The Office of Personnel Management (OPM) has undergone one of the largest workforce reductions in its history while simultaneously modernizing the federal retirement application process.
According to a recent Government Accountability Office (GAO) report, OPM’s workforce declined by approximately 35 percent between December 2024 and March 2026. At the same time, the agency continues replacing its decades-old paper retirement system with a fully digital process designed to improve efficiency and customer service.
For federal employees planning to retire, these developments raise an important question: Could fewer employees at OPM affect retirement application processing?
There is no evidence that retirement benefits themselves are at risk. However, staffing reductions combined with ongoing modernization could influence how quickly retirement claims are processed during the transition.
OPM Has Reduced Its Workforce Significantly
The GAO recently examined workforce changes across several federal agencies and found that OPM experienced one of the largest staffing reductions in government.
Between December 2024 and March 2026, OPM’s workforce declined by approximately 35 percent. The report also noted that many employees who left had more than a decade of federal experience, representing a substantial loss of institutional knowledge. Although OPM has stated that it intends to continue meeting its mission through organizational changes and modernization efforts, fewer employees inevitably raise questions about workload and operational capacity.
Retirement Processing Is Already a Complex Operation
Civilian federal employee retirement applications require detailed review before an annuity can be finalized. OPM must verify an employee’s service history, retirement coverage, military service credit when applicable, deposits and redeposits, survivor elections, health and life insurance eligibility, and other factors before issuing a final retirement determination.
Although OPM has made significant progress modernizing the process, retirement adjudication remains one of the agency’s most labor-intensive responsibilities.
Digital Modernization Could Offset Some Staffing Losses
Earlier this month, OPM announced what it called the “Last Day of Paper,” marking the transition from paper retirement files to a fully digital retirement processing system.
For decades, retirement claims relied heavily on paper records that were physically assembled, shipped, and reviewed. The new electronic process is intended to reduce manual handling, improve document tracking, and shorten processing times over the long term. If the modernization performs as expected, technology could eventually help offset some of the operational challenges created by a smaller workforce. However, large technology transitions often involve temporary adjustments before the full benefits are realized.
What Could This Mean for Employees Planning to Retire?
No one can say with certainty whether retirement processing times will increase. Several factors will influence processing over the coming months, including:
- The total number of retirement applications submitted.
- How quickly OPM’s digital retirement platform reaches full operational efficiency.
- Staffing levels within OPM’s Retirement Services organization.
- The completeness of retirement packages submitted by employing agencies.
Rather than assuming delays are inevitable, employees should recognize that OPM is managing two major changes at the same time: a significantly smaller workforce and a complete modernization of retirement processing.
What Current Retirees Should Know
For most retirees already receiving their monthly annuity payments, these workforce changes are unlikely to affect ongoing benefit payments. However, retirees with pending actions—such as final retirement adjudication, survivor benefit claims, corrections to service records, or other retirement-related requests—could experience varying response times depending on workload and staffing levels.
What Employees Can Do Before Retiring
While employees cannot influence OPM’s staffing levels, they can help minimize avoidable delays by ensuring their retirement application is complete before separating from federal service. Preparing early can make a meaningful difference.
Employees should review their Official Personnel Folder, verify all periods of creditable service, complete any required military service deposits, confirm insurance elections, and work closely with their agency’s human resources office before submitting retirement paperwork. Incomplete or inaccurate retirement packages often require additional review, which can extend processing regardless of overall staffing levels.
Looking Ahead
The coming months will provide a clearer picture of how OPM balances workforce reductions with its new digital retirement processing system. If modernization delivers the efficiencies OPM expects, processing times could improve despite having fewer employees. If implementation proves more challenging, temporary delays may continue while new systems and workflows mature. For federal employees approaching retirement, the most practical approach is to plan ahead, submit a complete retirement package, and allow sufficient time for processing.