margin of error:

    +/-0.34

  • Actions taken & planned to mitigate improper payments

    Mitigation strategy Description of the corrective action Completion date Status
    Training
    Regular quality assurance audits assess the accuracy of annuity payments, identifying training needs and systemic deficiencies. For instance, targeted training based on audit findings has enhanced staff knowledge and improved accuracy. However, systemic limitations hinder RS from providing specific data analysis, with overpayments largely attributed to failures in reporting annuitant deaths.
    FY2024 Q4
    Completed
    Audit
    RS acknowledges the occurrence of improper payments; however, systemic limitations hinder the provision of detailed specificity. OPM's systems were not designed to analyze large data sets. Consequently, based on OMB's established root cause categories, only "failure to access data" is applicable. Overpayments within the agency’s purview result from family members or other sources failing to report an annuitant's death. These overpayments are deemed under the agency’s control because RS has access to the Do Not Pay file but is unable to search Do Not Pay prior to each recurring payment. Nevertheless, OPM engages in ongoing internal control activities, including surveys and data matching, to reduce potential improper payments from these occurrences. OPM performed the Consolidated Death Match (CDM) to identify discrepancies between the OPM annuity roll and the Social Security Administration’s (SSA) pay system. This weekly match helps identify annuitants reported deceased by the SSA, while the Validated Agency Match System processes death information to terminate federal benefits and prevent further improper payments. Collection actions are initiated for any discovered overpayments. Additionally, OPM utilizes the Treasury's Do Not Pay Portal to identify annuitants who should have been reported deceased.
    FY2024 Q4
    Completed
    Training
    OPM’s annuity calculations involve both automated and manual components, the latter being susceptible to human error. Mistakes can arise from incorrect entries of effective dates, salary rates, or tours of duty, all of which impact annuity calculations. Identifying specific skill gaps and developing targeted training can enhance accuracy and reduce improper payments.
    FY2025
    Planned
    Audit
    RS plans to use Death Record Confidence Scoring Tool (DRCST). Which is an automated process that matches data from the Death Master File with the Consolidated Death Match. Furthermore, the Quality Assurance Group will maintain feedback through monthly and quarterly reports, offering recommendations as needed. These reports will include specific analyses to uncover trends that may not be immediately apparent, allowing for informed resource decisions and ensuring compliance with policies governing benefit determinations and payments. The Death Record Confidence Scoring Tool (DRC Scoring Tool) is a product used to identify payments at risk of being issued to a deceased payee. The DRC Scoring Tool converts information into a confidence score based on the likelihood the individual is truly deceased. The Office of Payment Integrity at the Department of Treasury then uses the confidence score in combination with payment information within the customer’s dataset to identify the records that have the greatest potential impact for at-risk dollars.
    FY2025
    Planned

Overpayments

Overpayments within the agency's control typically stem from outdated systems that do not automate the processing of available intra-agency data during payment processing. These antiquated systems lack the capability to provide comprehensive data necessary for identifying risk areas related to improper payments. For instance, overpayments often occur because death data is not directly linked to the payment file, preventing immediate account suspensions. Although the agency has access to this death data, overpayments are still considered within our control. To mitigate improper payments, the agency employs several measures, including: Annuitant Surveys: These are sent electronically or by mail to verify eligibility. Do Not Pay (DNP) Portal: Monthly searches are performed to verify deaths reported through various sources (e.g., EVVE-FOD, DOD, DOS) to prevent further payments.
Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $243.7 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $243.7 M

Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $0.0 M

Overpayment type Eligibility element/information needed Eligibility amount
Overpayments Within Agency Control Deceased $243.7 M

Overpayment type Mitigation strategies taken Mitigation strategies planned
Overpayments within the agency’s control Audit, Training Audit, Training

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $93.75 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $93.75 M

Eligibility element/information needed Eligibility amount
Education $93.75 M

Mitigation strategies taken Mitigation strategies planned
Audit, Training Audit, Training

Technically improper payments

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

Additional information

$93.75 M

Unknown Payment Details

Payments may be classified as unknown when additional information is required to confirm the accuracy of a recipient's monthly benefit. Insufficient or missing evidence can also result in unknown payments. More accurate Agency application submissions would potentially mitigate common causes of unknown payments.

