Terminating Benefits to Economically Recovered Disability Retirees Should Be More Timely

FPCD-82-46: Published: Jul 9, 1982. Publicly Released: Jul 9, 1982.

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GAO reviewed the Office of Personnel Management's (OPM) administration of the statutory provisions regarding the economic recovery of disability retirees. The review was part of a larger ongoing study of the administration of the civil service retirement system's disability provisions.

The annuity of a disabled retiree under age 60 terminates 1 year after the end of the year in which his earning capacity is restored. Earning capacity is considered to be restored if the retiree's earned income in 2 consecutive years equals at least 80 percent of the current pay of the position occupied at retirement. A retiree's eligibility for benefits must be determined by the end of each calendar year so that ineligible retirees can be removed from the rolls. OPM determines this by surveying disabled retirees each year to obtain earnings data. If a retiree does not respond to the survey, OPM may suspend annuity payments until the retiree's entitlement to continue annuity is established. OPM has made much progress in the administration and timeliness of the surveys; however, more needs to be done. The 1981 survey was completed in February 1982. Because the suspensions were not made at the end of the calendar year, OPM made potentially inappropriate payments for January totaling about $157,000 to retirees who had not provided the data necessary to determine their eligibility. This amount is subject to reduction as additional retirees respond. OPM has taken several steps to improve the timeliness of its economic surveys. However, these milestones apply only to the 1982 survey and have not been incorporated into the formal OPM procedures.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Director of OPM should establish appropriate milestones for conducting future surveys, both for the full and limited surveys.

    Agency Affected: Office of Personnel Management

 

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