January 2015 NARFE Magazine by NARFE

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COVER STORY

survivor benefits Pay Attention to Details and Consider ‘What Ifs’ Before Retirement

P.24

Volume 91 • Number 1

P.32

CSRS Offset: the third retirement system

P.39

NARFE’s Legislative Program for the 114th Congress

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Plus, earn 1% CASH BACK on your purchases! 2 1 You will earn 3 points for each $1 of net purchases made between November 15, 2014 and January 15, 2015 in any of the following categories: gas, grocery stores, department stores, home improvement stores, travel and dining - when you use your card at restaurants. Merchants who accept Visa are assigned a merchant code based on the type of products and services they sell. NARFE Premier FCU groups similar merchant codes into categories for purposes of making rewards offers to you. NARFE Premier FCU makes every effort to include all relevant merchant codes in its listed categories. However, even though a merchant or the items that it sells may appear to fit within a listed category, the merchant may not have a merchant code that falls within that category. Therefore, purchases with that merchant will not qualify for the stated rewards offer on category purchases.

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WashingTon Watch

Budget ‘Reconciliation’ Procedure Being Dusted Off by New Majority

NARFE-PAC in 2013-14 Election Cycle

Republicans Take the Senate, Gain Seats in the House

Farrell Gets New Post

10 114th Congress Names

Leaders; Chaffetz Chairs Key House Panel

11 NARFE-PAC Makes

Changes for 2015: New Pins, New Giving Levels

12 Training Conference Will Get You Up to Speed on 114th Congress

Cover Story survivor benefits. Pay attention to the details and consider all the “what ifs” of survivor benefits before you retire. NARFE members tell cautionary tales about their decisions.

14 Make a Grass-Roots Advocacy Plan

Columns t

CSRS Offset: the third retirement system. It’s a hybrid, and it may be advantageous.

4 From the President 44 Managing Money 46 The Informed Citizen DEPARTMENTS

16 Questions & Answers 48 For the Record: TSP

Investments, COLA Chart

50 NARFE News 56 The Way We Worked

THE THIRD RETIREMENT

On the Web

visit us online at:

www.narfe.org

special section

39 NARFE’s Legislative

like us on facebook:

NARFE National Headquarters

@narfehq

Program for the 114th Congress

ON THE COVER

Illustration by Bill Pragluski, Critical Stages, LLC

w w w. n a r f e . o r g

january 2015 | Volume 91 | Number 1

Editor Margaret M. Carter Assistant Editor Ken Fanelli Editorial Administrator Toni Vallario

National Active and Retired Federal Employees Association NATIONAL OFFICERS RICHARD G. THISSEN, President; natpres@narfe.org JON DOWIE, Secretary/Treasurer; natsectreas@narfe.org

Graphic Design Charlene Gridley Editorial Board Richard G. Thissen, Jon Dowie

Editorial Office: narfe magazine 606 North Washington St. Alexandria, VA 22314-1914 Phone: 703-838-7760 Fax: 703-838-7781 Email: communications@narfe.org Advertising Sales: Warren Berger Media People Inc. 122 East 42nd St., Suite 1622 New York, NY 10168 Phone: 212-779-7172, ext. 223 Email: wberger@mediapeople.com NARFE for the Visually Impaired On the Telephone: This publication can be heard on the telephone by persons who have trouble seeing or reading the print edition. For more information, contact the National Federation of the Blind NFB-NEWSLINE® service at 866-5047300 or go to www.nfbnewsline.org. On digital audio: Issues of narfe magazine are also available in audio format through the National Library Service for the Blind and Physically Handicapped (NLS). For availability, call 202-727-2142 or your local NLS service provider. The Association, since July 1970, has been classified by the IRS as a tax-exempt labor organization [not a union]; however, dues and gifts or contributions to the Association are not deductible as charitable contributions for income tax purposes.

REGIONAL VICE PRESIDENTS

REGION I James P. Crawford (Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont) Tel: 603-630-5191 Email: seacaptains@metrocast.net REGION II Evelyn Kirby (Delaware, District of Columbia, Maryland, New Jersey and Pennsylvania) Tel: 410-604-1141 Email: ekirby@atlanticbb.net REGION III Jerry Janci (Alabama, Florida, Georgia, Mississippi, Puerto Rico, South Carolina and Virgin Islands) Tel: 662-412-2029 Email: lettermanj@aol.com REGION IV Edward J. Konys (Illinois, Indiana, Michigan, Ohio and Wisconsin) Tel: 937-470-0566 Email: region4vp@gmail.com REGION V Carol R. Ek (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota) Tel: 620-241-1131, CELL: 620-504-2202 Email: ek617@att.net

Here’s How to Contact Us… If you want to:

Join NARFE Call (toll-free): 800-627-3394 or go to: www.narfe.org Change your address, phone number or email Call (toll-free): 800-456-8410 Email: memberrecords@narfe.org

REGION VI Marshall L. Richards (Arkansas, Louisiana, Oklahoma, Republic of Panama and Texas) Tel: 903-660-2784 Email: pappysdad@cobridge.tv REGION VII Rodney L. Adelman (Arizona, Colorado, New Mexico, Utah and Wyoming) Tel: 623-505-4719 Email: narfe7vp@cox.net REGION VIII Helen L. Zajac (California, Guam, Hawaii, Nevada and Republic of Philippines) Tel: 707-644-7565 Email: hlz17@aol.com REGION IX Lanny G. Ross (Alaska, Idaho, Montana, Oregon and Washington) Tel: 360-692-9741 Email: lannyjean@comcast.net REGION X William Shackelford (Kentucky, North Carolina, Tennessee, Virginia and West Virginia) Tel: 703-830-6590, CELL: 703-201-6304 Email: wshack1951@aol.com

For any other NARFE matter:

Call NARFE Headquarters: 703-838-7760 Email: hq@narfe.org Fax: 703-838-7785 Write: NARFE 606 N. Washington St. Alexandria, VA 22314

www.narfe.org

narfe (ISSN 1948-4453) is published monthly by the National Active and Retired Federal Employees Association (NARFE), 606 N. Washington St., Alexandria, VA 22314. Periodicals postage paid at Alexandria, VA, and additional mailing offices. Members: Annual dues includes subscription. Nonmember subscription rate $45. Postmaster: Send address change to: NARFE Attn: Member Records, 606 N. Washington St., Alexandria, VA 22314. To ensure prompt delivery, members should also forward changes of address without delay. Because of the volume involved, NARFE cannot acknowledge nor be responsible for unsolicited pictures and manuscripts, although every reasonable precaution is taken. All submissions become the property of NARFE. Copyright © 2015, NARFE. Advertisements in the magazine are not endorsements of products and/or services by NARFE, unless officially stated in the ad. We shall accept advertising on the same basis as other reputable publications: that is, we shall not knowingly permit a dishonest advertisement to appear in narfe, but at the same time we will not undertake to guarantee the reliability of our advertisers.

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From the President

Bracing for the year ahead

s we look to the New Year, we have many things for which to be thankful − the most significant of

which is that we live in the best country in the world. Even the greatest and oldest continuing democracy on earth, however, has its political challenges. One is the realization that active and retired federal employees will certainly face attacks from politicians on our earned benefits. I want to remind members that while we must be involved in grass-roots advocacy and back candidates of both parties who support NARFE’s positions, success in protecting our benefits dictates that we be nonpartisan in our efforts. As initial steps in implementing the decisions made in August at NARFE’s National Convention in Orlando, we have finalized reorganization of

NARFE Headquarters offices and reduced the number of National Officers from four to two. The new, streamlined organization will allow us to intensively manage our mission of legislative advocacy and ramp up our efforts in membership marketing and acquisition of nondues revenue. NARFE’s new National Executive Board (NEB) recently met at Headquarters for the first time since Convention, and I believe it was a very productive gathering. The Board made decisions that will help the Association better perform its mission, and we approved the 2015 budget. The NEB also approved the first steps in developing a process to move toward the future. I know many of you want change yesterday, and some want little or no change; but we must take a measured approach to reform. It must make sense for today while positioning the Association for attracting a new generation of NARFE members. We will begin the strategic planning process by contracting with a firm to conduct a market analysis to ascertain the needs and expectations of our constituencies, and by hiring an independent professional strategic planner to help us with ongoing planning efforts. This will ensure that the changes identified will be vetted; that we make the best use of our time and resources; and that you, the stakeholders, are kept informed and involved.

Richard G. Thissen NARFE national President natpres@narfe.org

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All appointments must be scheduled through TruHearing. vendors, which may be different from items covered under your Service Benefit Plan or any other applicable federal healthcare program. For hearing aids, acupuncture, chiropractic and vision services, you must exhaust your Service Benefit Plan benefits first. To find out what is covered under your policy, contact the Service Benefit Plan. The products and services described herein are neither offered nor guaranteed under any local Blue company’s contract with the Medicare program. In addition, these items are not subject to the Medicare appeal process. Any disputes regarding these products and services are not subject to the Service Benefit Plan’s Disputed Claims process. Blue Cross Blue Shield Association (BCBSA) may receive payments from Blue365 vendors. Neither the Service Benefit Plan, BCBSA, nor any local Blue company recommends, endorses, warrants or guarantees any specific Blue365 vendor or item. The Service Benefit Plan reserves the right to change, modify, or terminate any item and vendors made available through Blue365, at any time. Blue Cross Blue Shield Association is an association of independent, locally operated Blue Cross and Blue Shield Companies.

Washington Watch

Budget ‘reconciliation’ process being dusted off by new majority

hen the 114th Congress convenes on January 6, majority control of the House and Senate will rest with Republican lawmakers. Finally, an end to the

legislative gridlock on Capitol Hill? Not so fast. Remember, for the past several years, a Democratic majority controlled the Senate, yet few bills or amendments made their way to and through the Senate floor. So why should 2015 be any different? One answer lies in an arcane budget process unknown to most newcomers to Capitol Hill: budget reconciliation. “Reconciliation” is a process through which the House and Senate, by a simple majority vote, can approve major budget legislation. But it is limited to changes in laws governing mandatory spending (funds obligated by the federal government in ways other than the annual appropriations process) and revenues. Of particular interest to NARFE members and our colleagues in the federal and postal employee and retiree community, “mandatory spending” includes retirement benefits under

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both the Civil Service Retirement System and the Federal Employees Retirement System, and the government’s share of annuitant Federal Employees Health Benefits Program costs. Since the first reconciliation bill became law in 1980, the procedure has been used to make changes affecting Medicare; Medicaid; unemployment benefits; food stamps; farm payments; dairy price supports; welfare benefits; federal employee retirement;

Members of the House of Representatives will be sworn in here on January 6 to begin the 114th Congress.

highway spending; block grants; federal loans and subsidies; user fees; and tax rates, credits and deductions — not to mention its use as a tool to enact the Affordable Care Act after Democrats lost their 60th vote in the Senate. The federal civil service community can attest to the effectiveness of the reconciliation process. During the 1980s, the process was used to reduce civil service compensation and benefits by more than $100 billion. The Reconciliation Process. The reconciliation process was enacted as part of the Congressional Budget Act of 1974. It is triggered by agreement on a budget resolution by the House and Senate. The

NARFE-PAC In 2013-14 election cycle OVER THE COURSE of the 2013-2014 election cycle, NARFE-PAC distributed $443,000 to 123 candidates and the four major party committees. Of the individual candidates, 93 won, 24 lost, two remained undecided at press time and four members decided to retire subsequent to the NARFE-PAC distribution. See story, p. 11, on changes to NARFE-PAC in the 2015-2016 election cycle.

budget resolution is a blueprint for spending and revenues for the upcoming fiscal year and beyond. That blueprint takes the form of a concurrent resolution — a legislative vehicle that does not require the approval of the president but is enforced by House and Senate rules. A budget resolution may include reconciliation instructions to the various committees of the House and Senate, requiring them to recommend changes in laws under their respective jurisdictions to meet the terms of the budget resolution. Committees are given a specific deadline by which they must submit their recommendations to the House and Senate Budget Committees. The recommendations are combined into a single, or “omnibus,” reconciliation bill and considered by the House and Senate. Unlike practically all other legislation in the Senate, which requires 60 votes to move forward, reconciliation enjoys unique rules, including a limit on the time a reconciliation bill can be debated and a simple majority needed for passage. With Republicans holding more than 50 seats in the Senate, and with a Republican majority in the House sure to agree to a common budget blueprint, reconciliation is perhaps the most powerful tool in the legislative toolbox on Capitol Hill. As incoming Senate Budget Committee Chairman Jeff Sessions, R-AL, told reporters before the election, “Reconciliation will be a part of what we do.” —By Alan Lopatin, Legislative Counsel

REPUBLICANS TAKE SENATE, GAIN SEATS IN HOUSE

ovember’s midterm elections brought significant gains for Republicans in both the House and the Senate. At press time, Republicans had gained eight seats in the Senate, with one undecided, giving that party 53 or 54 seats — and majority control. This will allow the Senate Republican leadership to set the agenda on the Senate floor and within committees. The GOP also added to its majority in the House, with a net gain of 12 seats. (Three races still were undecided as of the time this issue went to press.) This will give the House Republican leadership greater insulation from dissent within their party without needing to rely on Democratic support to move bills through the lower chamber. Of course, while Republicans gained full control of Congress

and a larger share of the responsibility to govern, divided government remains. Through his first six years, President Obama has used his veto pen only two times. But use of the veto (and the veto threat) is all but certain to increase in the 114th Congress (2015-2016). Also, Senate Republicans still will need Democratic votes to overcome the 60-vote cloture threshold to end filibusters on most legislative action. Will this situation force the two parties to work together in a bipartisan manner more than they have the last four years? Or will congressional dysfunction continue in the 114th Congress? Only time will tell. —By John Hatton, Deputy Legislative Director See p. 39 for NARFE’s Legislative Program for the 114th Congress.

