WASHINGTON — The Office of Personnel Management’s own shrinking workforce is the top management challenge facing the agency in fiscal 2027, the agency’s internal watchdog said in a new report, according to the National Active and Retired Federal Employees Association.
The OPM Office of Inspector General’s annual report on the agency’s top management challenges points to sharp staffing losses in 2025, as employees left through the Deferred Resignation Program, reductions in force and departures of probationary and experienced staff, NARFE, which represents current and retired federal workers, reported Nov. 2.
OPM processed nearly 1,000 separation actions last year, according to the association’s summary of the report.
The inspector general flagged strain in the Office of the Chief Information Officer, which the report said has taken on work that contractors once handled, including security operations, while also managing technology modernization, cybersecurity and a rapid push into artificial intelligence. OPM staff told the watchdog they worry about keeping up with cybersecurity fixes and about AI adoption outpacing governance and oversight, according to NARFE.
In Retirement Services, which handles federal retirement benefits, annuitants and survivors face long hold times and unanswered calls, the report found. About 30% of retirement-related contacts to the inspector general’s hotline involve customer service complaints, NARFE said.
OPM leadership views the downsizing as an opportunity to work more efficiently through automation and AI, according to the report as summarized by the association. The inspector general cautioned that the agency is still determining which technologies work, making careful resource management and risk mitigation essential.
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The report names three other challenges: protecting the financial integrity of the trust funds behind the Federal Employees Health Benefits, life insurance and retirement programs; modernizing information technology, including the Federal HR 2.0 initiative; and strengthening governmentwide human capital management.
The full report is posted on Oversight.gov.
This report is based on information from the National Active and Retired Federal Employees Association.
Source: National Active and Retired Federal Employees Association
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