June 2015 NARFE Magazine by NARFE

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The lab@OPM: Innovation Incubator

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Advantages of Living Trusts

COVER STORY

Foreign Service Global Opportunities, Personal Challenges

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Volume 91 • Number 6

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WashingTon Watch

NARFE Says Final Budget ‘Less Egregious,’ But Still Assumes Cuts for Feds

Medicare Payment Reform Act Signed Into Law

Tax Delinquency Bill Fails in House

10 Save the Date! August

Is NARFE ‘Grass-Roots Advocacy Month’

Member Advocacy By the Numbers

12 NARFE Bill Tracker 13 Other Bills of Interest

Columns

Cover Story

foreign service: GLobal opportunities, personal challenges. For foreign service officers, extraordinary experiences may be accompanied by personal and career risks.

From the President

42 Managing Money 44 The Informed Citizen 46 Alzheimer’s Update DEPARTMENTS

The lab@opm: Innovation incubator. A workspace at the Office of Personnel Management fosters progress using human-centered design.

Questions & Answers

48 For the Record: TSP

Investments, COLA Chart

50 NARFE News 64 The Way We Worked

On the Web

special section

53 NARFE 2014 Financial

visit us online at:

Statements

www.narfe.org like us on facebook:

NARFE National Headquarters follow us on twitter:

@narfehq

ON THE COVER

Illustration by Bill Pragluski, Critical Stages, LLC

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JUNE 2015 | Volume 91 | Number 6

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

No Way to run a business The Hill, a Washington, DC, newspaper widely read on Capitol Hill, recently published an op-ed piece I wrote on the federal budget debate. This month’s column is adapted from that article.

magine this scenario: The chairman of the board of a large disease prevention and biomedical research company calls

a staff meeting and says, “Colleagues, I am amazed at the work we’ve done.

“We tackled the Ebola crisis, made breakthroughs in cancer treatment and provided incubator investments to just about every promising drug of the future. Congratulations. “In recognition of your hard work and accomplishments, the board of directors has voted to make some changes in your compensation and benefits: We are going to increase your contributions toward your retirement pension with no increase in benefits, so your paycheck will be reduced. Next, we are going to increase your share of your health insurance premiums while providing you no better coverage, so your paycheck will

be cut back even more. As for your 401(k), we are going to lower the return on your safest investment and take $32 billion out of your retirement nest egg over the next 10 years so we can take credit for ‘tightening our belts.’ Finally, we are going to decrease the workforce by 10 percent.” While this scenario would never play out in the private sector, it is happening in the federal government, whose “board” comprises the 535 members of Congress. Politicians often say they want to run the government more like a business. This is no way to run a business, or the government. Business leaders understand they cannot achieve their goals and compete without employing top talent. Treating employees with respect, as well as providing fair pay and benefits, are the keys to accomplishing this. Yet, Congress characterizes federal employees as underworked and overpaid; shuts down the government and asks employees to work without pay; and now proposes unprecedented cutbacks in pay, benefits and jobs. In my view, this is a breach of the public trust and fiduciary responsibility of our elected representatives. The policies this Congress is pursuing are not good for any business, and they certainly are not good for America.

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

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Not getting the sleep you need?

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On its 10 year anniversary and with over five million satisfied customers, MyPillow® has been selected the Official Pillow of the National Sleep Foundation! How Well Did You Sleep Last Night? Did you toss and turn all night? Did you wake up with a sore neck, head ache, or was your arm asleep? Do you feel like you need a nap even though you slept for eight hours? Just like you, I would wake up in the morning with all of those problems and I couldn’t figure out why. Like many people who have trouble getting a good night’s sleep, my lack of sleep was affecting the quality of my life. I wanted to do something about my sleep problems, but nothing that I tried worked.

Mike Lindell Inventor of MyPillow®

The Pillow Was the Problem I bought every pillow on the market that promised to give me a better night’s sleep. No matter how many pillows I used, I couldn’t find one that worked and finally I decided to invent one myself. I began asking everyone I knew what qualities they’d like to see in their “perfect pillow”, and got many responses: “I’d like a pillow that never goes flat”, “I’d like my pillow to stay cool” and “I’d like a pillow that adjusts to me regardless of my sleep position.” After hearing everyone had the same problems that I did, I spent the next two years of my life inventing MyPillow.

MyPillow® to the Rescue Flash forward ten years and MyPillow, Mike Lindell’s revolutionary pillow design, has helped 5 million people improve the quality of their sleep. MyPillow has received thousands of testimonials about the relief MyPillow has brought to people who suffered from migraines, snoring, fibromyalgia, neck pain and many other common issues. Lindell has been featured on numerous talk shows, including Fox Business News and Imus in the Morning. Lindell and MyPillow have also appeared in feature stories in The New York Times and the Minneapolis Star Tribune. MyPillow has received the coveted “Q Star Award” for Product Concept of the Year from QVC, and has been selected as the Official Pillow of the National Sleep Foundation. MyPillow’s patented technology can help with all of the most common causes of sleep loss and allows you to adjust it to any sleeping position. You can even wash and dry MyPillow as easily as your favorite pair of blue jeans!