The amount of payments that could either be proper or improper but the agency is unable to determine whether they were proper or improper as a result of insufficient or lack of documentation is $11.94 M


Cause of insufficient or lack of documentation & why the documentation is needed for determination of payment type
Payment cause Amount Description of the documentation that was not provided and explanation of why the program is unable to conclude whether the payment is proper or improper without that documentation
Other $11.94 M Federal agencies are required to provide complete retirement packages. Through audits, the Quality Assurance Group identifies retirement claims that need additional information or clarification to determine if a recipient is receiving the correct monthly benefit. Insufficient or missing evidence can result in unknown payments. These types of errors can impact the amount of the improper payment amount. The improper payment amount is also impacted by the length of time it takes to receive sufficient information. The payment cannot be moved out of the unknown category and classified as proper or improper until all necessary documentation is received.

Mitigation strategies taken Mitigation strategies planned
Audit,Training Audit,Training

Evaluation of corrective actions

An upgrade to the current legacy system is necessary to accurately categorize the root causes of improper payments. RS is currently seeking additional funding to enhance process automation. The FY 2025 Congressional Budget Justification includes $6.5 million for improving the online retirement application and digital file system. RS is unable to properly categorize $243.70 million in overpayments. However, regular Quality Assurance audits help assess accuracy and identify any training or systemic deficiencies. Delayed or absent reporting from an annuitant's family or other sources can result in improper payments. The improper payment rate decreased from FY 2023 to FY 2024, demonstrating the effectiveness of current corrective actions.

The corrective actions provided focus on the steps RS has taken to accurately categorize the root causes of improper payments. RS continues to request addition funding from OMB to achieve this goal. The use of Quality Assurance audits help assess accuracy and identify any training or systemic deficiencies. The improper payment rate decreased from FY2023 to FY2024, demonstrates the effectiveness of the current corrective actions.

An upgrade to the current legacy system is necessary to accurately categorize the root causes of improper payments. RS is currently seeking additional funding to enhance process automation. The FY 2025 Congressional Budget Justification includes $6.5 million for improving the online retirement application and digital file system. RS is unable to properly categorize $243.70 million in overpayments. However, regular Quality Assurance audits help assess accuracy and identify any training or systemic deficiencies. Delayed or absent reporting from an annuitant's family or other sources can result in improper payments. The improper payment rate decreased from FY 2023 to FY 2024, demonstrating the effectiveness of current corrective actions.

The corrective actions provided focus on the steps RS has taken to accurately categorize the root causes of improper payments. RS continues to request addition funding from OMB to achieve this goal. The use of Quality Assurance audits help assess accuracy and identify any training or systemic deficiencies. Delayed or absent reporting from an annuitant's family or other sources can result in imroper payments. RS plans to use the Death Record Scoring Tool (DRC Scoring Tool). This tool is a product used to identify payments at risk of being issued to a deceased payee. The goal of adding this tool to the corrective actions is to reduce improper payments. The improper payment rate decreased from FY2023 to FY2024, demonstrates the effectiveness of the current corrective actions.

Future payment integrity outlook

Federal Retirement Services has established a baseline.

RS is committed to the objective of reducing improper payments. OPM set a goal of lowering the improper rate by 0.01 percent for each subsequent year. The current Improper Payment and Unknown Payment rate was 0.33 percent.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $119,872.99 M
Current year +1 estimated future improper payments $371.61 M
Current year +1 estimated future unknown payments $13.15 M
Current year +1 estimated future improper payment and unknown payment rate 0.32 %
Current year +1 estimated future improper payment and unknown payment reduction target 0.31 %

The program's current year improper payment and unknown payment rate of 0.33 % has been achieved with a balance of payment integrity risk and controls and represents the lowest rate that can be achieved without disproportionally increasing another risk, therefore it is the tolerable rate.

