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U.S.
Office of Personnel Management
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Thank you, President [Charles] Jackson, and other distinguished officials of the National Association of Retired Federal Employees.
I am privileged to have the opportunity to meet with you and continue the special relationship OPM has with NARFE. I am especially pleased to have this opportunity so early in my tenure as Director of OPM.
Although this is the first meeting I have attended as director, we are scarcely strangers. I remember attending a Region 7 meeting with Morey Lewis not so long ago, but unfortunately he did not give me a Broncos hat so I could display psychic foresight today. I understand Morey is not showing similar constraint this week.
This special relationship between OPM and NARFE was fostered by my predecessor, Jim King, and I want to continue and strengthen our partnership through frequent exchange of ideas on ways we can serve our mutual customers.
1997 was an extremely important year, both for you and for us. Fortunately, retirement changes from the Balanced Budget Act were measured and minimal.
For CSRS and FERS employees, there will be a graduated, temporary increase in employee contributions through 2002. For most employing agencies, there will be a one-point-five-one percent [1.51%] increase in the CSRS contribution rate, also through 2002.
More severe proposals did not receive substantial support and were not adopted. Some of the proposals that were not adopted included:
Also included in the Balanced Budget Agreement is the new formula for determining the government's contribution toward the cost of premiums under the Federal Employees Health Benefits (FEHB) Program.
The new Fair Share formula stabilizes the Government's contribution at 72 percent [72%] government-wide; and avoids a cost shift of almost $300 per person per year which was scheduled to take effect in 1999.
The formula guarantees that the government contribution will precisely mirror future changes in average premium rates.
I know that NARFE worked hard in both these areas to preserve the earned benefits of your constituents.
At OPM, we also are working hard on behalf of your constituents. Let me assure you that no one in the federal government is more aware of the importance of improving customer service than we at the Office of Personnel Management.
In speaking with you today, I am very proud of the customer service improvements we have made in recent months. Ed Flynn -- our associate director of the Retirement and Insurance Service, who is here with me today -- is so largely responsible for designing and implementing these improvements
If you are pleased with these changes, I thank you. If you are not pleased, please see Ed.
In October, we unveiled our new toll-free service that allows callers to reach us and use our automated services or talk to a Customer Service Specialist for assistance.
That number is 1-888-767-6738; or, if you prefer acronyms, dial 1-88-US OPM RET.
We opened a new Teleservice Center in Pittsburgh, Pennsylvania in December.
This facility is devoted exclusively to providing customer service by phone, and is currently staffed by 20 employees but will expand to 50.
We plan to be operational at this site and others until 8 p.m. in the Eastern Standard or Eastern Daylight Time Zone, allowing callers in the West to reach us during their business hours.
[I do apologize to those retirees in Alaska, Hawaii and Guam who might have to do a little more time management than our California or Washington state retirees. But overall, I think this is a great improvement.]
If you are wondering why we chose Pittsburgh, I understand it had something to do with the fact that there is a William Flynn Highway in that city.
No, actually it was because Pittsburgh fits in well with existing OPM operations already in place in Pennsylvania near Pittsburgh -- our Boyers Retirement Operations Center.
OPM also has added staff to our Washington Center and installed new technology to provide customers fast and accurate service.
According to our surveys, retirees are pleased with the automated services we have been providing for several years. The following services are available automatically, or callers can elect to speak with a Customer Service Specialist at any time:
Customers can now automatically make Federal and State Tax withholding elections;
New services under development include:
Additional discretionary allotments for any purpose; and contributions to local and national Combined Federal Campaign organizations.
The Federal Employees Health Benefit Program is a very important benefit to federal employees, both active and retired. We are working hard to preserve and expand this program for the benefit of our people.
After several years of holding premium increases to below the cost of inflation, FEHB experienced an average premium increase of eight-point six percent [8.6%] for 1998.
However, the most recent data available (1996) indicates that the FEHB Program continues to be ahead of private sector health care programs with an average premium of $3,700 compared to $3,900.
We negotiated some important health benefit improvements in 1998.
These include: Guaranteed inpatient hospital stays of 48 hours for mastectomies and natural childbirths and 96 hours for caesarian deliveries:
And, consistent with the Mental Health Parity Act, improvements were also made in mental health benefits.
Looking forward to 1999, we expect some moderation in health care cost trends, and further improvements in the mental health coverage.
We also will take a leadership role in assuring that FEHB plans fully adopt the Health Care Consumer Bill of Rights as outlined by the President in his State of the Union address; and that FEHB enrollees are fully informed about their rights under this important initiative.
This years FEHB Open Season for retirees was a great success. For the first time, virtually all activities -- brochure requests, plan information and enrollment changes, for example -- were conducted by the toll-free "Open Season Express".
More than 57,000 enrollment changes and 40,000 brochure requests were made using the new system.