“Until I was diagnosed with various sleep issues, I had no idea why my sleep was so interrupted throughout the night. I watch Imus each morning and heard endless testimonials about MyPillow. I took his advice and ordered a MyPillow. Now I wake up rested and ready to conquer the day ahead. Thank you for helping me remember what it’s like to sleep like a baby!” - Jacqueline H.

Unprecedented Guarantee and Warranty I do all of my own manufacturing in my home state of Minnesota and all materials are 100% made in the U.S.A. I’m so confident MyPillow will help you, I’m offering an unprecedented 60-day money back guarantee and a 10-year warranty not to go flat! I truly believe MyPillow is the best pillow in the world and that if everyone had one, they would get better Michael J. Lindell CEO, MyPillow, Inc. sleep and the world would be a much happier place.

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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

narfe says final budget ‘less egregious,’ but still assumes cuts for feds

s this issue went to press, Congress was expected to pass a compromise fiscal year 2016 budget resolution that NARFE says is “less egregious” than the version

originally passed by the House, which called for $318 billion in cuts to the pay and benefits of federal employees and retirees. But the joint budget hammered out by a House-Senate conference committee is still objectionable to the Association. “NARFE opposes the budget resolution as it assumes more than $193 billi0n worth of savings from the federal community and fails to relieve agencies from the arbitrary budget constraints imposed by the across-the-board funding cuts known as sequestration,” said NARFE President Richard G. Thissen. “However, NARFE is relieved that the resolution does not set in motion an expedited process (known as budget reconciliation) to achieve those assumed savings, and it includes no policy proposals to do so,” Thissen said. He thanked the “tens of thousands” of NARFE members who called and wrote their members of Congress regarding the budget 8

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resolutions. (See story, p. 11.) “Moving forward, NARFE members must remain vigilant,” Thissen cautioned. “While the budget fights may be over for now, the policy changes contained within the House budget resolution will continue to be part of the conversation on Capitol Hill as Congress looks to pay for other priorities. NARFE members cannot stand idly by while Congress works to reduce our earned pay, retirement and health benefits.” Policy Proposals. As noted by Thissen, NARFE is concerned that the policy recommendations contained in the House-passed budget resolution will be proposed next as ways to pay for big-

As the budget agreement took shape, work continued on the restoration of the U.S. Capitol dome. Architect of the Capitol

ticket bills that will be considered later this year, such as legislation reauthorizing the Highway Trust Fund. Those policy recommendations include: • Increasing Federal Employees Health Benefits Program (FEHBP) premiums for employees and retirees by tying the government’s contribution to inflation; • Decreasing federal pay by 6 percent by increasing payroll deductions toward retirement; • Decreasing the rate of return on the Thrift Savings Plan’s G Fund; • Reducing the size of the federal workforce by 10 percent; • Eliminating the FERS Annuity Supplement for employees under the Federal Employees Retirement System (FERS) who retire before becoming eligible for Social Security benefits at age 62; • Increasing postal employees’ health insurance premiums; • Increasing some federal retirees’ FEHBP premiums based on years of service; and • Encouraging the total elimination of FERS for new hires.

MEDICARE PAYMENT REFORM ACT SIGNED INTO LAW BY PRESIDENT OBAMA

bill that changes the way Medicare pays doctors was signed into law April 16 by President Obama after passing the House and Senate by large margins. Under the law, reimbursements to physicians for care provided to Medicare patients eventually will be tied to quality of care, rather than quantity of procedures performed. The law replaces the Medicare “sustainable growth rate” (SGR) formula, which has been in place since 1997. Under the SGR formula, doctors repeatedly have been faced with the threat of substantial reductions – of more than 20 percent – in the payments they receive for treating Medicare patients. If implemented fully, the SGR formula likely would have led doctors to refuse to accept Medicare patients. However, since 2003, Congress

has passed short-term “doc fix” legislation 17 times to temporarily suspend the SGR formula and prevent the payment cuts from going into effect. Now, the SGR formula has been permanently repealed, avoiding the need for those “doc fixes.” Instead, the law provides for 0.5 percent increases in payments for the next five years. The bipartisan compromise bill requires that part of the cost of the new law be paid for by higher Medicare Part B and Part D premiums for higher-income participants. Starting in 2018, premiums will increase by up to 15 percent for individuals with income above $133,500 ($267,000 for a couple). It also prohibits private “Medigap” plans from covering the Part B deductible for new beneficiaries, starting in 2020.

TAX DELINQUENCY BILL FAILS

egislation to fire federal employees delinquent on their taxes failed to pass the House April 15. The Federal Employee Tax Accountability Act, H.R. 1563, would prohibit anyone who is “seriously delinquent” on his or her taxes from being hired as a federal employee or continuing to serve. Seriously delinquent tax debt was defined as a “federal tax liability assessed by the Internal Revenue Service and collectible by levy or court proceeding.”