FARRELL GETS NEW POST

hristopher Farrell, who has been a member of the NARFE Legislative Department staff for 25 years, has been named to the new post of senior analyst, working directly under National President Richard G. Thissen. Among his duties, Farrell will work with NARFE leaders in the field on state legislative issues. “We’ve increasingly heard from NARFE legislative leaders on the chapter and federation

levels that they would appreciate some help from Headquarters on important issues arising in state legislatures,” said Thissen. “We are pleased to be able to respond by assigning Chris Farrell to this important new task.” Farrell also will work with Thissen on various data-driven reports and analyses. He will continue to write the monthly “Informed Citizen” column for narfe magazine. He may continue to be reached at cfarrell@narfe.org. w w w. n a r f e . o r g

Washington Watch

114th Congress names leaders; Chaffetz chairs key house panel

s of press time, most of the House and Senate leaders for the 114th Congress had been selected by their respective parties. House Leadership. No surprises came from the House leadership elections, where the current cadre of leaders will remain. With control of the House remaining with the Republican Party, John A. Boehner, R-OH, will remain Speaker of the House in the 114th Congress, while Rep. Kevin McCarthy, R-CA, will remain Majority Leader, a post to which he was elected following the primary defeat of Rep. Eric Cantor, R-VA. The third in line on the Republican side is Rep. Steve Scalise, R-LA, who will serve as the Majority Whip. On the Democratic, or minority, side of the House, Rep. Nancy Pelosi, D-CA, will remain Minority Leader in the next Congress. Rep. Steny H. Hoyer, D-MD, will continue to serve as Minority Whip. House Oversight Committee. The House Oversight and Government Reform Committee, which has jurisdiction over most policies that have an impact on active and retired federal employees, will be getting a new chairman. Rep. Darrell Issa, R-CA, who chaired the committee since the 111th Congress, was ineligible to continue as chairman because of a 1994 Republican Conference rule that limits GOP committee chairs to six years in the posts. The House Republican Steering Committee selected Rep. Jason Chaffetz, R-UT, to serve as the 10

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new chairman of the committee. Chaffetz has served on the committee throughout his six years in Congress. Current Ranking MemChaffetz ber Elijah E. Cummings, D-MD, will remain ranking member of the committee. “Ranking member” is a term used to describe the most senior member of a committee or subcommittee from the minority party. Cummings As of press time, subcommittee assignments hadn’t been released. Policies under the jurisdiction of the Oversight Committee include the retirement contributions of active federal employees, the Federal Employees Health Benefits Program and the Thrift Savings Plan. The committee also has oversight over the administration, and Chaffetz has hinted that ongoing investigations, such as Benghazi, will continue in the new Congress. Leaders of other committees that have an impact on active and retired federal employees are: • House Budget Committee: Chair Tom Price, R-GA; Ranking Member Chris Van Hollen, D-MD. The Budget Committee is responsible for developing the an-

nual budget resolution, which is a mechanism for setting aggregate levels of spending, revenue, the deficit or surplus, and public debt. Its purpose is to create enforceable parameters within which Congress can consider legislation dealing with spending and revenue. Policies included in the budget resolution will highlight the priorities of the two parties. • House Ways and Means Committee: Chair Paul D. Ryan, R-WI; Ranking Member Sander M. Levin, D-MI. The Ways and Means Committee and its counterpart in the Senate, the Finance Committee, are responsible for revenues, including taxes; old-age, survivors and disability insurance; Medicare; and Social Security. Any piece of legislation on the Chained CPI would go through this committee. Senate Leadership. On the Senate side, it’s more of the same. Only now with Republicans in control of the chamber, titles have changed. Former Minority Leader Sen. Mitch McConnell, R-KY, has been elected Majority Leader, and former Minority Whip Sen. John Cornyn, D-TX, will serve as Majority Whip. Sen. Harry Reid, D-NV, will serve the Democratic Party as the Minority Leader. He previously was Majority Leader. Sen. Richard J. Durbin, D-IL, will be Minority Whip. He previously was Majority Whip. Senate committee assignments had not been decided as of press time. —By Jessica Klement, Legislative Director

NARFE-Pac Makes changes for 2015: New Pins, New giving levels

anuary marks the start of tors and encourage more contrithe 114th Congress and butions from NARFE members. a new two-year election NARFE-PAC is a crucial tool to cycle (2015-2016). Threats to fedbuild relationships with and elect eral employee and retiree benefits members of Congress who supare expected to escalate in this port NARFE’s mission. Congress, as legislators focus on Members who contribute will finding ways to balance the budreceive a NARFE-PAC 2015-2016 lapel pin based on five different get and offset sequestration. To begin the new election cycle, giving levels. The giving levels to obtain the pins are: Basic, $25NARFE has made important $49; Bronze, $50-$99; Silver, changes to strengthen NARFE$100-$249; Gold, $250 or more; PAC, the Association’s separate Sustainer: contribute $10 or political action committee. The more a month via credit card. changes are designed to thank 2015-16_PAC_Coupon_2013 Coupon 12/1/14 10:11 AM Page 1 be made over Contributions may NARFE-PAC’s generous contribu-

the course of the 2015-2016 election cycle. Gold-level and monthly Sustainer contributors also will receive a NARFE duffle bag. Signing up for the Sustainer program is an easy one-time process that allows members to give a set amount each month automatically via a credit card. NARFE-PAC’s influence is greatly increased with the growth of the Sustainer program. Please use the coupon below to contribute to NARFE-PAC today! —By Jason Freeman, Political and legislative specialist

NARFE-PAC CONTRIBUTION FORM I would like to be a SUSTAINER and make a monthly credit card contribution to NARFE-PAC of:

q Please charge to my credit card (required for monthly contribution)

q $25/month

Credit Card Information

q $10/month

Monthly contributions of $10 or more qualify you to receive the NARFE-PAC Sustainer lapel pin, along with a NARFE duffle bag.

q Other: ______/month (minimum of $10) OR

Type:

q MasterCard q VISA q Discover q AMEX

Card #:__________________________________

I would like to make a one-time contribution of:

Expiration Date: ____ / ____

q $250 - Gold

Name on Card: ___________________________

(qualifies for Gold lapel pin and duffle bag)

q $100 - Silver (qualifies for Silver lapel pin) q $50 - Bronze (qualifies for Bronze lapel pin) q $25 - Basic (qualifies for Basic lapel pin)

Signature:_______________________________ Date: ___________________________________

q Other: ______

Mail to: National Active and Retired Federal Employees Association Attn: Budget & Finance

q I do not want to receive any gifts for my contribution marked above.

606 North Washington St. | Alexandria, VA 22314

NARFE Member #: ________________________________ Name: __________________________________________ Address: ______________________________________________________________________________________ City: ________________________________________________ State: ____________ ZIP: _________________ Only members of the National Active and Retired Federal Employees Association may contribute to NARFE-PAC. NARFE will neither favor nor disadvantage anyone based on the amount of a contribution or the failure to make a voluntary contribution to this political action fund. NARFE-PAC contributions are not deductible for federal income tax purposes.

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Washington Watch

LEGISLATIVE TRAINING CONFERENCE WILL GET YOU UP TO SPEED ON 114TH CONGRESS

he elections are over, and the new Congress is preparing to convene. Between the fiscal year 2016 budget, raising the debt ceiling and the need to renew funding for the Highway Trust Fund, the first few months of 2015 are going to be busy. And those are just the deadline-driven issues that we know of now! During 2015, NARFE’s grassroots activities will continue to be a vital part of our advocacy efforts. One of the best ways to continue your grass-roots advocacy – or learn where to start – is by attending the 2015 NARFE Legislative Training Conference. The Legislative Training Conference will be held March 14-17 at the Renaissance Arlington Capital View Hotel in Arlington, VA. Training sessions and speakers will focus on the issues facing the federal community on Capitol Hill and on changes in grass-roots advocacy. We will answer the questions that grass-roots leaders frequently ask, including, “How do I work with the offices of members of Congress who oppose NARFE’s agenda at every turn?” and “How do I plan my grass-roots activity?” There also will be a discussion on NARFE-PAC and how it relates to NARFE’s advocacy efforts. Participants will leave with a better understanding of the issues that could have an impact on NARFE members, including postal reform and the Chained CPI, and will learn about threats to the Federal Employees Health Benefits Program and federal

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employees’ defined-benefit retirement program. The Legislative Training

WEBinar planned The NARFE Legislative Department will present a special webinar on January 6 and January 8 on how to make the most of your time at the Legislative Training Conference. To find out more about the webinar, go to www.narfe.org and click on the 2015 Legislative Conference graphic.

Conference builds up to the opportunity to meet with legislators and their staff on Capitol Hill on March 17. Politics is all about relationships, and these meetings can be an important part of the development of the relationship between NARFE and each Capitol Hill office. New this year, the conference will begin with a training session for first-time participants. There also will be a reception on Monday, March 16, where the NARFE Legislative staff will be available to answer questions in a oneon-one format. The reception, capping two days of training and speeches, will ensure participants are ready to advocate on behalf of NARFE. Past participants have said that the networking between attendees is the most valuable part of the Legislative Training Conference. NARFE members can share best practices and lessons learned about their own grass-roots experiences.

Still have questions about whether you should attend? Contact the Legislative Department at leg@narfe.org or call 703838-7760. More information is available on the NARFE Legislative home page, www.narfe.org/ legislation. Register online at www.narfe. org, or complete the registration form on the facing page. Hotel reservations must be made by calling 800-228-9290. (Tell the operator you are attending the “NARFE National Executive Board and Legislative Conference.”) Deadline is February 3. —By Sarah Weissmann, grass-roots program manager

MYTH vs. REALITY Myth: The federal workforce is larger than ever and growing.

Reality: The most recent Bureau of Labor Statistics jobs report reveals the federal workforce is the smallest it has been since 1966. Meanwhile, according to U.S. Census data, the population in the United States has increased from about 197 million people in 1966 to approximately 320 million today, a 62 percent increase. While the U.S. population continues to grow, federal employment has been decreasing.

NARFE 2015 Legislative

TRAINING CONFERENCE

March 14-17, 2015

Registration must be returned by February 3, 2015

REGISTRATION FORM

Each participant must complete a form. Please write legibly.

Name:

o Mr. o Mrs.

o Miss

o Ms. o Dr.

_______________________________ Last

NARFE Membership # ______________________

________________________

___________________________

First

Middle

Name as you would like it to appear on badge: _________________________________________________ Federation or chapter officer title for your badge (choose only one title â&#x20AC;&#x201D; Examples: President, Ohio Federation; or NARFE-PAC Chair, Chapter 192/Raleigh, NC): ___________________________________________ ________________________________________________________________________________________ Home address: ____________________________________________________________________________ ________________________________________________________________________________________ Preferred phone: _____________________________ Email address: ______________________________ Notify in case of emergency: ________________________________________________________________ Name

$175 registration fee is not refundable. Please complete registration form and return with check made payable to NARFE, or charge to your credit card.

