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OPM Cut a Third of Its Own Workforce — Here's What That Means for Your Benefits

deferred resignation federal news federal retirement mspb opm Jul 22, 2026

The agency that runs your retirement, your health insurance, and your federal HR records has cut its own staff by roughly a third since the end of 2024 — and a new government watchdog report says the loss is already slowing the agency down.

What the GAO Report Found

A July 2026 Government Accountability Office report found that the Office of Personnel Management (OPM) reduced its workforce by about 35% between December 2024 and March 2026. More than half of the employees who left had 11 or more years of service — the kind of institutional knowledge that is hard to replace. Roughly 60% left through OPM's deferred resignation program (DRP), and about 10% through reductions in force.

GAO's report was blunt about the consequences, warning that the cuts have "reduced institutional knowledge and operational capacity" at the agency. Two numbers stand out: OPM's retirement services office — which processes federal retirement claims — lost about 16% of its staff, and the Merit System Accountability and Compliance division lost more than 40%.

Why the Merit System Cut Matters for Appeals

That second number carries extra weight because OPM has proposed shifting some employee appeals away from the Merit Systems Protection Board (MSPB) and routing them through that same Merit System Accountability and Compliance division — the division that just lost more than 40% of its staff. If that proposal moves forward, federal employees with pending or future appeals should watch closely for delays and confirm exactly where and how their case needs to be filed.

Another Deferred Resignation Round — With a Longer Deadline for Some

OPM is currently offering another round of the deferred resignation program to its healthcare and insurance division. Most employees have until July 13 to decide. But employees who are 40 or older have until August 27 — a full six weeks longer.

That gap is not a courtesy; it is federal law. A deferred resignation agreement typically asks an employee to waive legal claims, including age-discrimination claims under the Age Discrimination in Employment Act. The Older Workers Benefit Protection Act requires that any such waiver offered as part of a group exit-incentive program give employees 40 and older at least 45 days to consider it, plus 7 days to revoke it after signing. That's why the deadline for older employees runs later.

What This Means for You

If you are retiring soon or making Open Season changes, build in extra time and keep dated copies of everything you submit — some employees who took last year's DRP say they are still waiting on retirement checks nearly a year later. And if you are weighing a separation offer and you are 40 or older, don't let anyone rush you past your 45-day consideration window or your 7-day revocation period. Once that revocation window closes, a signed waiver is very hard to undo.

Before signing any separation agreement or waiver, it's worth having a federal employment attorney review it. Southworth PC offers a free newsletter with regular updates for federal employees weighing separation decisions.

Legal Disclaimer: This content is for general informational purposes only and does not constitute legal advice. Federal employment situations are fact-specific and time-sensitive. Please consult a qualified federal employment attorney about your specific situation.

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