The bill was sponsored by Rep. Jason Chaffetz, R-UT, and failed to pass the House on a 266-160 vote. It was considered under a suspension of rules, requiring a two-thirds majority for passage. NARFE opposes the bill, calling it a targeted message against the federal workforce that gives the public the impression that federal employees are deliberately avoiding their tax obligations. Federal employees’ tax delinquency rate (Continued on p. 11)

Federal Employees Health Benefits Program plans for federal retirees with Medicare Part B are not defined as Medigap plans for these purposes and will not be affected by this provision. —By John Hatton, deputy legislative director

MYTH vs. REALITY Myth: Federal employees investing in the Thrift Savings Plan (TSP) G Fund are receiving a rate of return more generous than they should be, given the limited risk associated with this investment. This “sweetheart” deal is available to no other investor in this or any similar investment. Reality: The TSP’s G Fund is identical to the current investment arrangement for the Social Security Trust Fund and the Civil Service Retirement and Disability Trust Fund. Deposits are invested in nonmarketable government securities, not only as a relatively riskfree investment but also for the convenience of the United States government in managing the public debt. During times when the public debt limit has been suspended or breached, the Secretary of the Treasury has accessed the G Fund to pay current bills.

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Washington Watch

Save the Date! August is NARFE ‘Grass-roots advocacy month’

tudies confirm that consentatives and senators likely will stituents who talk to their host town hall events. Attend and members of Congress are ask a question. In addition, introthe most persuasive advocates. duce yourself to the staff memLawmakers are in their districts bers present and start developing frequently in the summer, making a relationship with the congresit easier for NARFE members to sional office. You may even get express their views directly. a few minutes with the member NARFE’s “Grass-Roots Advoca- at the end of the event. View the town hall meeting schedules at cy Month” in August corresponds www.narfe.org or contact your with Congress’ month-long legislators’ offices for dates. recess. This year, the House will NARFE members also can be in recess from August 3-Sepbe active advocates during the tember 8; the Senate will adjourn rest of the summer. If you meet starting August 10. 2015-16_PAC_Coupon_2013 Coupon 12/1/14 10:11 AM Page 1of Congress at public members While they are home, repre-

events – especially parades and community fairs – ask them to oppose any proposals that attack hardworking federal employees and jeopardize the retirement security of federal annuitants. Wear your NARFE hats and T-shirts for some free publicity. For more tips, see the Protect America’s Heartbeat “Legislative Activities at the Individual Level Toolkit,” www.narfe.org/heartbeat /resources.cfm, or contact the legislative staff at 703-838-7760. —By Sarah Weissmann, grass-roots program manager

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Legislative Resources

member Advocacy by the numbers The most popular advocacy action taken by NARFE members so far in 2015 has been in opposition to budget proposals that threaten the pay and benefits of federal employees and retirees (see p. 8). Through April 20, members sent 43,569 messages on that topic to their members of Congress using NARFE’s online Legislative Action Center. They also sent 3,737 messages to representatives and 2,864 to senators in response to their specific votes on the budget resolutions. In addition, NARFE members interacted in person with 198 congressional offices this year, at meetings and town hall events.

tax delinquency bill

(Continued from p. 9) in 2014 was 3.1 percent, less than half Program. Firing employees also would make it harder to collect taxes the 8.7 percent rate among the genfrom these individuals, who then eral public. The government already would be unemployed. can collect unpaid taxes from federal —By Jason Freeman, political and legislative employees through wage garnish2015_Cong_Dir_Ads_half page 2/23/15 11:06 AM Page 1 specialist ment and the Federal Payment Levy

• 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.

Order your copy of NARFE’s CONGRESSIONAL DIRECTORY for the 114th CONGRESS (2015-2016) today! Clip and mail to: NARFE Congressional Directory, 606 N. Washington Street, Alexandria, VA 22314-1914 Name ________________________________________________ Address ______________________________________________ City _______________________ State ______ ZIP ___________ Member ID# (As it appears on narfe magazine label)

Quantity _____________ $20 each (includes shipping and handling)

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Name on card (print) ______________________________________________________ Signature _____________________________________________ Date _____________

Also order online at www.NARFE.org

*Please allow 2-3 weeks for delivery

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Washington Watch

narfe bill tracker The NARFE bill TRACKER is your monthly guide to the congressional legislation that NARFE is following. Check back each issue for updates. ISSUE

Bill Number / Name / Sponsor H.R. 138: Access to Insurance for All Americans Act / Rep. Darrell Issa, R-CA

HEALTH CARE

Cosponsors: 0

H.R. 313: Wounded Warriors Federal Leave Act / Rep. Stephen F. Lynch, D-MA SICK LEAVE FOR WOUNDED VETERANS

Cosponsors: 20 (D), 5 (R) S. 242: Wounded Warriors Federal Leave Act / Sen. Jon Tester, D-MT Cosponsors: 1 (R) H.R. 304: The Federal Adjustment of Income Rates (FAIR) Act / Rep. Gerald E. Connolly, D-VA

What Bill Would Do

Latest Action(s)

Repeals the Affordable Care Act and establishes a national health program administered by the Office of Personnel Management to offer Federal Employees Health Benefits Program plans to individuals who are not federal employees or retirees. It creates separate risk pools for federal and non-federal participants.