Phone number

o Charge to my credit card $____________ o MasterCard

o VISA

Exp. Date ________ / _______ (mm)

(yy)

Name on card (print) ________________________________ Signature ________________________ Date ____________

For Internal Planning Purposes Only:

For Internal Planning of March 17 on Capitol Hill:

Conference meals and events are included for registered attendees. Are you planning on attending the Saturday night dinner? o Yes

o No

Are you planning on attending the breakfasts on Sunday, Monday and Tuesday? o Yes o No Registered attendees may bring guests to all NARFE-provided meals for a separate $175 fee. Will you have a guest? o Yes o No Name of guest(s) _______________________________________________ Is this your first NARFE Legislative Training Conference?

o Yes

o No

I am a(n): o Active Federal Employee o Active Federal Employee Spouse o Annuitant Spouse

o AMEX

Card # ____________________________________________

Mail to: NARFE Legislative Conference Budget & Finance 606 North Washington St. Alexandria, VA 22314-1914

o Annuitant

o Discover

o Survivor Annuitant

Can NARFE include your name, chapter and title on a list of attendees that will be distributed to participants? o Yes o No

Do you plan to ride the NARFE-provided bus to Capitol Hill on March 17? o Yes o No Do you plan to return to the hotel from Capitol Hill on the bus later that afternoon? o Yes o No What time do you plan to leave Capitol Hill? _______________________

Washington Watch

An Open Letter to Advocates: Make a grass-roots advocacy plan

here is an old joke about voting – vote early and vote often. While NARFE does not advocate breaking voting laws, the idea behind the joke can – and should – apply to chapters’ grass-roots advocacy: Advocate early and often. Politics is all about relationships, and the key to effective grass-roots advocacy is building, developing and maintaining relationships with your elected officials. To do that, you should develop a field plan for 2015. Field plans are blueprints that help you set up goals and decide what tactics you will use to reach them. When you are developing your field plan, first set realistic goals. Know your chapter’s limitations, but do not underestimate what it is capable of accomplishing. Part of establishing a goal is to determine which tactics will work best. For example, if one of your goals is to have your member of Congress vote to increase the debt ceiling without paying for it on the backs of the federal community, a tactic might be a letter-writing campaign at your chapter meeting. Before you start getting overly ambitious in your field plan, know your time frame. There are many budget deadlines within the first six months of the 114th Congress (2015-2016). Knowing these deadlines will allow you to plan activities within your chapter while not overwhelming members. The president’s budget will be released February 2. The House and Senate have until April 15 to pass a budget resolution. (For more on the budget process, see

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p. 8.) But before that April date, Congress must increase the debt ceiling and find a fix to the Medicare Doctor Reimbursement Rate (the “doc fix”). In May, the appropriations debate will begin and take us through the summer. While we know these deadlines, we also know that legislation can be considered at any time. Additionally, we know that Congress does not always release details of plans until immediately preceding a vote. This is where building the relationships and creating a field plan become so important. Planning is easier if you know when your legislators will be in the district. Congress traditionally takes breaks, or “recesses,” surrounding holidays, so they will be in their districts around Martin Luther King Jr. Day; Presidents Day; and the Easter and Passover holidays. These are times when you can meet with members in their home offices, host them at your chapter meeting or attend a town hall meeting. If you want to meet with your legislators in March or April when budgets have been released, don’t let that be the first time you tell them that the federal community should not be responsible for further sacrifices. Rather, they should hear from NARFE members in February or March, which might require a letter-writing campaign in January or February. If you want legislators to hear from NARFE members in April, then you have to make sure your chapter members know the issues as early as February or March. If you want NARFE members to

attend a town hall meeting during the April recess, your member of Congress needs to know that NARFE members are paying attention through letters, calls or meetings in February and March. For additional tips, see NARFE’s Field Plan Toolkit at www.narfe. org/heartbeat/resources.cfm, or contact the NARFE Legislative Department staff. Knowing Congress’ schedule and the grass-roots action you will want to take can help you get started. Then work backwards to plan your activities. Before you know it, you will have written a field plan for your 2015 grassroots advocacy. —By Sarah Weissmann, grass-roots program manager

Legislative Resources • Legislative Hotline: A weekly update of legislative news, compiled by the NARFE Legislative Department staff, distributed via email and available by phone (toll-free) at 877-217-8234 and online at www.narfe.org. • Legislative Action Center: A one-stop site to send a letter to Congress, and more, at www.narfe.org.

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Questions & Answers

The following Questions & Answers were compiled by NARFE’s Federal Benefits Service Department staff. NARFE does not provide advice or assistance on legal, financial planning or tax matters.

employees Coverage continues in ‘interim’

I am planning to retire in 2015. Will I have health insurance coverage under the Federal Employees Health Benefits Program (FEHBP) during the time I am receiving interim payments but before my annuity begins?

Your FEHBP health insurance and your Federal Employees’ Group Life Insurance (FEGLI) coverage will continue, even though premiums are not withheld from interim payments. The Office of Personnel Management will begin withholding FEHBP and FEGLI premiums retroactive to the commencing date of your retirement when it has finished processing your retirement application.

Five-year requirement

I understand that, if I decide to carry my Federal Employees Health Benefits Program (FEHBP) cover-

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age into retirement, I must have five years of continuous coverage under an FEHBP plan. Does that mean five years of coverage under FEHBP or under a specific FEHBP plan? For instance, if I have two years in the Kaiser HMO plan under FEHBP, then during Open Season switch to a Blue Cross plan under FEHBP for the next three years, do I have five years of continuous coverage ? When I retire, do my FEHBP premiums go up to cover the portion that the government used to pay?

You are entitled to carry FEHBP coverage into retirement if: • You are entitled to retire on

an immediate annuity under a retirement system for civilian employees (including the Federal Employees Retirement System MRA + 10 retirements); and • You have been continuously enrolled (or covered as a family member) in any FEHBP plan(s) for the five years of service immediately before the date your annuity starts, or for the full period(s) of service since your first opportunity to enroll (if less than five years). This means that you are not required to be enrolled in one FEHBP plan for five years prior to retirement. You may be enrolled in a Kaiser HMO for two years and other FEHBP plans for three years to meet the requirement. Keep in mind, the coverage has to be continuous. There can be no breaks where you were not covered. Your premiums do not increase after you retire unless you are

an employee of the U.S. Postal Service. Postal employees pay a smaller employee share of FEHBP premiums than other federal employees but must pay the same enrollee share as all annuitants in retirement. You receive your annuity once a month, and you will be paying monthly FEHBP premiums instead of bi-weekly.

TSP Early Withdrawal penalty exceptions

I qualify for retirement at age 56. I am currently 56 with 31 years of service. To have enough monthly income, I will have to withdraw around $1,250 a month from my Thrift Savings Plan (TSP) account. My balance is substantial, and I have no concerns of ever depleting it. What is the process to avoid the 10 percent early withdrawal tax penalty? Must I transfer it into a traditional individual retirement account? I have no desire to leave the TSP; it has been very, very good to me!

We have good news for you. An employee who separates from the federal government for retirement after turning age 55 is not subject to the 10 percent tax penalty. As stated in TSP Publication 536: If you receive a TSP distribution before you reach age 59½, in addition to the regular income tax, you may have to pay an early withdrawal penalty tax equal to 10 percent of any taxable portion of the distribution not transferred or rolled over. The additional

10 percent tax generally does not apply to payments that are: • Paid after you separate from service during or after the year you reach age 55; • Annuity payments.

retirees Retirement and Tax law are not the same

In the December 2014 issue of narfe magazine, under the Retiree Q&A “Fate of Retirement Contributions,” the answer given said that after you retire, the amount you contributed to the Civil Service Retirement and Disability Fund is first used to pay your monthly gross annuity. You also said it takes about three years to exhaust your contribution. I don’t know who you had answer this question, but the Office of Personnel Management (OPM) stopped using this method in the 1990s when Congress changed the law governing this method. I retired on December 31, 1995, and when I did my income tax for tax year 1996, the 1040 form called for my total yearly annuity (Line 16a) and my taxable annuity (Line 16b). The amount in 16b was derived from using the “Simplified Method Worksheet.” This worksheet gave me the amount I may reduce my gross annuity. I have been using this method continuously to date and will continue to use this method until I exhaust my retirement contribution, which should be in the next five or six years.

The three-year rule no longer exists.

The question in the December 2014 issue asked about retirement contributions. You are speaking about federal tax law. These are two different sets of laws. Under federal retirement law, contributions made by an employee to the Civil Service Disability and Retirement Fund during his or her career are used after retirement to pay that employee’s monthly gross annuity until the amount they contributed has been exhausted – usually in about three years – after which the retiree’s annuity is paid out of the larger fund. Each time you receive an annuity payment from OPM, it is subtracted from your retirement contributions. If you die prior to exhausting those funds and do not have a spouse or dependent child entitled to an annuity, the remaining contributions are paid to your designated beneficiaries. Federal tax treatment of annuity payments is a different matter. Since 1986, the IRS has treated each monthly annuity payment as two parts: the tax-free part that is a return of your contributions and the taxable part that is the amount of monthly payment that is more than the part that represents your contributions. The tax-free part of your annuity is a set amount calculated using your age at retirement and an actuarial table of payments over your lifetime.

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Questions & Answers

Recouping funds

I saw your question about retirement contributions in the December 2014 issue of narfe magazine. I don’t think the Office of Personnel Management (OPM) should be allowed to make rules that conflict with the Internal Revenue Service (IRS) rules. I don’t think we ever will get our money back from the IRS.

Because you receive a very small portion of your annuity tax-free over a long period of time, you may not live long enough to recoup that money. If you have a surviving spouse and/or dependent children, those moneys will be used to reduce the taxable portion of their annuities. When no one is eligible to receive an annuity, it will be passed on to your estate. Tax returns must be completed after a death. It is important that IRS Publication 721 be consulted as to the process for completing that tax return.

TSP and withholding

I have started receiving payments from my Thrift Savings Plan (TSP) account and want to know if the TSP can pay my state taxes out of my payments?

The TSP does not withhold state or local income tax. However, TSP reports all TSP distributions on Internal Revenue Service form 1099-R to your state of residence if it has an income tax. Because tax rules are complex, you may wish to speak with a tax adviser or with state or local tax officials.

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Social Security and federal annuity I

I retired in January 2014 from the U.S. Postal Service under the Civil Service Retirement System (CSRS). Will the Postal Service reduce my monthly annuity if I file for Social Security benefits? Is there any information that you can refer me to on this issue?

Receipt of earned Social Security benefits will not affect your civil service retirement annuity. However, because you are under CSRS, your Social Security benefits may be reduced under the Windfall Elimination Provision (WEP) of the Social Security law. The WEP does not apply to those who retired under the Federal Employees Retirement System. The Social Security Administration has more information on its website at http://www.ssa.gov/ pubs/EN-05-10045.pdf.

self plus one

You had been so kind to meet with me when I was an “active” NARFE member to counsel me about some retirement benefits. I am now retired and have a question about the Federal Employees Health Benefits Program (FEHBP). I retained my health insurance for my husband and myself. I am enrolled in a high option family plan. When we spoke about the new “self plus one” option (which NARFE has successfully supported), we discussed whether I should move to that category, once it became available. I also have read that it does not get implemented until January 2016.

When do I enroll in a self plus one plan? Will this category have a wide enough member-group that my premium would be lower than for a high option family plan?

You will not be able to enroll in a self plus one plan until the 2015 Open Season when the choice becomes available. As for what the premiums will be, it is not possible to know. Our thoughts are that if the option draws more retirees than active employees, then there will not be much of a premium difference between self plus one and family because retirees cost a great deal more to cover. (They have more doctor visits and more expensive prescription drugs than younger enrollees.) But we won’t know until the Office of Personnel Management finishes its research and negotiates with the plans.

Social Security and Federal Annuity II

I understand that I will get a minimal amount of Social Security when I turn age 62. I retired at 55 under the Civil Service Retirement System (CSRS). I have 12 years under Social Security and plan on applying for it next year when I turn 62. Will my federal retirement annuity be reduced? I am under the assumption that I will not lose any of my federal annuity amount because I had 12 years under Social Security. Can you tell me more?

Your civil service retirement annuity will not be affected in any way by eligibility or receipt of Social

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Questions & Answers

Security benefits unless you were a CSRS Offset employee. CSRS Offset employees paid into both the Civil Service Retirement System and into Social Security while working and retire under the normal CSRS computation. When they reach age 62, the CSRS annuity is reduced by the amount of Social Security benefits earned during the years worked under CSRS Offset as a federal employee. But unless you retired as a CSRS Offset employee, your annuity will not be affected by your receipt of a Social Security benefit. That being said, however, if you are a CSRS retiree, your Social Security benefit likely will be reduced because of the Windfall Elimination Provision (WEP). The reduction applies unless you have 30 years of substantial earnings under Social Security.

Survivor benefits and social security

After I die, will my wife be penalized in any way in her retirement benefits (either her Social Security or survivor benefits) because of my federal service? I ask this because when I began drawing my Social Security benefits at age 63, I lost about 55 percent of my Social Security benefits to the Windfall Elimination Provision (WEP).

Your Social Security benefits were reduced as a result of the WEP, which applies to workers who receive a retirement benefit based upon work where Social Security taxes were not taken out of their pay. The WEP affects many federal, state and local government retirees under older retirement plans 20

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such as the Civil Service Retirement System (CSRS), but it does not affect federal retirees under the newer Federal Employees Retirement System (FERS). Under current law, the reduction of your Social Security benefits due to the WEP does not affect your wife’s own earned Social Security benefits. Nor, under current law, does the WEP reduction to your Social Security benefits have any effect on the full monthly civil service survivor benefits your wife would receive from your federal retirement should you predecease her.

Physicians won’t accept insurance

Recently, when I tried to find a new doctor, and I called several, I was told they do not accept my Federal Employees Health Benefits Program (FEHBP) insurance, only Medicare. I understand I could still make an appointment and pay them out of pocket, submit the bill to my insurance plan afterward and be reimbursed at a nonpreferred provider rate. I have been able to find a doctor, who, for the moment, is still accepting insurance, but I am afraid that, as he gets more and more patients to handle under the Affordable Care Act, he, too, will opt out of accepting insurance.

We don’t know what the future holds on the issue of physician supply and demand. However, your FEHBP plan should be able to provide you with a listing of its preferred providers, either over the telephone or on its website.

Medicare enrollment procedures

I am a retired federal employee under the Civil Service Retirement System. I will turn age 65 in early August. I am enrolled in a MHBP plan under the Federal Employees Health Benefits Program. Will I be notified when I reach Medicare eligibility age that I need to enroll? I do not understand the process, and I hear that there are penalties for not signing up on time.

If you are eligible to receive a Social Security benefit, you automatically will be enrolled in Medicare Part A and Part B at age 65. You will be sent a notice when this happens and given the opportunity to decline the coverage. If you aren’t eligible for a Social Security benefit, you will have to go to a Social Security Office to enroll, or you may enroll online at www.ssa. gov. You have three months prior to your 65th birthday, the month of your 65th birthday and three months after your 65 birthday to enroll without receiving the 10 percent late penalty.