Survey results show that 97 percent [97%] found the Open Season Express system easy to use; and seven out of eight users preferred to use this automated telephone system.
You should know that changes we made were based on NARFE focus groups; groups convened here and in other parts of the country. NARFE input played an important role in this success.
Since you are meeting here in Washington, it is appropriate to note that the second session of the 105th Congress convened in late January, and plans only about 75 actual days in session this election year. So it should be -- shall we say -- an INTERESTING year for legislation.
OPM provides Human Resources Management leadership on legislation to both the Administration and to Congress. We are frequently asked to draft legislation, or analyze proposed legislation.
In the first instance, we hope to accomplish some meaningful human resources management initiatives to balance flexibility and consistency across government.
OPM continues to respond to the changing HRM environment by equipping agencies with the flexible systems they need to manage their human resources strategically while serving the interests of the government as an employer.
We will ensure that benefits evolve appropriately as employment practices evolve, such as the appropriate extensions of benefit coverage to non-permanent employees.
When President Clinton introduced his budget last week, he announced that he intended to submit legislation to rescind the open season which would allow CSRS enrollees to switch to FERS.
He is doing this in the interest of fiscal prudency.
If only 60,000 employees -- or 5 percent [5%] of those eligible -- transfered from CSRS to FERS during an open season it would raise long-term government retirement costs by approximately one billion dollars [$1 billion].
Congress would have to pass this legislation to rescind the open season in order for it not to occur.
Frankly, we do not know what the chances are for that happening and an open season thus being averted.
Whatever happens, OPM will respond appropriately. If the Open Season does not occur, it is important to remember that, at one time or another, everyone who would be covered by the new open season has already had at least one opportunity to elect FERS and chose not to do so.
Let me assure you, however, that If there is an open season, OPM will be ready and agencies will be ready.
OPM will provide agencies with the information and tools they need to provide the best possible service to their customers -- in this case their own employees.
FERS election opportunities are not an unknown event in agencies. Certain employees, primarily CSRS employees with a break in service, have FERS election opportunities on an ongoing basis.
OPM and agencies have experience running open seasons. Every hear, there are two TSP open seasons and an annual FEHB open season.
In support of existing election opportunities, OPM has begun work on an internet site and CD-ROM to make election decision materials universally available. These materials will include an updated computational model.
Another retirement issue that is very important to me and to OPM is helping those employees who were erroneously enrolled in the wrong retirement system over the past decade. We introduced legislation to fix these situations last fall.
There are four principles behind the Administration's proposal to equitably correct retirement coverage errors.
First: the government is a responsible employer.
The second principle guiding our proposed solution is: Choice.
The third principle guiding our proposed solution is: Clarity.
The final principle is: Ease of administration.
As you know, the House Civil Service Subcommittee is crafting its own bill to resolve this situation. We do not feel that bill, in its present form, meets these four principles but may result in unintended and unfortunate complications.
You know how important income security is, and we want to rapidly, fairly and finally resolve this problem for those affected by erroneous enrollment.
OPM therefore wants to develop consensus using the Administration proposal as a framework, but with the understanding that appropriate modifications and fine tuning may be necessary.
On another topic of importance to you, I am aware of NARFE's efforts to have the Government Pension Offset and Windfall Elimination Provisions repealed.
However, since they are current law; since they affect the Social Security System and involve outlays from that system -- you know all too well how difficult it will be to repeal these provisions.
Furthermore, the President is asking for a comprehensive, top-to-bottom review of the Social Security System as a way of assuring its solvency into the future. In fact, he made that a key ingredient in both his State of the Union and Budget messages.
He pledged to apply budgetary surpluses to the Social Security System until fundamental reforms have been made.
The President spoke at Georgetown University just yesterday about Social Security reforms, and he plans a lot of legislative action to preserve and protect Social Security for all Americans.
So the outlook for action on Offset and Windfall Elimination provisions probably is not bright in the short term.
What is bright, I believe, is the economic future and possibilities for All Americans under this President -- and this certainly includes our federal retirees.
Also bright, I believe and trust, will be the continuing relationship between OPM and NARFE.
I believe Federal retirees and their families deserve the highest possible level of service. I look forward to continued cooperation and partnership between OPM and NARFE to support that goal.
And I trust that all of OPM, particularly the Retirement and Insurance Service, will continue the good relationship that now exists and support common goals.
We will continue to hold quarterly meetings to share information, discuss issues, and address concerns that are of interest to the Federal retiree community.
And we will work cooperatively on semi-annual mailings to federal retirees. The first of these goes out shortly after retirement and, I believe, have made a significant contribution to NARFE's membership program.
Not only are we aware of NARFE efforts to increase communication and improve the recruitment and retention of membership -- but, If there is support we are able to provide, we want to assist your efforts.
In short, we want not only to continue but to improve our services to retirees, and are working hard for that goal.
I thank you for the opportunity to be here today. Are there any questions?###
Web page created 11 February 1998