Referred to nine House committees

Entitles any federal employee who is a veteran with a serviceconnected disability rated at 30 percent or more, during the 12-month period beginning on the first day of employment, up to 104 hours of leave, without loss or reduction in pay, for purposes of undergoing medical treatment for the disability for which sick leave could regularly be used. Requires the forfeiture of any of the leave that is not used during the 12-month period.

Approved by the House Committee on Oversight and Government Reform on 1/27/15

Provides for a 3.8 percent pay raise for federal employees in 2016.

Referred to the House Committee on Oversight and Government Reform

Approved by the Senate Committee on Homeland Security and Governmental Affairs on 3/4/15 narfe, March 2015

Cosponsors: 57 (D)

Federal Compensation

S. 164: The Federal Adjustment of Income Rates (FAIR) Act / Sen. Brian Schatz, D-HI

Referred to the Senate Committee on Homeland Security and Governmental Affairs

Cosponsors: 5 (D)

narfe, March 2015

H.R. 485: Wage Grade Employee Parity Act / Rep. Matt Cartwright, D-PA Cosponsors: 9 (D), 3 (R)

H.R. 785: The Federal Employee Pension Fairness Act / Rep. Donna Edwards, D-MD Cosponsors: 12 (D)

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The president has the ability to provide a pay raise for federal employees on the General Schedule. He does not have the same authority for Wage Grade, or hourly, employees, whose raises must be authorized by Congress. H.R. 485 would give the president that authority.

Referred to the House Committee on Oversight and Government Reform

Repeals laws passed in 2012 and 2013 that increased the Federal Employees Retirement System contributions for newly hired federal employees.

Referred to three House committees

NARFEâ&#x20AC;&#x2122;s Position:

Oppose

Support

narfe, April 2015

No position

ISSUE

Bill Number / Name / Sponsor H.Res. 12: Expressing the sense of the House of Representatives that the United States Postal Service should take all appropriate measures to ensure the continuation of its six-day delivery services / Rep. Sam Graves, R-MO

Postal Reform

GPO/WEP

Paid parental leave

Latest action(s)

Expresses the sense of the House that the U.S. Postal Service should maintain sixday mail delivery. As a resolution, it will not be sent to the president and, therefore, cannot become law.

Referred to the House Committee on Oversight and Government Reform

Repeals the service standards for market-dominant products implemented by the U.S. Postal Service (USPS) on January 5, 2015, and directs the USPS to reinstate the service standards that were in effect on December 31, 2011.

Referred to the House Committee on Oversight and Government Reform

Reforms campaign finance laws to put small donors to political campaigns on par with wealthier donors. Provides a tax credit for campaign contributions and government matching contributions.

Referred to three House committees

Cosponsors: 131 (D), 25 (R) H.R. 784: Protect Overnight Delivery Act / Rep. Rosa DeLauro, D-CT Cosponsors: 74 (D), 1 (R)

Campaign finance

What Bill Would Do

H.R. 20: The Government By the People Act / Rep. John Sarbanes, D-MD Cosponsors: 144 (D), 1 (R)

H.R. 973: Social Security Fairness Act of 2015 / Rep. Rodney Davis, R-IL Cosponsors: 66 (D), 19 (R)

Repeals both the Government Referred to the Pension Offset (GPO) and the House Committee on Windfall Elimination Provision Ways and Means (WEP). narfe, May 2015

H.R. 532: Federal Employees Paid Parental Leave Act / Rep. Carolyn Maloney, D-NY

Allows federal employees six weeks of paid leave for the birth or adoption of a child.

Cosponsors: 45 (D), 1 (R)

Referred to the House Committees on House Administration, and Oversight and Government Reform narfe, May 2015

OTHER BILLS OF INTEREST TO NARFE

he following bills targeting federal employees have been introduced in this Congress. They are not expected to get much action, so they have not been included in the Bill Tracker. However, it is important for NARFE members to be aware of the priorities of some in Congress.

â&#x20AC;˘ H.R. 1230, the Government Employee Pension Reform Act of 2015, introduced by Rep. Bruce Westerman, R-AR, would change the pension calculation from the high-3 to the high-5, effective January 1, 2017. The change would save $3.1 billion over a 10-year period, according to calculations by the

Congressional Budget Office. No cosponsors. â&#x20AC;˘ H.R. 1137, the Promoting Accountability in Decisions for Progress Act (PAID for Progress Act), introduced by Rep. Tom Rice, R-SC, would cut salaries for all federal employees (Continued on p. 14) w w w. n a r f e . o r g

Washington Watch

OTHER BILLS OF INTEREST (Continued from p. 13)