Public Safety Officer tax exclusion

I am a retired U.S. Probation Officer. I would like confirmation of eligibility to exclude up to $3,000 in federal annuity income from federal taxes. This money is withheld from my annuity by the Office of Personnel Management (OPM) to pay my share of Federal Employees Health Benefits Program premiums. It is my understanding that OPM issued a statement on or about June 20, 2006, that retired

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NARFE at Your Service “public safety” officers would be eligible for this benefit. Please advise if I am correct.

As far as we know, the exclusion is still available to qualified retired public safety officers. Internal Revenue Service Publication 721, “Tax Guide to U.S. Civil Service Retirement Benefits,” states: “If you are an eligible retired public safety officer (law enforcement officer, firefighter, chaplain, or member of a rescue squad or ambulance crew), you can elect to exclude from income distributions made from an eligible retirement plan that are used to pay the premiums for accident or health insurance or

long-term care insurance. The premiums can be for coverage for you, your spouse, or dependents. The distribution must be made directly from the plan to the insurance provider. You can exclude from income the smaller of the amount of the insurance premiums or $3,000.” Survivors of slain public safety officers also have tax exclusions they should be aware of.

Headquarters, ATTN: Federal Benefits; or NARFE service officers submit it by email to fedbenefits@narfe.org.

To obtain an answer to a federal benefits question, NARFE members should call 703-838-7760 and ask for the Federal Benefits Service Department; send your question by postal mail to NARFE Headquarters, ATTN: Federal Benefits; or submit it by email to fedbenefits@narfe.org.

are available to answer questions and to assist in helping with a variety of benefit matters. Check your chapter newsletter for the name and phone number of your service officer. For the nearest service officer, call NARFE (toll-free) at:

800-456-8410. NARFE Service Centers also are available in some areas. Use the Service Center listings on the NARFE website,

www. narfe.org.

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Donâ&#x20AC;&#x2122;t Overlook Critical Decisions For many current and former federal employees, a key benefit from a lifetime of federal service is the security of knowing that upon their passing, a significant portion of their good federal benefits will be transferred to their surviving spouse or beneficiary. Unfortunately, due to oversights, different benefit eligibilities and inflexible cutoffs for certain survivor benefits, that sometimes doesnâ&#x20AC;&#x2122;t happen.

Illustration by Bill Pragluski, Critical Stages, LLC

survivor benefits Kenneth McCollum, a former deputy program manager at the U.S. Department of the Navy in Dahlgren, VA, retired in 1994 under the Civil Service Retirement System (CSRS) and married in 1997. However, he failed to notify the Office of Personnel Management (OPM) within two years of his marriage to formally elect to receive a reduced CSRS annuity to provide his wife a survivor annuity. As a result, in 2001, OPM refused to allow him to provide her a survivor annuity and coverage under the Federal Employees Health Benefits Program (FEHBP) when he dies. “The notices of the two-year requirement were set in very small print on the backs of two pay stubs, which I did not read,” says McCollum, who participated in a narfe magazine survey on survivor benefits issues. “I don’t remember anything about this in the [retirement] debriefing.” His subsequent protestations to OPM to forgive his oversight in the interests of his wife did not lead to a reversal. “There was no effort to understand the cause of the issue, just denial because of the two-year notification requirement,” McCollum says. A subsequent appeal to the Merit Systems Protection Board was denied in 2007. Had McCollum made a timely election to OPM, his wife would have been entitled to up to 55 percent of McCollum’s CSRS annuity payments for the rest of her life if he predeceases her, with McCollum’s own benefit reduced by roughly 10 percent while he lives to cover his wife’s future survivor annuity.

Details Matter

If there is a lesson learned, McCollum says, it is that retiring federal employees in preretirement counseling, and through subsequent self-education, must pay attention to all the ramifications of potential life events, notably marriage and divorce, even if they do not apply to the retiree at the time of retirement. McCollum and many others also have learned the painful way that some of the hard numbers that govern eligibility for survivor benefits, many imposed by law, are hard indeed. The two-year marriage notification rule for annuitants is one such number, though OPM officials note that there are some instances in which belated elections have been allowed. 26

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Another is the age 55 in a statutory provision governing survivor annuitant remarriages. Namely, survivor annuities under CSRS and the Federal Employees Retirement System (FERS) terminate if a current or former surviving spouse remarries before the age of 55 (See 5 U.S.C. § 8341(b)(3)(B) (CSRS) and 5 U.S.C. § 8442(d)(1)(B) (FERS)). An exception allows restoration of such benefits for current spouses if they were married for at least 30 years to the deceased employee or annuitant (see 5 U.S.C. § 8341(k)(1) (CSRS) and 5 U.S.C. § 8442(d)(3) (FERS)). Obligated to follow statutory mandates, OPM frequently draws a tough line on such deadlines, says Denise Clark, a Washington, DC, attorney who assists many federal employees and annuitants with benefits issues. “The rules regarding timeliness to file claims and to act upon notices are generally very difficult to overcome unless there is a very, very clear reason why the claim wasn’t filed that makes sense,” Clark says. Some provisions of federal law do attempt to safeguard survivors. In particular, the annuity of a married retiring employee must be reduced to provide a maximum survivor benefit unless the retiree and the spouse jointly waive the spouse’s right to a survivor annuity in writing. An exception exists for this requirement if the spouse’s whereabouts cannot be determined. The retirement application does include an option for the retiring employee to elect a maximum survivor annuity as verification that that is, in fact, what the retiree wants to provide. (See 5 U.S.C. § 8339(j)(1) (CSRS) and 5 U.S.C. § 8416(a) (FERS)). With many of the rules, narrow exceptions and other noteworthy considerations apply. In addition to the 30-year marriage exception to the under-55 remarriage statutory provision described above, if a surviving spouse whose federal benefits were cut off by remarriage before age 55 has a remarriage that ends in death, divorce or annulment, the annuity restarts in the same amount. (See 5 U.S.C. § 8341(g) (CSRS) and 5 U.S.C. § 8442(d)(2) (FERS)). Given such fine points, federal employees, annuitants and their spouses must carefully read full descriptions of the rules and statutes to fully understand them.

Basic Education

A large issue in marriages in which the federal employee or annuitant maintained finances for the couple is that many survivors are not even aware that they are entitled to federal benefits or assume the decedent took necessary actions. “With respect to the need to name a new survivor within two years of marriage, these are often very sad stories – the wife assumes that the husband is taking care of it, and he doesn’t,” says Washington, DC-based federal benefits attorney Edward Passman. Such events underscore the importance of having both partners in a marital or romantic relationship regularly discuss federal benefits and their requirements and deadlines. It is also important that employees make sure they have all of the designation of beneficiary forms completed in their personnel folders and that they are current at retirement, notes Mary Venerable, NARFE California Federation Service Committee chair.

Parsing the Details

When a federal annuitant dies after retirement, a designated and eligible surviving spouse is entitled to an annuity at a percentage of what the annuitant would have received, so long as the annuitant made the required survivor benefit elections and deductions. As noted for CSRS, the maximum survivor amount is 55 percent of base salary. For those under the FERS plan, the survivor annuity for a widow or widower can be either at 50 percent of the retiree’s annuity (i.e., the maximum survivor annuity) or 25 percent of the retiree’s annuity. (See 5 U.S.C. § 8442(a)). Another important requirement is nine months of marriage. Namely, the annuitant must have been married to the spouse for nine months for the spouse to qualify for an annuity under FERS or CSRS, unless a child was born of the marriage or the death of the annuitant was accidental. As for children, under both plans, unmarried children who are dependent upon the employee may receive survivor annuity benefits until they reach age 18, marry or die, or until 22 if they are full-time students attending a recognized school. There is no age limit for benefits to unmarried, disabled dependent children if the

disability occurred before age 18. The guardian or responsible adult for the child may need to work with OPM to ensure that benefits are not discontinued for disabled dependent children, notes Venerable. If the federal employee dies before retiring, different rules apply. A FERS employee who completes 18 months of creditable civilian service and was subject to FERS deductions who dies before retiring entitles an eligible spouse to up to two categories of benefits. The spouse must have been married to him or her for nine months or, if married for less time, a child must have been born of the marriage, or the employee’s death must have been accidental. The first category is the Basic Employee Death Benefit (BEDB), which includes $15,000 (increased by all CSRS cost-of-living adjustments [COLAs] beginning Dec. 1, 1987), plus 50 percent of the employee’s final salary as shown on his or her form SF-50 (or high-three average salary if higher). (See 5 U.S.C. 8442(b)). The effect of the COLAs has been to increase the $15,000 to more than $30,000 currently. This amount can be rolled over to an individual retirement account or paid out in 36 installments, which, given that the BEDB is taxable, can be more desirable from a taxation standpoint. If the deceased FERS employee also completed 10 years of creditable service and died while FERS deductions were occurring, his or her surviving spouse also is entitled to a monthly survivor annuity, computed based on the amount to which the survivor would be entitled had the deceased employee retired on the date of death at 50 percent of the deceased employee’s annuity. A CSRS employee who dies before retiring leaves an annuity (but not a BEDB benefit) to a surviving spouse if he or she completed 18 months’ service and was subject to CSRS deduc-

OPM says that statutes limit its ability to excuse deadline violations.

survivor benefits tions and if the surviving spouse was married to him or her for nine months or, if married for less time, a child was born of the marriage, or the employee’s death was accidental. The benefit amount is 55 percent of the annuity computed as if the employee had retired on disability as of the date of his or her death, including a 40 percent guaranteed minimum. A lump sum that includes the unpaid balance of retirement contributions made by the employee or annuitant to fund his or her FERS or CSRS retirement plan, and not paid out through annuity or survivor annuity payments, also may be payable to designated survivors or other beneficiaries. This lump sum is payable to a designated beneficiary or under the order of precedence, which is to the surviving spouse, then children, then parents and then to several additional categories. As for health benefits, a widow or widower of a deceased retiree or employee who is eligible for a survivor annuity under either CSRS or FERS, and who was covered under a self and family option under the FEHBP at the time of the retiree’s or employee’s death, can continue to participate in the program at the same cost as applies to federal employees and retirees. But those spouses not receiving survivor benefits will lose FEHBP upon the death of the retiree. Notes Venerable: “No survivor benefits means no health insurance after death.” For annuitants who marry or remarry and contact OPM to elect survivor benefits within the two-year limit to enable a survivor benefit for their new spouse, one expensive surprise is that, pursuant to statute, OPM will go back and apply a deduction that would have been subtracted for the new spouse had the annuitant been married at the time of retirement, even though there was no spouse to be covered. One annuitant who retired from the U.S. Department of Veterans Affairs (VA) in 2008 and remarried in 2011, says that when he sought to add the survivor annuity for his new spouse, he discovered that that gap amounted to $34,772 and would result in a permanent $257 per month “actuarial” reduction to his annuity, even if the new marriage ended. When added to the $860 per month standard reduction to enable a survivor annuity, electing a survivor 28

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benefit for his new wife would have reduced his annuity from $8,832 to $7,715 to provide her with a $4,857 survivor’s benefit. “We decided to drop the whole thing and not enroll my new wife as a potential survivor for my CSRS annuity,” the VA annuitant says.

Divorce

Divorce is one of the other major areas of controversy for survivor benefits. Basically, OPM will follow the terms of the divorce decree as to what a former spouse or spouses will receive as survivors of annuitants and deceased employees. If the federal employee divorced before separating from federal service, OPM will require a copy of the divorce decree to process the annuity. However, the onus is on the divorced spouse or his or her legal representative to demonstrate that the divorce decree expressly provides for the surviving ex-spouse to receive a benefit and to provide the divorce decree to OPM to begin receiving the benefit. “You should guide your divorce attorney to the OPM website and make sure they insert the necessary sections from there into the divorce decree,” says Clark. “Also, make sure that you walk through with the divorce attorney what federal benefits are available, and take into account the possibility of a second spouse and detail in the agreement about how survivor benefits will be handled if that occurs.”

Changing Status

Notice to OPM of changed beneficiary status – such as the passing of a survivor – should be done with great clarity as to what life event occurred to whom, and which benefits should and should not be adjusted or eliminated, a number of respondents to the narfe magazine survey noted. Some survey respondents said OPM had made errors in executing the changes that took months to correct. There are also tax considerations posed by federal benefits to survivors, notes David Snell, director of federal benefits service for NARFE. “One issue is how the IRS treats retirement contributions for purposes of taxation,” Snell says. “Part of the monthly annuity is nontaxable as an employee contribution. So when you get to the end of the year, the form 1099-R received by annuitants from OPM describes which amounts

are taxable and which are nontaxable. But they don’t provide that breakout for survivors, who may not be aware that a portion of their survivor annuity benefits are not taxable. They have to look at IRS Publication 721, which shows how U.S. civil service retirees should handle taxable and nontaxable portions and provides a formula to determine the relevant breakdown.” Snell also notes that there are occasions when a survivor might wish to disclaim benefits temporarily, such as to qualify for Medicaid or other benefits that have an income cap. He notes that federal rules allow survivors to waive receipt of benefit, rather than the benefit itself, which enables the beneficiary to reactivate payments at a later date, though payments already waived cannot be recovered.

