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News Release

Monday, September 20, 2004
Contact: Michael Orenstein
Tel: 202-606-2402

OPM Awards New FERCCA Calculator Development Contract; New Financial Counseling Contract Award to be Issued Soon

Director Kay Coles James Responds to Concerns of Federal Employees and Federal Retirees Assigned to the Wrong Civil Service Retirement System

Systems to elevate standard of excellence

Washington, D.C. - U.S. Office of Personnel Management Director Kay Coles James today announced a new contract has been awarded to provide an enhanced calculator, in essence, a software program, to help more than 5,100 federal employees and retirees select a permanent retirement system after being placed into the wrong retirement system many years ago.

A separate contract will be awarded soon to make counselors available to employees and retirees who want individualized financial counseling services before selecting a retirement system.

"I am pleased that a satisfactory conclusion to this issue is in sight," said Charles L. Fallis, President of the National Association of Retired Federal Employees. "NARFE has been at the forefront of FERCCA, and OPM, under Director James' leadership, has taken appropriate steps to ensure that affected federal retirees understand the options before them and are treated with the respect they deserve after years of serving their country as public servants."

With these new contracts, OPM is ensuring that a better level of financial counseling and election packages will be provided to individuals who, through no fault of their own, were mistakenly placed by their employing agencies into the wrong retirement system beginning in January 1987.

James said the first OPM effort did not "reach the standard of excellence OPM established for America's dedicated civil servants and retirees, and it did not meet the standard they deserve." Following a performance review James requested by OPM staff, she redirected the FERCCA project in 2003, which led to new and properly managed contracts. "I believe our increased oversight of this project will be welcomed by those who were impacted. OPM has redoubled our efforts to remedy this situation and to treat our employees and retirees with full respect."

The contract to develop a calculator was awarded September 7, while the counseling services contract is expected to be awarded soon. Each contract is intended to help individuals make an educated decision about their retirement coverage.

James is updating OPM's Congressional oversight and authorization committees on the progress in correcting retirement coverage errors under the Federal Erroneous Retirement Coverage Corrections Act (FERCCA). In a letter sent today, the Director noted that 5,144 current and retired federal employees who registered under FERCCA are eligible to make a decision on which one of two systems they want for retirement coverage. James also writes that more than half of the 11,264 individuals who registered are ineligible under FERCCA because they initially had been placed in the correct retirement system, or their employing agency had transferred them to the right system in a timely manner.

OPM is also notifying registrants of their status under FERCCA and is providing individuals determined to be eligible under the act with a status report and timeline for further action. James said work will be completed one year from the date that election packages and financial counseling contract work begins.

Although eligibility determinations have been completed for all but approximately 200 current and former civil servants who applied for relief under FERCCA, original contract specifications for the counseling program needed to be adjusted to provide the level of outstanding service Director James set for affected individuals.

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