Act of 2015, introduced by Rep. Jody Hice, R-GA, would repeal a long-standing law that allows federal employees who serve as union representatives to use official time to conduct union activities. Similar bills and amendments have failed in the House in the last few years. Eighteen cosponsors. • H.R. 280, introduced by Rep. Jeff Miller, R-FL, gives the Secretary of the Department of Veterans Affairs (VA) blanket authority to force VA employees to repay any bonus they previously were given. Employees would have the right to a hearing, but all decisions are final. H.R. 280 passed the House on March

making more than $100,000 by 8.7 percent, including members of Congress and the president. This would take effect immediately upon passage. Two cosponsors. • H.R. 417, Federal Workforce Reduction Through Attrition Act, introduced by Rep. Cynthia M. Lummis, R-WY, would reduce the federal workforce by 10 percent — or more than 200,000 employees — over the next two years by limiting agencies to just one new hire for every three employees who leave or retire. Supporters of H.R. 417 say it will save $35 billion over five years. Eight cosponsors. • H.R. 1658, the Federal Employee Accountability

2 and could gain traction in this Congress. Nine cosponsors. • H.R. 340, the Rebalance for an Effective Defense Uniformed and Civilian Employees (REDUCE) Act, introduced by Rep. Ken Calvert, R-CA, would limit full-time positions in the Department of Defense (DOD) to a number not greater than 85 percent of the number of such positions at DOD as of September 30, 2016, by fiscal year (FY) 2022 and to remain at that level through FY 2026. According to Calvert, H.R. 340 would save $82.5 billion over the first five years. Nine cosponsors. —By Jessica Klement, Legislative Director

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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 Crime, Punishment and retirement Benefits

My friend and I are both eligible for retirement but have decided to continue working for a while longer. We were thinking about some “what ifs” the other night, and one question that popped into my head was, What if I committed a crime and went to prison? Would I still be paid my retirement from the Office of Personnel Management?

It would depend on the crime. The law specifies an individual, or his survivor or beneficiary, may not be paid an annuity if the individual is convicted of certain crimes. Most of the offenses to which this applies are against the United States, such as espionage and treason or concealing an association with a group that advocates the overthrow of the government. The retirement law doesn’t say annuities are forfeited for other convictions either at the federal or state level. Members of Congress, on the 16

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other hand, could be barred from receiving their federal pensions on conviction of lesser offenses. The ethics reform laws of 2007 and 2012 added that lawmakers could lose their pensions if convicted of bribery, perjury or federal criminal violations for public corruption, election law violations and misconduct in office.

FEHBP Benefits for Common-Law Spouse

I have a common-law marriage and have health insurance under the Fed-

eral Employees Health Benefits Program (FEHBP). Is my commonlaw spouse entitled to health benefits?

If you have a valid common-law marriage (with a spouse of the opposite sex), your spouse is considered an eligible family member for FEHBP coverage.

Popular Plans

What are the most popular health insurance plans in the Federal Employees Health Benefits Program (FEHBP)?

If by popular you mean the FEHBP plans with the largest number of enrollees, then the nationwide fee-for-service plans have the largest number of enrollees. Of those plans, the Blue Cross Blue Shield

Service Benefit Plan (BCBS) is far and above the largest. Statistical data published by the Office of Personnel Management show that the federal BCBS plan had 1.3 million employees and 1.1 million annuitants enrolled in 2013. The GEHA (Government Employees Health Association) plan was a distant second with more than 586,000 enrollees, followed by NALC (National Association of Letter Carriers), APWU (American Postal Workers Union) and MHBP (Mail Handlers Benefit Plan).

How does Sick Leave affect annuity?

I am currently employed under the Federal Employees Retirement System (FERS) with about five years to go before retirement. I have more than a year’s worth of sick leave saved. A co-worker and I have been discussing what benefit there is to having an unused sick leave balance at retirement. Can you tell me?

The major benefit to having a balance of unused sick leave is that the unused hours will be used to convert to months, days and, in some cases, years of additional service in the calculation of your annuity. You cannot use unused sick leave to meet the age and service requirements for an immediate retirement, but it does add to the time used to calculate the amount of your annuity.

Retirement formula changes at age 62

I am under the Federal Employees Retirement System (FERS) and will turn age 60 in January 2016. I have 30 years of service. If I go part time and work until I am 62, will my retirement be calculated using the 1.1 percent formula?

Yes, if you retire at age 62 or older and have 20 or more years of service, your FERS annuity will be calculated using 1.1 percent of your high-3 average salary for each year of service, instead of 1 percent.

Impact of Leaving federal service early

I am weighing my employment options. If I leave the federal government before retirement age, do I forfeit all of my retirement benefits?

It depends. You would forfeit a future retirement annuity if you choose to withdraw all of your retirement contributions (a refund) and all the money in your Thrift Savings Plan (TSP) account. By leaving your retirement contributions alone, under the Civil Service Retirement System (CSRS) you would have an opportunity to receive a deferred retirement at age 62 if you had five or more years of civilian service. Under the Federal Employees Retirement System (FERS) you also could receive a deferred annuity

at age 62 with five years of civilian service or at your Minimum Retirement Age (MRA) with at least 10 years of civilian service. However, receiving an annuity at your MRA with 10 years or more of service would result in a lower annuity because it would be reduced for age. You can opt to postpone receipt of your annuity until age 60 if you have 20 years of service and thus avoid the reduction. By leaving your TSP funds in your account, you can choose to purchase an annuity at a later date.

retirees rate expectations for self plus one

I am interested in getting information about the costs for the new self plus one option in the Federal Employees Health Benefits Program (FEHBP). Do you know any details yet, or do we just wait until Open Season in the fall to find out?