Social Security

Certain family members may be eligible to

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receive monthly Social Security benefits from a decedent who paid into the system, even before the retirement of that individual, including: 1. A widow or widower can receive full retirement benefits at that individual’s full retirement age, or reduced benefits at 60 or older (age 50 or older if disabled); 2. A widow or widower at any age who is caring for the deceased’s child under age 16 or disabled; 3. An unmarried child of the deceased who is: either younger than age 18 (or up to age 19 if he or she is a full-time student in an elementary or secondary school), or age 18 or older with a disability that began before age 22; 4. A stepchild, grandchild, stepgrandchild or adopted child under certain circumstances; 5. Parents, age 62 or older, who were dependent on the deceased for at least half of their support; and

4/15/14 1:28 PM w w w. n a r f e . o r g 29

survivor benefits 6. A surviving divorced spouse, under certain circumstances. However, federal annuitants who receive a federal annuity based on work where they did not pay Social Security taxes, such as those under CSRS, may see their spouse’s, widow’s or widower’s Social Security benefits reduced by two-thirds of his or her government pension. (See www.ssa.gov/pubs/EN-05-10007.pdf.) Some narfe magazine survey respondents complained that the Government Pension Offset completely eliminated the Social Security survivor benefits they otherwise would have received after their spouse died. In addition, a surviving spouse or child may receive a special lump-sum death payment of $255 if they meet certain requirements.

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death, the funds in a participant’s account are distributed to the beneficiary(ies) indicated on Form TSP3, Designation of Beneficiary. If no form is on file with the TSP, the TSP order of precedence, similar to the rules that states have for distribution of estate assets when decedents do not create wills, takes effect. “If the participant is married and the surviving spouse wants to, he or she can convert the participant’s account to a spousal beneficiary account,” says TSP spokeswoman Kim Weaver. “That allows the surviving spouse to retain the money in the TSP. The surviving spouse cannot contribute new money into the account, but he or she can manage the money in the account.” A guide for beneficiaries is located at www.tsp.gov/PDF/formspubs/tspbk33.pdf and discusses treatment of benefits at death at pages 14-15. —David Tobenkin is a freelance writer based in the greater Washington, DC, area.

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the third retirement system Some federal employees who arenâ&#x20AC;&#x2122;t covered by either CSRS or FERS are eligible for CSRS Offset, which may be advantageous. By Everett A. Chasen

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Most federal employees participate in one of two retirement systems, the Civil Service Retirement System (CSRS) or the Federal Employees Retirement System (FERS). But some are covered by a third system. Increasingly, these employees are heading for retirement.

History of the Hybrid

Before January 1, 1984, CSRS covered all federal employees. Employees covered by CSRS do not have to pay Social Security taxes and were excluded from Social Security coverage. In 1983, Congress required federal employees hired beginning January 1, 1984, to be covered by Social Security. These new hires were provided what was then called CSRS â&#x20AC;&#x153;interimâ&#x20AC;? coverage. In addition, federal employees who had a break in their CSRS coverage of more than a year were also given CSRS interim coverage. Concurrently, Congress was crafting a replacement for CSRS. On June 6, 1986, legislation establishing FERS was enacted. Every federal employee hired since January 1, 1987, has been placed in FERS. The same legislation that established FERS, however, also established a third retirement system for federal employees. That system is known as CSRS Offset retirement. CSRS Offset employees are covered by both CSRS and Social Security. They earn retirement credits under the CSRS formula and have the

w w w. n a r f e . o r g

the third retirement system portability Social Security offers. If they have earned Social Security benefits before or after working for the government, their tenures as federal employees add to those benefits. James Marshall is the owner of Federal Retirement Planning, LLC. Marshall spends the majority of his time teaching classes for federal agencies about retirement, but also enjoys helping federal employees with retirement issues one-on-one. “I’ve noticed an increase in interest in CSRS Offset retirement lately,” he says. “It’s most likely because many employees in this category are drawing closer to their eligibility for retirement. Here we are in 2014, 30 years after the Social Security law went into effect. It makes sense these people want to understand more about their retirement benefits.”

How CSRS Offset Annuities Are Computed

Federal employees eligible for CSRS Offset retirement are typically in one of two situations. Some had a break in federal service after 1983 that lasted longer than a year and also had at least five years of federal civilian service by January 1, 1987. Others were hired into federal civilian jobs before 1984 but did not gain retirement coverage until after 1984. This is usually because they were in temporary positions, which were exempt from CSRS coverage, and were converted into career appointments later. Those in this situation also must have had at least five years of federal service by the beginning of 1987. CSRS Offset retirees have their annuities computed under the same CSRS rules as others, but the annuity from the Office of Personnel Management (OPM) is offset (reduced) when the annuitant becomes eligible for Social Security. CSRS Offset retirees who retire before age 62 receive a full CSRS annuity initially; but when they become eligible to receive Social Security benefits, their annuity is offset by the value of the benefit they earn during their service as CSRS Offset employees. In the situation above, the CSRS Offset annuity is reduced at age 62 regardless of whether the annuitant decides to draw Social Security. The fact that the annuitant is eligible for Social Security is the reason OPM will reduce the annuity accordingly. Although it’s up to the annuitant to 34

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decide when he or she wants to draw Social Security separately, OPM will calculate the reduction to the annuity at this time. If the CSRS Offset retiree isn’t eligible for Social Security because he or she lacks sufficient credits under his or her Social Security work record, then the full CSRS annuity continues. This situation is rare, since most CSRS Offset retirees will have 10 or more years of paying enough Social Security taxes by the time they reach 62. OPM contacts the Social Security Administration (SSA) when the individuals are close to their 62nd birthday to obtain a determination of their entitlement for Social Security benefits. Those who retire at age 62 or later and are already entitled to Social Security have the offsets to their annuities made at retirement. There are two ways in which OPM determines how much of an annuity will be offset at age 62, or on the date of retirement, whichever is later. One way is by subtracting the difference between the amount retirees would receive from Social Security – including the years they had paid Social Security tax (their offset years) – and what they would receive from the years they did not contribute to Social Security (their CSRS years). The other calculation takes the monthly benefit amount retirees would receive from Social Security and multiplies that by the following fraction: the number of years the retiree made contributions to Social Security while in federal service, divided by the number 40. OPM then subtracts the lesser of the two computations from the CSRS annuity amount to determine the offset. The lesser of the two computation methods tends to be the latter. According to Kenneth Zawodny, OPM’s associate director for retirement services, “It would not be accurate to say that CSRS Offset annuities are a more complicated process than calculating regular CSRS or FERS benefits. Rather, it is a bit more time consuming due to the fact that we need to work with SSA to ensure we are providing the annuitant with the accurate benefit amount.” During calendar year 2013, OPM processed 5,545 reductions in annuity for retiring feds who reached age 62. CSRS Offset retirees receive the same cost-ofliving increases as other CSRS retirees, the same pension reductions for early retirement before reaching age 55 and the same retirement

credit for military service as CSRS retirees. Offset retirees who leave the workforce due to disabilities before age 60 receive either the amount of the annuity they have earned or a guaranteed minimum amount. If they are provided with Social Security disability benefits, OPM reduces their benefits by the amount their offset service contributed to the Social Security disability benefit. In addition, those in the CSRS Offset category can take advantage of the Thrift Savings Plan (TSP) to supplement their annuity. Although they do not get any agency contributions, they do get to defer taxes on their contributions and on their TSP earnings.

CSRS or CSRS Offset?

Federal employees don’t usually get a choice whether or not to be in the CSRS or CSRS Offset categories. If they have had a break in service of one year or more, and if they have made contributions to the Social Security fund as part of their government employment, they are no longer eligible for CSRS. Marshall suggests CSRS Offset employees are often pleasantly surprised by the effect on their federal retirement benefits, once they fully understand what they would have received if they had not been CSRS Offset. “When the dust settles and they are eventually collecting two checks (one from OPM and one from SSA), nine times out of 10 they are drawing more income than a CSRS annuitant,” he says. “But since the reduction to the annuity from OPM cannot be more than the value of Social Security earned while employed under CSRS Offset, occasionally they are drawing the same amount of income.” “Basically,” he continues, “the only negative thing for an Offset retiree is for folks who are not ready to draw their Social Security benefits when they turn 62 or on the date of their retirement, whichever is later. That’s where they fall behind their CSRS counterparts, whose annuities are usually unaffected by Social Security.” “Some CSRS Offset retirees who are working elsewhere after retirement from federal service won’t be ready to draw Social Security if they are younger than their SSA full retirement age due to an earnings test,” says Marshall. “Many of these folks aren’t ready to give up their post-retirement jobs just so they can draw Social Security. But

they need to be aware that OPM will still apply the reduction to the annuity when they’re 62.” “The good news is that because they are not drawing their Social Security yet, the amount of this benefit will increase. When they stop working or reach their full retirement age – whichever happens first – they can start drawing a larger Social Security benefit. In this case, it usually doesn’t take very long to catch up and surpass their CSRS counterparts in regard to retirement income.” Marshall points out another advantage CSRS Offset retirees have. Those who have five years or more of offset service before separating for retirement from federal service are exempt from SSA’s Government Pension Offset once they retire, a rule that prevents CSRS employees from collecting any of their spouse’s Social Security payments after retiring. This enables CSRS Offset retirees to collect their spouse’s or former spouse’s higher Social Security benefit amount instead of their own in the event of the spouse’s or former spouse’s death. It also allows Offset retirees and their spouses to take advantage of “couples strategies” to maximize Social Security benefits.

CSRS Offset or FERS?

A more interesting choice is between the CSRS Offset and FERS. Employees who formerly participated in CSRS who are returning to the federal government after a long break in service are usually given six months to decide between the two systems. If your determination period has expired, Marshall says, “You probably made a decision based on the information you had at the time. Be thankful for whatever decision you made and don’t look back,” he advises. “But if you still have a choice between CSRS Offset or FERS, take your time and consider how your decision may affect various federal benefits and options.” “One of the major factors I’d consider is how long I’ll be working when I return to federal service,” he explains. “If I don’t plan on working very long, but at least a year, I’d lean toward CSRS Offset. If I’m thinking of working many more years as a federal employee, I’d want to see what my TSP can potentially do for me under FERS, because of the available agency matching contribution.” w w w. n a r f e . o r g

the third retirement system High-salaried workers might also benefit from selecting FERS. “If I return to the government at a very high level of pay, over $117,000, if I elect FERS, I only pay Social Security taxes up to that wage level. And then the 6.2 percent contribution I would make on the rest of my salary is part of my take-home pay. If I’m a CSRS Offset employee, that contribution goes right back into my CSRS account, so I don’t get to take that money home.”

A New Retiree’s Story

Jim Moore is a federal retiree who was recently given a choice between FERS and CSRS Offset due to an unusual set of circumstances. “When I first signed on at the Department of Veterans Affairs (VA) in 2001, the person who processed my paperwork put me in FERS and didn’t explain to me the difference between FERS and CSRS Offset or where I stood in the system. It turns out you have to sign a page that says you agree to go on FERS. Well, I never did.” Moore, who had a 35-year career in federal service, plus 15 years as a freelance journalist, “wasn’t focusing” on his paychecks or retirement contributions during much of his time at the VA. “About two years ago, when I was looking into retirement, my VA retirement counselor took a deep dive into my records. She called me back and told me I had never signed that paper. Then she told me, ‘You’re not in FERS; you’re in CSRS Offset.’ ” The change meant a huge difference in Moore’s retirement annuity, particularly since he didn’t For further reading: OPM’s website includes a pamphlet on CSRS Offset retirement at www.opm.gov/retirementservices/publications-forms/pamphlets/ri83-19.pdf. James Marshall has written on aspects of CSRS Offset retirement. His work can be found in the “Articles” section of Federal Retirement Planning, LLC’s website at www.federalretirementinfo. com/articles/what-is-csrs-offset. The Social Security Administration (SSA) offers a retirementage calculator for U.S. citizens at www.socialsecurity.gov/ retirement/ageincrease.htm, and a pamphlet titled “How Work Affects Your Benefits” at www.socialsecurity.gov/pubs/ EN-05-10069.pdf. A SSA fact sheet on the Government Pension Offset can be found at www.socialsecurity.gov/pubs/ EN-05-10007.pdf. 36

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have a TSP account set up. “The government was putting some money in there, which I had to give back. That was fine with me, because under FERS, I would have been in real trouble.” Moore’s VA retirement counselor worked hard to reconstruct his retirement contributions, including sorting through paper records from his service as a House and Senate staff member. “(My counselor) helped sort the whole thing out, and OPM did a great job for me,” says Moore. “They eventually compiled a very nice binder of all the paperwork they collected on me from over the years.” “When I retired, I started out getting a small check. OPM warned me I was going to be getting one for a while and that it would take a few months to determine what my offset and final pension would be. I was almost five months on the reduced check, and then I got a lump-sum payment that was the difference between the small check and the check I was supposed to receive. Then they began to send me my regular monthly check.”

What to do if you have questions

OPM, Marshall and Moore are in agreement about what prospective retirees should do if they have questions about their status. “OPM recommends that employees discuss their coverage and any applicable coverage options with their agency’s Human Resource (HR) office. The agency HR office has access to the employee’s personnel folder and can provide counseling based on the individual’s service,” says Zawodny. Adds Marshall, “when it comes to case-by-case reviewing of your retirement options, you should be able to sit down with your agency’s retirement officer, who can address any questions you have. If you can’t get all your questions answered, or if you don’t feel confident in the answers you’re getting, you can always reach out to someone like me later.” And Moore cautions, “Think retirement through. Plan it out, connect with a good HR person and be nice to OPM. Be very, very patient; and have some money to sustain you for about half a year. That would do it for me.” —Everett A. (Ev) Chasen is a writer and a communications consultant, and co-author of the book “The Manager’s Communication Toolbox,” published in 2012 by ASTD Press. He retired from the federal government in 2009 after 35 years of service.

