Federal Employees Retirement System Errors Overview
Federal Employees Retirement System (FERS) encompasses various retirement plans with different contribution rates for federal employees. Recent discoveries of coding errors have led to a department-wide review to identify and rectify potential errors affecting thousands of employees. The errors range from assigning employees to incorrect FERS plans to discrepancies in salary payments. Action plans have been set in motion to address these issues.
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CUI Federal Employees Retirement System Errors Taiwanna Smith Director, Benefits, Wage, & NAF Policy February 14, 2023 Controlled by: DCPAS Controlled by: LOB 3 CUI Categories: OPSEC LDC: FED ONLY POC: Taiwanna Smith CUI
CUI Agenda FERS Coverage Determination FERS Plans and Contribution Rates FERS Error Records Review Potential FERS Coding Errors Potential FERS Errors by Component USD, P&R Memo - Federal Employees Retirement System (FERS) Coding Errors Component Requirements DoD Action Plan/Corrective Process Next Steps Questions (2) CUI
CUI FERS Coverage Determination Federal employees are generally covered under two main retirement plans: o Civilian Service Retirement System (CSRS) o Federal Employees Retirement System (FERS.) FERS retirement plan determination was complicated by legislative acts that created three FERS plans with different contribution rates. Office of Personnel Management (OPM) issued coverage determination guidance via Benefits Administration Letters (BAL) o October 3, 2012 BAL 12-104 for FERS-RAE o August 14, 2014 BAL 14-107 for FERS-FRAE. Source: Note: (3) CUI
CUI FERS Plans and Contribution Rates 0.8% employee contribution rate Generally covers employees appointed on Jan 1, 1984, through Dec 31, 2012 FERS FERS RAE 3.1% employee contribution rate Generally covers employees appointed on Jan 1, 2013, through Dec 31, 2013 FERS FRAE 4.4% employee contribution rate Covers employees appointed on or after January 1, 2014 Of the three FERS plans, two are effectively closed to newly hired federal employees FERS and FERS RAE. Source: Note: (4) CUI
CUI FERS Errors Records Review Last year, Department of Navy discovered a large number of FERS coding errors. This discovery prompted a department-wide records review to determine the full scope of potential errors. DCPAS conducted a DCPDS records review and determined that there were approximately 23,000 potential FERS errors department-wide. DCPAS developed a department-wide strategy to inform affected employees and to ensure that all errors are corrected. DCPAS also implemented an action plan for Components/Agencies to identify and correct existing errors. (5) CUI
CUI Potential FERS Coding Errors Components are assigning employees to the incorrect FERS retirement plan resulting in erroneous contribution rates. Affected employees are either receiving an overpayment or underpayment of salary due to the difference in retirement contribution rates. DCPAS ran DCPDS reports to identify potential errors. There were 23,175 employee records identified. DoD FERS Errors by Retirement Plan 14,000 50% 12,000 10,000 8,000 30% 6,000 20% 4,000 2,000 - FERS FERS RAE FERS FRAE FERS Plan 6,948 4,706 11,521 Source: DCPDS Note: Data as of May 31, 2022 (6) CUI
CUI Potential FERS Errors by Component Department-wide 9,000 8,415 WHS 0.85% 8,000 Other 0.06% 7,000 DFAS 3.56% DLA 9.09% 5,955 5,662 6,000 AF AF 25.70% 5,000 Army Navy 4,000 Navy 24.43% DFAS 3,000 DLA 2,106 WHS 2,000 Other Army 36.31% 825 1,000 198 14 - Air Force Army Navy DFAS DLA WHS Other Source: DCPDS Note: Data as of May 31, 2022 (7) CUI
USD, P&R Memo - (FERS) Coding Errors On November 29, 2022, the Under Secretary for Personnel & Readiness issued a memo regarding FERS Coding Errors. The memo directs Components to: Review all of the errors on the FERS Coding Error Report prepared by DCPAS by May 29, 2023. Provide DCPAS, in writing, the name of each current DoD employee who: (1) is presently making overpayments or underpayments of FERS retirement contributions rate; and (2) will require corrective action. (8)
USD, P&R Memo - (FERS) Coding Errors Cont. Components are to notify each affected employee in writing, no later than 5 business days after completing the corrective action, of: (a) The overpayments or underpayments of FERS retirement contributions; (b) Their entitlement to reimbursement from overpayments of retirement contributions or indebtedness to the Federal Government for underpayment of retirement contributions. Inform affected employees of their rights to dispute the debt and provide specific instructions on how to request a debt waiver. Defense Finance and Accounting Service and component debt collection offices may consider suspension of collection for a 6 month period pending employees submission of waiver requests, consistent with Chapter 4, Paragraph 8.4 of DoD FMR, Volume 16. (9)
CUI DoD Action Plan/Corrective Process Implement Mitigation Strategies Status Report 180-day Suspense Validate Records Calculate Debt Issue Formal Notices Components to review the DCPDS report provided by DCPAS. Utilize the data script provided by DCPAS to identify potential FERS retirement code errors. DCPDS Report/Report Formula Components will review all relevant DCPDS records and report affected employees to the Deputy Assistant Secretary of Defense for Civilian Personnel Policy in writing. Component/Agency Records Validation Components will determine whether employee is entitled to reimbursement or indebted to the Federal government. Components will correct actions and work with DFAS to calculate debt. Determine Indebtedness Components will Issue notices within five business days after completion of corrective actions. Components will advise indebted employees of their right to request a debt waiver. Formal Notice to Employee & Corrective Action DCPAS will work with Components to identify best practices, develop and implement mitigation strategies to prevent future errors. Develop Mitigation Strategies (10) CUI
CUI DoD Action Plan/Corrective Process Cont. Records to be included in the review process: Only records identified on original DCPAS error report and the associated actions that are submitted to DFAS on or after 5/31/22. Actions that were submitted prior to that date and are not reflected on the DCPAS error report will not be considered part of this effort. (11) CUI
Next Steps Components should provide monthly updates to DCPAS. Components should also continue to run monthly reports to discover new errors DCPAS will consolidate and report progress of corrective actions to the DASD, CPP. (12)
Questions? (13)
CUI Questions (14) CUI