The new self plus one option will be available beginning January 1, 2016, and federal employees and retirees will be able to sign up for it during this year’s Open Season. We won’t know rates until just before the beginning of Open Season, but the Office of Personnel Management (OPM) gave some insights into the program in March when it issued its annual “call letter” to the health insurance companies participating in the FEHBP. With regard to w w w. n a r f e . o r g

Questions & Answers

premium costs, OPM told the companies that the costs for the new option must be no more than those for a family option. Specifically, OPM told the companies: “We expect proposals for Self Plus One rates to be lower than Self and Family rates. In no event can Self Plus One rates be higher than Self and Family rates.” In addition, OPM told the insurance companies, “Likewise, benefits that vary between enrollment type, such as catastrophic maximum, deductibles and wellness incentives, should be for dollar amounts that are less than or equal to corresponding benefits in Self and Family enrollment.” The dates for Open Season this

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year are November 9-December 14.

Effects of divorce on spouse’s benefits

My wife has filed for a divorce. If the final divorce is granted, how will it affect the survivor annuity I elected for her at retirement? And what would be the status of my wife’s coverage under the Federal Employees Health Benefits Program (FEHBP)?

The law says once your marriage ends in the death or divorce of your wife, she no longer is eligible for a

survivor benefit or for continued coverage as a dependent under your FEHBP enrollment. However, the law also states that the federal government will honor a state divorce decree incidental to a divorce that awards your wife part of your annuity and/or a future survivor benefit. So if the final divorce decree awards your wife either of these benefits from your annuity, she will be eligible for a monthly benefit, and she will be eligible to enroll in her own plan in the FEHBP. Please note, however, former spouse enrollees in the FEHBP must pay the full premium for the plan they select – that is, both the employee and government shares of the

premium. The Office of Personnel Management has a publication available online that explains court ordered benefits at: www.opm.gov/ retirement-services/publicationsforms/pamphlets/ri38-116.pdf.

Can Spouse retain same FEHBP Plan?

My wife and I are covered under the APWU (American Postal Workers Union) health plan in the Federal Employees Health Benefits Program (FEHBP), and we pay the yearly union dues. If something happens to me, can my wife still stay on the plan even if she was never a federal employee? Can

she pay the union dues to keep the insurance?

Yes, she can continue to pay the required union dues and continue coverage under the APWU health plan. Prior federal employment is not a requirement for survivor annuitants to continue enrollment in an FEHBP plan.

FEGLI Coverage: Is it still in effect?

When I retired, I continued Option C family coverage under the Federal Employees’ Group Life Insurance (FEGLI) Program. I’ve been retired

a long time, and I’d like to know if I am still covered. How do I do this?

FEGLI Option C pays in the event of the death of your spouse or a dependent child under age 22. The basic amounts payable are $5,000 if your spouse dies and $2,500 for the death of a child. You can opt for those amounts (referred to as 1 multiple) or up to five times as much of each of those amounts (up to 5 multiples). If you retired before age 65, you had two choices at retirement: Full Reduction or No Reduction. If you chose Full Reduction, the value of your Option C multiples was reduced by 2 percent of the

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Questions & Answers

pre-retirement amount each month for 50 months. The reduction starts at the beginning of the second month after an individual’s 65th birthday or at retirement, whichever is later. If you elected No Reduction for Option C, your premiums continued to be withheld from your annuity. To find out if your Option C coverage is still in effect or if it ended, you can contact the Office of Personnel Management and ask for a Verification of Life Insurance to be mailed to you. Or you can go to OPM’s Services Online (www. servicesonline.opm.gov) and use your retirement claim number and the Personal Identification Number provided you by OPM to

view and print your Verification of Life Insurance.

date of last annuity supplement Check

For planning purposes, I need to know the date on which my Federal Employees Retirement System (FERS) Annuity Supplement ends. What will be the last annuity check I get that includes the additional amount?

Putting aside the outside earnings limitation that could reduce the FERS Annuity Supplement amount to zero, here is what the Office of

Personnel Management says: “The FERS annuity supplement is paid in addition to gross monthly Federal Employees Retirement System (FERS) annuity benefits. It represents what you would receive for your FERS civilian service from the Social Security Administration (SSA) and is calculated as if you were eligible to receive SSA benefits on the day you retired. Eligibility for the annuity supplement continues until the earlier of: • The last day of the month before the first month for which you would be entitled to actual Social Security benefits, or • The last day of the month in which you reach age 62.”

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Questions & Answers

NARFE at Your Service So, in most cases, the annuity payment dated the first of the month in which you turn 62 will be the last to include the Supplement.

Suspending FEHBP for Tricare for life

I am a retired federal employee and now a retired military officer. Is it true I can suspend my Federal Employees Health Benefits Program (FEHBP) enrollment for significant savings for my wife and me with TRICARE For Life?