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Special Section

114 NARFE’S LEGISLATIVE PROGRAM FOR THE 114th CONGRESS (2015-2016) NARFE’s Legislative Program for the 114th Congress (2015-2016) was adopted by the membership at the 33rd Biennial National Convention held August 24-28, 2014, in Orlando, FL. NARFE’s Legislative Program provides an extensive and specific enumeration of NARFE’s memberendorsed legislative positions. In pursuing these, NARFE will defend the earned pay, benefits and compensation of federal and postal civilian employees and retirees. NARFE advocacy primarily focuses on the following legislative priorities:

• Protecting federal and postal retirees’ existing

retirement and health benefits from reductions and/or erosion. • Protecting federal civilian and postal employees’ pay, retirement and health benefits. • Protecting the viability, stability and standard of service of established federal government functions. Under the NARFE Bylaws, the National President has the authority to execute Association policy, which

includes the Legislative Program. Under this authority, the National President makes the final legislative policy and strategy decisions based on guidance from the Legislative Program, counsel from the legislative director, and consideration of the views of the National Executive Board and members of the Association. Such counsel and views take on particular importance when, in the absence of specific guidance from the Legislative Program, the National President must use judgment on what is in the best interest of federal workers and annuitants. The interaction between NARFE members at the chapter and federation levels and their members of Congress is critical to achieving the goals set forth in the Legislative Program.

Legislative goals followed by an asterisk * require the introduction of legislation. Language printed in italics is new to the Legislative Program for the 114th Congress.

w w w. n a r f e . o r g

114

retirement

Federal Civil Service Annuities • NARFE supports cost-of-living adjustments (COLAs) for all federally administered retirement programs on a regular annual schedule, computed on the same basis and paid at the same time, regardless of age and/or income level. NARFE opposes across-theboard cuts not required in all federally administered retirement programs. • NARFE supports a Consumer Price Index (CPI) based on the objective analyses of Bureau of Labor Statistics (BLS) professionals, and opposes any politically arbitrary changes in the CPI, including the Chained CPI. • NARFE supports changing the CPI-W to the CPI-E as the standard for determining the annual COLA.* • NARFE supports legislation to repeal the increase in pension contributions of new federal employees, enacted in February 2012 and December 2012, and opposes other future reductions in federal retirement benefits.* • NARFE supports legislation that permits civilian federal employees to deposit bonuses and performance awards in any form into the Thrift Savings Plan (TSP) on a tax-deferred basis.* • NARFE supports legislation to conform the TSP regulations to Internal Revenue Service (IRS) regulations on other qualified retirement savings plans.* • NARFE supports legislation to authorize the Federal Retirement Thrift Investment Board to take legal action to protect the interests of TSP account holders in accordance with its fiduciary responsibilities.* • NARFE supports legislation to enhance deferred federal annuitant retirement benefits.* • NARFE supports legislation to provide retiring federal employees the option of electing and paying the actuarial cost of additional survivor annuity amounts in 5 percent increments, up to 75 percent of an unreduced annuity.* • NARFE supports legislation that would allow the recalculation of retirement annuities for federal employees who have retired since 1994 and who worked in Hawaii, Alaska or the U.S. Territories, and who pay the contributions to the Civil Service Retirement and Disability Fund and income taxes that they would have paid had locality pay been available to them prior to their retirement.* • NARFE supports legislation to provide equitable tax treatment of government retirement benefits comparable with Social Security.* 40

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• NARFE opposes any action that erodes the solvency

of the Civil Service Retirement and Disability Fund (CSRDF) and supports providing full public disclosure of the fiscal stability and financial obligations of the Fund. • NARFE supports legislation on behalf of the diminishing number of Filipino federal annuitants to provide for increased and adequate compensation for services rendered to the government of the United States.* Social Security • NARFE opposes investment of the Social Security reserves in investments other than Treasury securities. • NARFE opposes replacing any portion of Social Security benefits with private individual accounts. • NARFE supports the repeal or reform of the Social Security Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP).* • NARFE supports legislation that would require the Social Security Administration to report annually the amount of WEP penalty to affected individuals.* • NARFE supports indexing the income threshold on taxable Social Security benefits.* • In addition, NARFE is guided by the following six Social Security principles to provide: 1. A benefit people can depend on; 2. Financial security for the disabled, survivors and dependents (i.e., social insurance); 3. Universal and fair coverage; 4. Deliberate redistribution of benefits to lower income beneficiaries; 5. Efficient administration of the program (less than 1 percent overhead costs); and 6. Full cost-of-living adjustments (COLAs). federal employee pay, Job security and other benefits

• NARFE supports full implementation of federal

employee pay parity as reflected in the Federal Employees Pay Comparability Act of 1990 (P.L. 101-509). • NARFE supports legislation that would afford federal employees serving in combat zones the same tax treatment as their military counterparts.* • NARFE supports providing federal employees paid parental leave.* • NARFE opposes legislation to arbitrarily decrease Federal Employees’ Compensation Act (FECA) benefits. • NARFE opposes policies on contracting out of federal

jobs that put employees at a disadvantage in the competitive process. • NARFE opposes proposals that would privatize inherently governmental functions. • NARFE specifically opposes contracting out the processing and maintenance of federal personnel records. health care Federal Employees Health Benefits Program The Federal Employees Health Benefits Program (FEHBP) is the nation’s most efficiently administered and cost-effective employer-sponsored health insurance plan, providing coverage to employees, retirees, and their spouses and dependents. As such, NARFE will continue to actively participate in discussions with the Office of Personnel Management (OPM) regarding premiums, coverage, terms, conditions and marketing of FEHBP plans. To maintain affordability and integrity of the program, NARFE supports: • Legislation that would ensure all FEHBP enrollees receive the same level of prescription drug coverage, by plan;* • Allowing the federal government to offer federal employees enrolled in Flexible Spending Accounts (FSAs) the option to carry over $500 per calendar year, as offered by private-sector employers; • Legislation to amend Section 125 of the tax code to allow federal retirees and survivors to pay: 1. Their share of FEHBP and other employer-sponsored health insurance premiums with pretax annuities;* and 2. Health care costs not covered by traditional health insurance and child and adult dependent care with pretax annuities deposited by annuitants in Flexible Spending Accounts (FSAs).* • Efforts to contain FEHBP costs, including initiatives to rein in prescription drug expenses, particularly the use of the federal supply schedule by FEHBP plans to purchase prescription drugs on behalf of enrollees. To protect the program, NARFE opposes: • Reductions in government contributions toward FEHBP premiums; • Authorizing, encouraging or forcing participants into Health Savings Accounts, Medicare Savings Accounts, Medical Savings Accounts, “customerdriven,” “consumer-driven” or “patient-directed” plans in the FEHBP;

• Broadening participation in FEHBP, unless separate risk pools are created;

• Requiring federal agencies to prefund the government/

employer’s share of post-retirement FEHBP premiums for their current employees; • Risk segmentation of FEHBP participants based on age or Medicare enrollment; • Proposals that would allow Flexible Spending Accounts (FSAs) to be used in conjunction with high-deductible catastrophic health insurance to form an alternative version of a Health Savings Account; • Increases in the enrollee co-payment for purchase of prescription drugs in FEHBP by federal annuitants who participate in Medicare; and • The Office of Personnel Management’s decision to forgo the Medicare employer subsidy to which the FEHBP is entitled. NARFE will actively pursue the subsidy for the purpose of offsetting FEHBP premiums charged to the government/employer and all enrollees. Medicare NARFE supports: • Protecting Medicare’s guarantee of basic health security for older Americans at affordable and predictable prices; • Preserving the current Medicare fee-for-service program, including the ability to select the physician of your choice; • Ensuring that the Medicare drug program does not require beneficiaries who receive such coverage through other insurance to pay additional premiums.* • Repeal of means-testing of Medicare premiums;* • Reducing the penalty imposed on those who do not enroll in Medicare Part B at the time they become eligible;* • Enhancing Medicare prescription drug coverage, including authority for the federal government to negotiate drug prices for the entire program; simplify and stabilize coverage; and provide equal coverage throughout the United States and its territories;* and • Allowing pharmacies to buy prescription drugs from pharmaceutical manufacturers for Medicare beneficiaries at the same average discount available in industrialized countries.* NARFE opposes: • Means-testing cost-sharing requirements; • Increasing the Medicare eligibility age; • Requiring home health care co-payments; • Proposals that would give private Medicare plans an w w w. n a r f e . o r g

114 unfair competitive advantage over the current Medicare fee-for-service program and undermine the present program’s ability to share health care costs over a wide community of coverage; and • Proposals that limit the government’s share of Medicare premiums through a formula that does not accurately reflect the costs of providing health care to beneficiaries. Long-Term Care • NARFE supports the integrity and affordability of the Federal Long Term Care Insurance Program (FLTCIP). • NARFE supports the guarantee of long-term care benefits for individuals presently eligible for Medicaid, adequate state and federal contributions to Medicaid to finance program needs, and standards of care and safety that all providers must follow in order to receive reimbursement. • NARFE supports proposals to develop and coordinate a comprehensive long-term care policy that would include public and private initiatives that address financing, choices and quality service. • NARFE opposes further limitations on, and supports easing, asset rules that prevent severely disabled persons from qualifying and receiving Medicaid longterm care benefits.* • NARFE supports tax relief for the purchase of longterm care insurance, family caregiving and other long-term care expenses.* • NARFE supports proposals that would help individuals who cannot afford long-term care insurance or have a need for long-term care to receive such services without impoverishing themselves or their spouses.* • NARFE supports nursing home reform, including efforts to ensure that long-term care facilities are adequately staffed with experienced professionals in the medical disciplines of gerontology and nursing, and that such individuals continue to receive training and are adequately compensated.* DID YOU KNOW? NARFE has an effective and highly regarded team of lobbyists who work on behalf of federal employees, retirees and their survivors.

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U.S. Postal Service Reform

• NARFE supports legislation to maintain six deliv-

ery days per week by the U.S. Postal Service (USPS) nationwide.* • NARFE will join with other federal and postal organizations to seek legislation to keep small post offices open throughout the United States.* • NARFE supports legislation to relieve the U.S. Postal Service of its overly burdensome requirement to prefund over 10 years (from 2007 to 2016) its future retiree health care obligations that are estimated to accrue over the next 75 years.* • NARFE supports legislation to allow the Office of Personnel Management to make payments for any refund due to the USPS from the Civil Service Retirement and Disability Fund (CSRDF), on the condition that such payments would not result in the reduction of federal annuities paid to retirees and survivors.* other provisions

• NARFE supports legislation permitting drugs made

in the United States or other industrialized countries, and exported to third-party industrialized countries, to be reimported, or imported, to the United States, and preventing pharmaceutical manufacturers from limiting the sale of drugs to other countries for the purpose of discouraging reimportation.* • NARFE supports legislation that would provide comprehensive patient protections to consumers enrolled in health plans regulated by federal and state law, and also would allow such individuals to sue their plans for wrongful denials of care.* • NARFE supports the reauthorization of, and adequate annual appropriations for, the Older Americans Act to ensure the continuation and enhancement of community services for senior citizens of all income levels.* • NARFE supports legislation that would grant statehood to the District of Columbia.* • NARFE supports legislation and other changes necessary to extend to the delegate from the District of Columbia the same right to vote on the floor of the U.S. House of Representatives as is afforded to all other members of Congress.* • NARFE supports campaign finance reform legislation that would increase the effect of small-dollar individual contributions on political campaigns and grass-roots-based political action committees relative to high-dollar individual contributions.*

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The insured may need to submit for reimbursement. State and/or local taxes may apply. Prices and products subject to change. Blue Cross and Blue Shield Service Benefit Plan will pay a hearing aid benefit up to $2,500 every 3 calendar years for adults age 22 and over, and up to a $2,500 total per calendar year for members up to age 22. Do not rely on this communication piece alone for complete benefit information. All benefits are subject to the definitions, limitations, and exclusions in your Service Benefit Plan brochure. The Blue365® Discount Program offers access to savings on items that you may purchase directly from independent vendors, which may be different from items covered under your Service Benefit Plan or any other applicable federal healthcare program. For hearing aids, acupuncture, chiropractic and vision services, you must exhaust your Service Benefit Plan benefits first. To find out what is covered under your policy, contact the Service Benefit Plan. The products and services described herein are neither offered not guaranteed under any local Blue company’s contract with the Medicare program. In addition, these items are not subject to the Medicare appeals process. Any disputes regarding these products and services are not subject to the Service Benefit Plan’s Disputed Claims process. Blue Cross and Blue Shield Association (BCBSA) may receive payments from Blue365 vendors. Neither the Service Benefit Plan, BCBSA, nor any local Blue company recommends, endorses, warrants or guarantees any specific Blue365 vendor or item. The Service Benefit Plan reserves the right to change, modify, or terminate any item and vendors made available through Blue365, at any time. Blue Cross and Blue Shield Association is an association of independent, locally operated Blue Cross and Blue Shield Companies.

