Proposed federal benefit reforms, including the removal of the retiree annuity supplement and a shift to a “high-5” annuity formula, may prompt numerous federal workers to retire. Thankfully, a recent Office of Personnel Management (OPM) memo highlights significant upgrades to the retirement processing system.
“Federal retirement is now fully digital,” begins a May 7, 2025, memo from OPM Acting Director Charles Ezell, unveiling “a streamlined, modern, and swift retirement process.” Starting June 2, 2025, all retirement applications and related documents must be submitted online, with paper submissions no longer accepted. Agencies under the National Finance Center (NFC) and Interior Business Center (IBC) must comply, and any paper applications will be returned for digital resubmission. By July 15, 2025, OPM’s new Online Retirement Application (ORA) will handle all applications, offering a faster, user-friendly experience that significantly cuts processing times.
Previous efforts to digitize retirement processing fell short, leaving manual paper-based systems in place. This issue caught the attention of Elon Musk, who directed the Department of Government Efficiency to modernize the process. Joe Gebbia, Airbnb co-founder, joined the effort and shared on X on May 2, 2025, that “for the first time in U.S. government history, 25 employees are retiring exclusively online…This milestone speeds up full pension payments for retirees and shows @USOPM’s rapid progress toward the President’s software modernization Executive Order.”
In Q1 2025, 33,500 federal employees retired, up 13% from the 29,700 who retired in Q1 2024. OPM’s retirement backlog dropped to 16,700, a 4,000-case reduction from March, with an average processing time of 54 days. Gebbia anticipates the new digital system will reduce this to just a few days. According to OPM’s Retirement Quick Guide, the current system requires a 3-5 month wait for full annuity payments after submission.
For personalized assistance navigating federal retirement, consult a Federal Retirement Consultant (FRC®) familiar with your specific benefits.