The improper payment rate has consistently remained at or below 0.38 percent due to existing corrective actions. In the FY 2023 survey, RS projected that the Improper Payment Rate and Unknown Payment rate would stay at or below 0.37 percent for FY 2024. RS successfully met this expectation, maintaining 0.38 percent as the tolerable rate. Additionally, RS’s improper payment rate remains significantly below the OMB threshold of 10 percent for non-compliance. OPM will continue to evaluate current corrective actions to determine if any can be expanded to further reduce the improper payment rate.

Using the existing internal controls, human capital, and information systems and other infrastructure RS was able to reduce the Improper Payments and Unknown Payments to achieve the tolerable rate. The FY 2024 Improper Payments and Unknown Payments rate is 0.33 percent. The improper payment rate for overpayments was 0.32 percent.

An upgrade to the current legacy system is essential for properly categorizing the root causes of improper payments. RS leadership is actively pursuing modernization initiatives to prevent such payments, collaborating with OPM leadership to prioritize and secure funding. An IT Roadmap has been delivered, with modernization costs assessed through FY 2028.

Additional programmatic information

Accountability for detecting, preventing, and recovering improper payments

The Retirement Services Associate Director is accountable for the improper payment rate. This criteria is an item included in the annual performance appraisal. In addition, RS operation managers are held accountable for achieving accuracy in the initial adjudication of claims. The Quality Assurance audit results provide the accuracy rate. Another step taken is the Annual Assurance Statement and Management Controls. The Retirment Services Associate Director sign a memo statement that she is aware of the internal controls and meeting the requirements of the Federal Managers' Financial Integrity Act (FMFIA)

  • FY 2025 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    10/2024 - 09/2025


    Confidence interval:

    95% to <100%


    Margin of error:

    +/-0.41

Causes

RS acknowledges the occurrence of improper payments; however, systemic limitations hinder the provision of detailed specificity. OPM's systems were not designed to analyze large data sets. Consequently, based on OMB's established root cause categories, only "failure to access data" is applicable. Overpayments within the agency’s purview result from family members or other sources failing to report an annuitant's death. These overpayments are deemed under the agency’s control because RS has access to the Do Not Pay file but is unable to search Do Not Pay prior to each recurring payment. Nevertheless, OPM engages in ongoing internal control activities, including surveys and data matching, to reduce potential improper payments from these occurrences.

Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $265.22 M
Amount of overpayments outside the agency's control $0.0 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
Amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
Amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $265.22 M

Underpayment root cause Underpayment amount
Amount of underpayments $98.76 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $98.76 M

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

The amount that could either be proper or improper but the agency is unable to determine whether it was proper or improper as a result of insufficient or lack of documentation $13.99 M