Managing Money

It’s Time to Re-evaluate your savings strategy

n October 23, 2014, the Internal Revenue Service (IRS) announced the cost-of-living adjustments affecting certain retirement plan contribution

limits, as well as the income phase-out ranges for Roth individual retirement account (IRA) contributions and deductible traditional IRA contributions. The 2015 salary deferral limit for the Thrift Savings Plan (TSP) and other definedcontribution retirement plans, such as 401(k)s, 403(b)s and 457 plans, is increasing from $17,500 to $18,000. For those participants ages 50 and older, the so-called catch-up contribution limit has increased from $5,500 to $6,000, permitting them to stash away an additional $1,000 this year. Although the 2015 contribution limits for the TSP and other defined-contribution plans increased slightly from 2014 limits, the IRA contribution limits remain $5,500 for both traditional IRAs and Roth IRAs. The catch-up contribution for IRAs remains unchanged at $1,000, as well. Note that while the IRS permits you to make a contribution to both a traditional IRA and a Roth IRA in the same year, the combined contribution still cannot exceed the limit of $5,500 for those under age 50 and $6,500 for those ages 50 and over.

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To be eligible to contribute to an IRA, you must have compensation, which includes salary and commissions from employment, self-employment income and taxable alimony payments − to name a few sources. Noncompensation income from pensions, Social Security and investments do not count. For married couples, there is a twist to the compensation requirement: As long as one spouse has eligible compensation, both spouses are permitted to make an IRA contribution. There is also an age requirement for traditional IRAs – you must be younger than 70½ to make a contribution. There is no age restriction, however, for Roth IRAs. The eligibility requirements do not end there. Once you’ve established that you have the right type of income, you then have to make sure you don’t have too much of it, as income phase-out ranges apply to both traditional IRAs and Roth IRAs. The income phase-out ranges for traditional IRAs af-

By Mark A. Keen,

CFP®

fect only the deductibility of the contribution, and only apply if you or your spouse are covered by a workplace retirement plan. In other words, regardless of your income, if you or your spouse are not covered by a workplace retirement plan, you may deduct the entire contribution you or he/she makes to a traditional IRA. For example, the deduction of a traditional IRA contribution for single tax filers who are covered by a workplace plan will be reduced when his or her Modified Adjusted Gross Income (MAGI) reaches $61,000, and is eliminated altogether when MAGI exceeds $71,000. If you are married, file a joint return and you are covered by a workplace retirement plan, the deduction for your traditional IRA contribution is phased out when MAGI is between $98,000 and $118,000. When a spouse contributes to a traditional IRA and is not covered by a workplace plan but is married to someone who is covered, the deduction is phased out if the couple’s MAGI is between $183,000 and $193,000. Please note that only the deduction is phased out, not the contribution. Regardless of income, or whether or not there is a workplace retirement plan, you can always make a nondeductible IRA contribution.

FINANCIAL TOOLS NARFE offers an online retirement calculator and other financial planning tools. Find out more at www.narfe.org/ federalbenefits.

Fortunately, the phase-out ranges for Roth IRA contributions are much simpler and don’t depend on whether or not you or your spouse are covered by a workplace retirement plan. For single tax filers, the MAGI phase-out range for Roth IRA contributions is $116,000 to $131,000; for married couples filing jointly, it is $183,000 to $193,000. Let’s look at an example of how the income phaseout limits work. John and Jill, both age 65, are mar-

ried and have MAGI of $150,000. John retired two years ago, but Jill continues to work and is covered by a workplace retirement plan. Although John has no eligible compensation of his own, he may make either a deductible traditional IRA contribution or a Roth IRA contribution. Jill − on the other hand − may not make a deductible traditional IRA contribution because she is covered by a workplace plan and their MAGI is above the $118,000 limit. Jill, however, is still eligible to make a Roth IRA contribution. As we enter the New Year, re-evaluate your retirement savings strategy and make sure you are not passing up an opportunity to put money into a tax-advantaged plan. Mark A. Keen, CFP®, is partner, Keen & Pocock, 10300 Eaton place, Fairfax, VA, and an investment adviser representative and registered principal of The Strategic Financial Alliance, Inc. (SFA). Securities and advisory services are offered through SFA. Email: mkeen@keenpocock.com.

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The Informed Citizen

republican wave, incumbents still win

By Christopher Farrell, senior analyst

efore the November 4 elections, only three of the 49 bicameral state legislatures were, like Congress, split, with one chamber held by Republicans and the other by Democrats. After the election, eight of the 49 will be split, with Colorado, Maine, Minnesota, New Mexico, New York and Washington joining Iowa and Kentucky. Previously split New Hampshire now has Republican majorities in both chambers. Republicans, already controlling 29 of the 50 governorships, saw a net gain of three, with Alaska still unsettled. Tim Storey, a legislative election expert with the National

tion: “Remarkably, given the Republican wave that swept across the nation, Republicans emerged from the election controlling exactly the same number of state governments as they controlled before the election — 23. Democrats lost many chambers and governors, but most of those states now have divided state governments. ... The sharp increase in divided state governments could lead to gridlock. Legislators and governors, however, are more likely to

Conference of State Legislatures (NCSL), summarized this elec-

GOP Controls Majority of State Legislatures, Governorships Party Control of State Legislatures and Governorships Following 2014 Midterm Elections

Dem Legislature, Dem Governor

WA MT

GOP Legislature, GOP Governor

MN ID

Dem Legislature, GOP Governor

NV CA

Split Legislature, Dem Governor

IA IL

KS OK

Split Legislature, GOP Governor

Undecided

MI NE

WV VA

NH MA RI CT NJ DE MD

SC AL

AK FL HI

TN AR MS

TX AK

GOP Legislature, Dem Governor

N/A*

Democrats: Republicans: Split: Undecided:

Analysis • GOP holds full control of legislatures and governorships in 22 states • Dems hold full control in 6 states • Seventeen states have divided state governments, with one party controlling the legislature (or two parties splitting control of the legislature) and another party in the governor’s mansion * Nebraska has a unicameral, nonpartisan legislature and a GOP governor Source: National Journal Research; National Conference of State Legislatures

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6 22 17 2

seek compromise, especially when it involves the budget, since all states but one must pass balanced budgets every year.” Party Highs and Lows The NCSL’s Storey estimates that Republicans will have a net gain of 300-350 seats and control more than 4,100 of the nation’s 7,383 legislative seats. That is Republicans’ highest number of legislators since 1920. The American Enterprise Institute reports that Democrats will have their smallest number of state legislators since the Civil War. What the Map Shows Our national government is divided with both the House and Senate controlled by Republicans and the presidency held by the Democrats.

In the map on p. 46, states shown in colors other than blue and red are divided, with each party holding either the governorship or at least one chamber of the legislature. In red and blue states, with unified government, both chambers and the governor are controlled by one party. Who Won Where You Live? NARFE’s Legislative Action Center has an “Elections & Candidates” module where you enter a street address and ZIP code and learn which candidates won election to statewide office (senate and governor), the House of Representatives and the state legislature. Now is the ideal time to learn more about these candidates, especially members-elect. Even where the party majority did not change,

there is much higher turnover in state legislatures than in Congress due to term limits, voluntary retirement and the lure of higher office. Most importantly, half of House members (218) and 44 senators in the 114th Congress (2015-2016) have previous service in the state legislature. Web-based State Resources • National Governors Association: www.nga.org/cms/ElectionResults; • Gateway to state websites: http:// thomas.loc.gov/home/statelegislatures.html; • State legislators elected to Congress: www.ncsl.org/ blog/2014/11/06/from-the-statecapitol-to-the-us-capitol.aspx; NARFE’s Elections & Candidates website: http://narfe.capwiz.com/ narfe/election/home/.

w w w. n a r f e . o r g

‘13 2014

G FUND

F FUND

C FUND

S FUND

I FUND

DECEMBER

0.19%

(0.56%)

2.54%

2.94%

1.51%

JANUARY

0.21%

1.58%

(3.45%)

(1.91%)

(4.03%)

FEBRUARY

0.18%

0.62%

4.58%

5.43%

5.58%

March

0.19%

(0.15%)

0.85%

(0.69%)

(0.57%)

APRIL

0.20%

0.90%

0.75%

(2.47%)

1.51%

MAY

0.20%

1.21%

2.35%

1.52%

1.72%

June

0.19%

0.14%

2.07%

4.45%

0.99%

JULY

0.19%

(0.19%)

(1.37%)

(4.38%)

(1.95%)

AUGUST

0.20%

1.12%

4.01%

4.98%

(0.14%)

SEPTEMBER

0.18%

(0.58%)

(1.40%)

(5.10%)

(3.82%)

OCTOBER

0.20%

0.96%

2.45%

4.11%

(0.63%)

NOVEMBER

0.17%

0.74%

2.70%

1.33%

0.51%

YTD

2.12%

6.52%

14.06%

6.74%

(1.19%)

LAST 12 MO

2.32%

5.92%

16.96%

9.87%

0.30%

10 yr

3.39%

4.65%

7.44%

10.43%

7.08%

L 2020

L 2030

‘13

L INCOME

2014

For the Record

Thrift Savings Plan Monthly Returns

DECEMBER

L 2040

L 2050

0.58%

1.25%

1.56%

1.77%

1.98%

JANUARY

(0.42%)

(1.57%)

(2.04%)

(2.35%)

(2.71%)

FEBRUARY

1.15%

2.73%

3.44%

3.94%

4.44%

MARCH

0.19%

0.17%

0.14%

0.12%

0.09%

APRIL

0.31%

0.39%

0.37%

0.32%

MAY

0.64%

1.20%

1.46%

1.63%

1.78%

JUNE

0.58%

1.19%

1.52%

1.77%

1.96%

JULY

(0.26%)

(0.97%)

(1.34%)

(1.63%)

(1.86%)

0.84%

1.64%

2.07%

2.40%

2.61%

(0.42%)

(1.36%)

(1.84%)

(2.18%)

(2.50%)

OCTOBER

0.61%

1.09%

1.36%

1.58%

1.70%

NOVEMBER

0.55%

1.04%

1.27%

1.42%

1.55%

YTD

3.81%

5.59%

6.46%

7.03%

7.38%

LAST 12 MO

4.42%

6.92%

8.11%

8.93%

9.50%

AUGUST SEPTEMBER

THIS CHART is provided as a service to NARFE members who enrolled in the Thrift Savings Plan while employed by the federal government. Retirees are not eligible for enrollment. These returns are net of the effect of accrued administrative expenses and investment expenses/costs. Percentages in () are negative. Source: TSP

Global markets rose in November; all Funds gained

Global markets rose across the board, spurred on by accommodating interest rate policies from European and Asian central banks and declining energy prices. Large stocks (C Fund) hit record highs (for the 14th time in 2014) and continued to bounce back strongly from October lows. Small stocks (S Fund) rallied in sympathy along with large stocks. International equities (I Fund) closed positively, reversing four straight months of declines, with the aid of the central bank policy moves. Fixed income markets (F Fund) closed higher supported by lower interest rates. —BY Benjamin Gong, Financial analyst, Thrift Savings Plan

Countdown to cola

he Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) decreased 0.40 percent in October 2014. To calculate the 2016 cost-of-living adjustment (COLA), the indices of July, August and September 2015 will be averaged and compared with the 2014 third-quarter average of 234.242. The percentage increase, if any, determines the COLA. October’s index, 233.229, is down 0.43 percent from the base. Benefits awarded under the Federal Employees’ Compensation Act (FECA) to individuals suffering work-related injuries or illnesses are adjusted according to each calendar year’s percentage change in the CPI-W. October’s index is 1.77 percent higher than the December 2013 base index of 229.174. The CPI represents purchases of food and beverages, housing, apparel, transportation, medical care, recreation, education and communication, and other goods and services. Included are various government fees, such as water charges, auto registration fees, and sales and excise taxes. Month

October 2014 November December January 2015 February March April

G Fund: Government securities (specially issued to the TSP) F Fund: Government, corporate and mortgage-backed bonds C Fund: Stocks of large- and medium-size U.S. companies S Fund: Stocks of small- to medium-size U.S. companies (not included in the C Fund) I Fund: International stocks of 21 developed countries L Fund: Invested in the G, F, C, S and I Funds (The proportion of L Fund balance invested in each of the individual TSP funds depends on the L Fund chosen.) 48

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May June July August September

CPI-W

233.229

Monthly % Change

-0.40

% Change from 234.242

-0.43

Donate to NARFE Programs Support Alzheimer’s Research

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Write your chapter number on check; make it payable to: NARFE-Alzheimer’s Research

Enclosed is my NARFE-Alzheimer’s contribution: $ Every cent that is contributed is used for research. Please circle: Mr. Mrs. Miss Ms. and mail to: Name: Alzheimer’s Association Address: 225 N. Michigan Ave., 17th Floor City: State: ZIP: Chicago, IL 60601-7633 Chapter Number: Credit Card Information: MasterCard VISA NARFE members contributed for If you have any questions, write to: Discover AMEX Alzheimer’s research: $12 Million Fund National Committee Chair Card Number: Merv Stuckey, 2272 E. Buster Mountain Dr. Expiration Date: (mm)/ (yy) Oro Valley, AZ 85755-4709 *Total as of October 31, 2014 3-Digit Security Code: 100% of all contributed funds go to Name: (please print) Email: narferoadrunner@comcast.net

$11,049,950* Alzheimer’s research.