Yes, you can suspend your FEHBP enrollment if you are enrolled in TRI-

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CARE or TRICARE For Life. TRICARE For Life provides expanded medical insurance coverage to Medicare-eligible uniformed services retirees age 65 or older, to their eligible family members and survivors, and to certain former spouses. You must enroll in Medicare Part A and Medicare Part B to get TRICARE For Life benefits. 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.

NARFE service officers 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:

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Cover Story Illustration by Bill Pragluski, Critical Stages, LLC

By David Tobenkin

Foreign Service Global Opportunities, Personal Challenges

The year was 1985. Tom Longo, a mid-level U.S. Foreign Service officer serving as chief of Italian affairs at the State Department in Washington, was in the right place at the right time: A serious diplomatic incident had erupted between Italy and the United States related to the aftermath of the hijacking of the Italian cruise ship Achille Lauro in the Mediterranean, during which a retired, wheelchairbound American, Leon Klinghoffer, was murdered. Four Palestinian guerrillas had taken the ship after several days at sea to Alexandria, Egypt, and, joined there by

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Foreign Service their ringleader, Abu Abbas, negotiated safe passage out of the country on an Egyptian state aircraft in return for release of the vessel. Longo was called urgently after hours into the State Department to interpret on the telephone between then-Secretary of State George Shultz and his Italian counterpart, and then at the White House between President Reagan and Italian Prime Minister Bettino Craxi. He helped to negotiate a compromise between the governments to defuse an extremely tense situation in which American commandos and Italian Carabinieri were brandishing weapons as they encircled the Egyptian airliner containing the hijackers, which had been forced to land at the Italian NATO base in Sigonella, Sicily. A few days later, he took further action when the Italians let Abbas go. Longo successfully bolstered the case with his superiors that the United States had other enduring interests with Italy and should not allow them to be jeopardized in its anger over the development. Yet, in 1993, after having received a State Department Meritorious Honor Award citation

Foreign service officers must retire at age 65 and have interim service limits. for “extraordinary devotion to duty and exemplary performance to keep U.S.-Italian relations on course during the Achille Lauro affair” and other accomplishments, Longo was forced to leave the foreign service when he reached his time-in-grade limit under the foreign service’s ruthless up-or-out system and was passed over for promotion, despite, he states, the citation and solid ratings. He strongly and publicly appealed the decision as reflecting flawed 26

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and questionable personnel practices, to no avail. Welcome to the demanding, high-stakes world of the U.S. Foreign Service, where extraordinary experiences and opportunities to serve the nation abroad are matched with extraordinary expectations; dangers; and career, personal and financial challenges.

A Different Career Structure

While some federal civil service employees enjoy opportunities to serve abroad in their careers, for the nation’s 15,785 foreign service members who serve in the State Department, the Agency for International Development, the Peace Corps, and the foreign operations of the Department of Agriculture and the Department of Commerce, it is the essence of their service. Though engaging in diplomatic small talk while quaffing champagne and nibbling canapés at swank soirees may be the popular image of a career in diplomacy, that is the exception rather than the rule. Paying one’s dues is expected, with foreign service officers typically spending an initial four or five years in dangerous and/ or impoverished hardship assignments and high-pressure consular postings, ingloriously processing visa and passport requests, before rising as their talents and opportunities allow. In addition, foreign service officers spend, on average, roughly one-third of their careers in Washington, DC, and other domestic locations. In some respects, foreign service officers are treated like air traffic controllers or federal law enforcement career-track officers with the FBI or Secret Service, as there is a mandatory retirement age, which is age 65 for foreign service officers. Also, similar to those civil service positions, foreign service officers qualify for an unreduced federal pension at age 50 following 20 years of service. But unlike the federal law enforcement categories, and like the U.S. military, there are interim service limits as well, as the foreign service system is up-or-out, with employees expected to be promoted within 10-15 years in many classification levels, and to make the

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Foreign Service senior level of service within 27 years, or they are shown the door. Further, two rankings in the lowest 2 percent by promotion boards can lead to involuntary separation, notes John Naland, director of the State Department’s Office of Retirement. Also like the U.S. military services, foreign service officers agree to serve with the understanding that they may be deployed anywhere the federal government wishes them to serve within the limits of their health. After mandatory assignments for their first five years, foreign service officers bid for subsequent postings around the world. In addition to language and some specialized skills, much can depend on the luck of the draw, and the stakes are high: An assignment to a country where major diplomatic developments occur can make a career. Assignment to a sleepy post can endanger advancement. And, quite often, crises or tragedies and opportunities for meaningful accomplishments and/or career advancement come wrapped in the same event. Jillian Burns says her proudest moment in the foreign service came in September 2013, when she oversaw the local response to a major terrorist attack against the U.S. Consulate in Herat, Afghanistan, including evacuation of most staff, post-attack negotiations with Afghan authorities to address the consulate’s security needs and to mitigate the impact on the city, and arranging a memorial event for the eight Afghan guards killed in the attack. “We had an extensive security team in place, we’d prepared for the worst, and when we were attacked it was my proudest moment to see how well the team performed,” says Burns, who was consul and senior civilian representative for the U.S. Consulate Herat. “No one panicked, everyone was professional, and the security team contained the attack rapidly and skillfully.”