Prevention

OPM performed the Consolidated Death Match (CDM) to identify discrepancies between the OPM annuity roll and the Social Security Administration’s (SSA) pay system. This weekly match helps identify annuitants reported deceased by the SSA, while the Validated Agency Match System processes death information to terminate federal benefits and prevent further improper payments. Collection actions are initiated for any discovered overpayments. Additionally, OPM utilizes the Treasury's Do Not Pay Portal to identify annuitants who should have been reported deceased.
OPM’s annuity calculations involve both automated and manual components, the latter being susceptible to human error. Mistakes can arise from incorrect entries of effective dates, salary rates, or tours of duty, all of which impact annuity calculations. Identifying specific skill gaps and developing targeted training can enhance accuracy and reduce improper payments.
RS uses the Death Record Confidence Scoring Tool (DRCST), which is an automated process that matches data from the Death Master File with the Consolidated Death Match. Furthermore, the Quality Assurance Group will maintain feedback through monthly and quarterly reports, offering recommendations as needed. These reports will include specific analyses to uncover trends that may not be immediately apparent, allowing for informed resource decisions and ensuring compliance with policies governing benefit determinations and payments. The Death Record Confidence Scoring Tool (DRC Scoring Tool) is a product used to identify payments at risk of being issued to a deceased payee. The DRC Scoring Tool converts information into a confidence score based on the likelihood the individual is truly deceased. The Office of Payment Integrity at the Department of the Treasury then uses the confidence score in combination with payment information within the customer’s dataset to identify the records that have the greatest potential impact for at-risk dollars.
An upgrade to the current legacy system is necessary to accurately categorize the root causes of improper payments. In FY 2026 OPM, through RS will continue to advance its modernization agenda, focusing on deploying digital tools to improve service delivery. The modernization effort centers on four key components: the Online Retirement Application (ORA), Employee Retirement Record (ERR), Digital File System (DFS), and the Janus retirement calculator. Together these innovations will dramatically streamline operations and improve service delivery while reducing costs. RS is unable to properly categorize $265.22 million in overpayments. However, regular Quality Assurance audits help assess accuracy and identify any training or systemic deficiencies. Delayed or absent reporting from an annuitant's family or other sources can result in improper payments.

Although Retirement Services is unable to fully categorize $265.22 million in overpayments, corrective actions within the agency have been implemented using a risk-based approach that prioritizes causes associated with improper and unknown payment rates. Retirement Services coordinates corrective efforts across program, policy, and technology functions to ensure actions are timely, measurable, and aligned with identified deficiencies. Modernization initiatives are prioritized to address system limitations that impede accurate payment processing, while interim controls such as quality assurance reviews, management oversight, and staff training are applied to mitigate risk during implementation. These actions are tracked through established governance and reporting processes to ensure accountability and consistent execution.

The corrective actions are specifically focused on addressing the underlying causes of improper and unknown payments, including manual processing, delayed reporting, insufficient documentation, and legacy system constraints. System modernization, enhanced data integration, and strengthened quality assurance controls are adequate to address both the magnitude and complexity of the identified risks. Ongoing audits and monitoring indicate improvements in payment accuracy and increased visibility into error trends, allowing management to further refine corrective actions. While some improper and unknown payments persist due to factors outside the agency’s direct control, such as delayed third-party reporting, the actions implemented to date are reducing risk exposure and are expected to continue lowering improper and unknown payment amounts as modernization efforts mature.

Payment type Mitigation strategies taken Mitigation strategies planned
Overpayments Audit, Training Audit, Training
Underpayments Audit, Training Audit, Training
Unknown payments Audit,Training Audit,Training

Eligibility element/information needed Description of the eligbility element/information
Death Date of death of the recipient/beneficiary
Education The education level or enrollment status of the recipient/beneficiary

Additional information

Reduction target

0.34 %

Using the existing internal controls, human capital, and information systems and other infrastructure RS was able to reduce the Improper Payments and Unknown Payments to achieve the tolerable rate. The FY 2025 Improper Payments and Unknown Payments rate is 0.33 percent. The improper payment rate for overpayments was 0.32 percent.

An upgrade to the current legacy system is essential for properly categorizing the root causes of improper payments. RS leadership is actively pursuing modernization initiatives to prevent such payments, collaborating with OPM leadership to prioritize and secure funding. An IT Roadmap has been delivered, with modernization costs assessed through FY 2028.

The Retirement Services Associate Director is accountable for the improper payment rate. This criteria is an item included in the annual performance appraisal. In addition, RS operation managers are held accountable for achieving accuracy in the initial adjudication of claims. The Quality Assurance audit results provide the accuracy rate. Another step taken is the Annual Assurance Statement and Management Controls. The Retirement Services Associate Director signs a memo statement that aware of the internal controls and meeting the requirements of the Federal Managers' Financial Integrity Act (FMFIA).

$98.76 M