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Please check appropriate box(es). To make credit card contributions, call 800-338-0755. Scholarships are available to children, grandchildren and great-grandchildren of federal civilian retirees and current federal employees who are NARFE members. NARFE-FEEA Disaster Fund

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NARFE News

Alzheimer’s chair

$11 million Goal Reached

ARFE is proud to announce 1985. NARFE members consistently that the Association reached have given generously of their time its goal of raising $11 million and dollars, finding creative ways to in total cumulative donations by the expand their fundraising efforts. end of 2014 to support Alzheimer’s “NARFE members should conresearch. The milestone was met gratulate themselves on reaching after giving in September 2014 was this goal,” said NARFE National tallied. NARFE, in partnership with President Richard G. Thissen. “I the Alzheimer’s Association, has been applaud their resolve to irradicate engaged in the fight to win the war this terrible disease, which devasLife Membership Apl_Newdisease Design since 3/26/13 3:49 PM Page 1 against Alzheimer’s tates so many families.”

NARFE National President Richard G. Thissen has named Merv Stuckey of Oro Valley, AZ, as the new chairman of the NARFEAlzheimer’s National Committee. Stuckey, Alzheimer’s coordinator for the Arizona Federation, represents Region VII on the committee. Each of NARFE’s 10 regions is represented on the committee.

At the NARFE National Convention in August, delegates voted to set a new cumulative goal of $12 million in 2016. The program is strictly voluntary, with 100 percent of all donations going to support Alzheimer’s research. Members can give via the NARFE website at www.narfe.org, or use the coupon on the donation page in narfe magazine (see p. 49 in this issue).

NARFE NATIONAL LIFE MEMBERSHIP APPLICATION Life Membership Fee Schedule Ages

Contact Information n Mr. n Mrs. n Miss n Ms. Full Name _____________________________________________ Street Address _________________________________________ Apt./Unit______________________________________________ City _______________________ State _____ ZIP _____________ Phone (__________) ____________________________________ Email_________________________________________________ Date of Birth _________ /_________ /___________________ dd

yyyy

Recruiter ID # (if applicable) _________________________________ Chapter Number _______________________________________ (call 800-456-8410 for chapter information) Membership Information Member Number: ______________________________________ (New members) Membership is open to civilians in any agency of the federal or D.C. (before Oct. 1, 1987) governments eligible for a federal annuity.

Thank you for becoming a National Member for Life. You will receive a membership card, certificate and special lapel pin. Please allow six weeks for processing. Dues payments & gift contributions to NARFE are not deductible as charitable contributions for income tax purposes. 50

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Single or Quarterly Payment Installments 30-39 $1,796 $450.25 40-50 1,408 353.25 51-55 1,127 283.00 56-60 960 241.25 61-65 801 201.50 66-70 653 164.50 71-75 514 129.75 76-80 392 99.25 81-90 251 64.00 91-100+ 127 33.00

I am a (check all that apply) n Active Federal Employee n Active Federal Employee Spouse n Annuitant n Annuitant Spouse n Survivor Annuitant

PAYMENT INFORMATION n Single Payment or n Quarterly Installments (4 payments) Life Membership fee amount: $ ______________________ PAYMENT OPTIONS n Check or Money Order (Payable to NARFE) n Charge my: n MasterCard n VISA n Discover n American Express Card No. __________________________________________ Expiration Date _________ /_________ mm

yyyy

Name on Card ______________________________________ Signature ____________________________ Date ________ MAIL THIS APPLICATION TO NARFE Member Records 606 N. Washington St. / Alexandria, VA 22314-1914

Active and Retired Federal Employees ...

JOIN NARFE TODAY!

National Active and Retired Federal Employees Association The only organization dedicated solely to protecting and preserving the benefits of all federal workers and retirees, NARFE informs you of any developments and proposals that affect your compensation, retirement and health benefits, AND provides clear answers to your benefit questions.

Who Should Join?

Three Easy Ways To Join 1. 2. 3.

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Active Federal Employee Active Federal Employee Spouse Annuitant Annuitant Spouse Survivor Annuitant

n Please enroll my spouse

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phone (__________) _______________________________

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Email____________________________________________

NARFE respects the privacy of our members. Personal information is used to provide content and relevant communications to our members, and will not be sold or rented to third parties without your express permission.

Choose Your Membership Type o Local Chapter Close-to-Home Membership – $40* Affiliation with the NARFE chapter closest to your home. Receive narfe magazine each month; attend meetings, often with invited speakers; network; and get involved in grass-roots lobbying efforts. Chapter Affiliation: Chapter # __ __ __ __(if known, otherwise enroll me in the chapter closest to my zIp code). *First-year dues. Subsequent years, $40 plus local chapter dues.

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MAIL THIS APPLICATION TO NARFE Member Records / 606 N. Washington St. / Alexandria, VA 22314-1914

NARFE’s Dues Withholding Program What is dues withholding? It is a dues-payment method that gives NARFE members (retirees) the option of having their annual NARFE membership dues deducted from their annuities on a monthly basis. How does it work? One-twelfth of your total dues is automatically deducted from your monthly annuity. Your monthly deduction is determined by the following formula: (National dues ÷ 12) + (Chapter dues ÷ 12) = Total Monthly Deduction

Advantages • Save 15% off your annual membership dues! • Sign up your spouse and double your savings! • You’ll never get another dues reminder from us! • Your monthly payment is affordable and convenient! • You may cancel your dues withholding at any time! Application process It takes 60-90 days to process your application. Once the process is complete, you will receive a special membership card distinguishing you as a NARFE dues-withholding member.

To learn more about dues withholding, call 800-627-3394. Retirees, spouses of retirees and annuitant survivors are eligible for dues withholding.

NARFE Dues Withholding Application for Retirees n YES. I want to enroll in NARFE’s Dues Withholding Program (Annual dues of $34 plus Chapter dues of record to be withheld annually.) Social Security Number (9-digit number)

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AUTHORIZATION (Withholding will begin in 60-90 days). No payment should be forwarded with application. I authorize the United States Office of Personnel Management to make appropriate deductions from my annuity payments, not to exceed the amount certified by the National Active and Retired Federal Employees Association as the amount of dues for which I am annually obligated, in accordance with elections I make below, and to pay the deducted sum to the National Active and Retired Federal Employees Association (NARFE). This authorization shall also apply to any and all dues changes certified by NARFE membership in accordance with elections I make below: Please allow 60-90 days for processing.

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Member Perks

NARFE Member Perks

are designed to provide NARFE members with a quality option in their search for commonly used products and services. NARFE makes no guarantee on any products and services listed, and encourages its members to shop and compare before making a decision on any financial matter.

Credit Union

NARFE Premier Federal Credit Union 800-328-1500 www.NARFEpremierfcu.org As a member of NARFE, you have the privilege of joining NARFE Premier Federal Credit Union, which has been serving members since 1935. We offer extensive services at competitive rates to members nationwide. Your savings are federally insured to at least $250,000 and backed by the full faith and credit of the United States Government. For more information, call the number above, email jparish@narfepremierfcu.org or visit the website.

insurance

NARFE Insurance Services 800-233-5764 www.narfeinsurance.com Designed and administered by Mercer Health & Benefits Insurance Services, LLC, exclusively for NARFE members: Senior Whole Life, Term Life, Medicare Supplements, Hospital Income Plan, Short Term Recovery Insurance, Pet Insurance, Accidental Death & Dismemberment, Cancer Care, Enhanced Dental Insurance and Long Term Care. Go to the website for more information on these programs.

GEICO 800-368-2734 NARFE members with good driving records may be eligible for quality au-

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tomobile insurance from GEICO. Ask about the NARFE discount available to members in many states. Call today for your free, no-obligation rate quote. Be sure to mention that you’re a NARFE member! • Discount amount varies in some states • Discount not available in all states or in all GEICO companies • One group discount applicable per policy.

Federal Long Term Care Insurance Program 800-LTC FEDS www.LTCFEDS.com Make long-term care insurance part of your retirement plan. With benefits designed specifically for the federal family, the Federal Long Term Care Insurance Program offers a smart way to help protect savings and assets, and remain independent should you need long-term care services someday. Start planning for the future. Visit www.LTCFEDS.com today.

Vacation rentals

Government Employees Travel Opportunities® 877-867-3639 www.getravelop.com/narfe Offers government employees, retirees and their families 7-night stays for only $349 on accommodations at popular destinations worldwide.

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hotels

Choice Hotels International 800-258-2847 www.choicehotels.com With 6,000 hotels in the United States and throughout the world, Choice Hotels® offers something for everyone. Join the Choice Privileges® rewards program and earn points with every qualifying stay toward free nights, Airline Rewards, gift cards and more. As a NARFE member, receive 20% off your next stay at participating hotels when you use Special Rate ID 00801967. This offer is subject to availability and cannot be combined with any other offer. Advance reservations required.

Wyndham Hotel Group 877-670-7088 As a member of NARFE, you will receive up to 20% off the “Best Available Rate” at participating locations. Call and give the agent your special discount ID number, 8000002694, at time of booking to receive discount. Whether you are looking for an upscale hotel, an all-inclusive resort or something more cost-effective, we have the right hotel for you... and at the right price. So start saving now. Call our special member-benefits hotline 877-670-7088 and reserve your room today at one of these fine hotels: Wyndham Hotels and Resorts®, Days Inn®, Ramada Worldwide®, Super 8®, Wingate By Wyndham®, Baymont Inns and Suites®, Hawthorn Suites® By

Wyndham, Microtel Inns and Suites®, Howard Johnson®, Travelodge® and Knights Inn®.

car rentals

National You Drive A Hard Bargain. Receive up to 20% off rentals at National Car Rental. To make a reservation call National Car Rental at 1-800-CARRENT® and reference Contract ID 5282909.

Alamo

mention you are a NARFE member and ask for Todd.

Wheaton World Wide Moving 800-248-7960 www.narfe@wvlcorp.com At Wheaton, we know interstate relocating is much more than trucks and boxes. Moving is not simply an address change. It’s a life change. With a network of top-quality agents throughout the United States, Wheaton provides peace of mind with every relocation. We offer you, as a NARFE member, benefits to help you have a positive interstate relocation experience. Call Angela and mention you are a NARFE member to start the moving process.

Drive Happy® with Alamo® where NARFE members receive year-round discounts. Call 1-800-462-5266 and reference Contract ID 262544.

The employees/owners of Avis offer guaranteed low rates and quality services to members of NARFE. Call 800-331-1441 and mention ID# A991900.

Moving services

Bekins Van Lines 800-248-4810 www.narfe@bekins.com All NARFE members will receive contracted pricing for all interstate shipments. This will apply to packing, transportation and full-value coverage against damages. In addition, Bekins Van Lines can assist with instate shipments, local moves and international moves with competitive pricing and quality service. Please

1. Stroke/Carotid Artery 2. Abdominal Aortic Aneurysm 3. Atrial Fibrillation 4. Peripheral Arterial Disease. You will receive a confidential written report within 21 days. Life Line Screening and NARFE encourage you to share these test results with your doctor. All four screenings cost just $135. To schedule an appointment, please call the number above and give the operator code number BKHN075 or visit the website. Coverage may vary and may not be available in all states.

narfe merchandise emergency services

Avis

Life Line Screening, America’s leading provider of community-based preventive health screenings, will conduct the following screenings using state-of-the-art ultrasound technology in your neighborhood.

MASA 800-423-3226 Medical Air Services Association has been the industry leader in prepaid emergency assistance services for more than 30 years. NARFE members have experienced MASA’s “peace of mind” services since 2001. Now NARFE members are entitled to even more: air ambulance transportation, helicopter transportation, ground ambulance, vehicle return, mortal remains transport, and much more! Call MASA Today. It Could Save Your Life!

health screening

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NARFE General Store 855-99NARFE (855-996-2733) www.narfegeneralstore.com As the official provider of NARFE merchandise, the NARFE General Store offers NARFE-approved name badges, business cards, customizable logo products and plaques. Check out our online catalog.

NOT A MEMBER? GO ONLINE: It’s easy to join online at www.narfe.org. Click “Join NARFE.” TURN TO PAGE 51: Fill out the Membership Application and mail it to NARFE to receive all the perks of being a NARFE member. Call (Toll-Free) 800-627-3394.

w w w. n a r f e . o r g

The Way We Worked

nd consul

words Around the world In this 1950 photo, Department of State communications officers use TT-5 teletype machines to send record communications between the Department headquarters in Washington, DC, and posts overseas. Today, these record memoranda and telegrams are sent electronically. These particular teletype machines were used between the late 1940s and early 1950s. The officers worked in the State Department Wire Room, part of the Traffic Section in the Telegraph Branch. Photo courtesy of Carl Ashley, Department of State, Office of the Historian, Records of the Department of State, National Archives; in collaboration with the Society for History in the Federal Government (SHFG), bringing together government professionals, academics, consultants, students and citizens interested in understanding federal history work and the historical development of the federal government. Website: http://shfg.org/shfg/. 56

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Did you know? The first Secretary of State, Thomas Jefferson, oversaw a small staff of one chief clerk, three other clerks, a translator and a messenger and maintained only two diplomatic posts, in London and Paris, as well as 10 consular posts, according to the State Departmentâ&#x20AC;&#x2122;s website. The number of diplomatic and consular posts reached 257 in 2010, according to the site.

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