Basic Benefits

Foreign service officer benefits, in many respects, are similar to their civil service counterparts, with certain significant differences.

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The foreign service retirement plan moved from a primarily annuity-driven system to a reduced annuity-Thrift Savings Plan-Social Security benefits “three-legged stool” in 1984, similar to the move the majority of the federal government made with the establishment of the Federal Employees Retirement System (FERS). Foreign service members under the post-1983 Foreign Service Pension System (FSPS) retirement plan are eligible for voluntary retirement with full annuity benefits when they reach age 50 with 20 years of service or when they reach age 62 with five years of service. They can retire with reduced benefits when they reach their Minimum Retirement Age (ages 55 to 57 depending on year of birth) with 10 years of service. FSPS members receive somewhat greater annuity benefits than FERS participants but also pay more for them. They receive an annuity equal to 1.7 percent of their high-3 years’ average salary times their first 20 years of service plus 1 percent of their high-3 years’ average salary times their years of service over 20 years. Electing survivor benefits reduces the annuity. Different rules apply to those who retire with less than 20 years of service. FSPS members are eligible to apply for Social Security benefits starting at age 62 under the same rules that apply to all Americans. FSPS participants (like FERS participants) who retire prior to age 62 receive an annuity supplement that is subject to reduction if the annuitant has earned income. Foreign service members under the pre-1984 retirement plan, the Foreign Service Retirement and Disability System (FSRDS), are eligible for voluntary retirement with full annuity benefits when they reach age 50 with 20 years of service or reach age 60 with five years of service. FSRDS plan members receive an annuity equal to 2 percent of their high-3 years’ average salary times their years of service (up to 35 years). Electing survivor benefits reduces the annuity. Different rules apply to disability retirements and to some law enforcement officers under both retirement systems.

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Foreign Service A total of 15,868 retirees and surviving spouses are served under the two plans, Naland says. Spouses of foreign service officers, many of whom sacrifice their own careers to support those of their spouses, are provided enhanced protection under the Foreign Service Act of 1980. Spouses who are married at least 10 years, including five during which the spouse was employed as a foreign service officer, are guaranteed a portion of the spouse’s pension unless they remarry prior to age 55 or a divorce decree provides otherwise. The State Department, rather than the Office of Personnel Management (OPM), processes foreign service retirement claims. The relatively small number of foreign service officers and the State Department’s almost immediate access to any documents it needs to process claims mean that foreign service officer retirees have been spared the long-standing OPM retirement claims processing backlog and receive benefits almost immediately after retiring, Naland notes. Foreign service officer health and life insurance benefits largely track those of civil service employees, as they participate under the Federal Employees Health Benefits Program (FEHBP) and the Federal Employees’ Group Life Insurance Program. But because members of the foreign service have what could be considered unique work assignments, they also have some unusual benefits. Hardship and danger postings, for example, give employees the opportunity to earn additional income, from 5 percent for some remote locations to up to 35 percent for war zones (though such amounts are not added to annuity calculations), and the government pays for housing abroad.

Similar Concerns

Given that foreign service officers have a basic benefits structure similar to other federal civil service employees, they have many of the same pay and benefits concerns as civil service employees in the current legislative environment, such as securing pay raises and opposing 30

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existing and proposed legislation to increase employee contributions to their pensions, employ less desirable formulas to calculate pension benefits, harm FEHBP benefits and reduce the Social Security annuity supplement, notes Lawrence Cohen, vice president of retirees for the American Foreign Service Association (AFSA), the professional association and labor union of the U.S. Foreign Service. While many foreign service officers are members of the 16,000-member AFSA, some are also members of NARFE. Longo, who currently serves as president of NARFE’s national eChapter 2363 and was a past president, secretary and membership chair of Ocean Area Chapter 2274 in Worcester County, MD, says he belongs because of NARFE’s much larger size and legislative heft. “NARFE has a reputation as the 600-pound gorilla on the Hill for federal employees and retirees,” he says. There are some AFSA concerns that are specific to foreign service officers, says Cohen, who retired from the foreign service in 2007 after 27 years of service. Among AFSA’s priorities are improving training, career mobility, career path and other professional opportunities for foreign service officers; increasing training and resources to improve security for foreign service officers serving abroad; and ensuring approval of overseas comparability pay for foreign service officers. In April 2015, the American Academy of Diplomacy published a report raising more global concerns, such as increased politicization of the service and the apparent desire of some State Department officials to erode its distinctiveness by blending the foreign and civil services. Longo, who was forced to retire after 24 years in the foreign service, and some other foreign service veterans question the wisdom of an up-or-out system for both employees and the foreign service and the fairness of the means by which promotions, and thereby further service opportunities, are granted.

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Foreign Service Financial and Personal Challenges

Foreign service officers face a variety of particular financial challenges. “The foreign service is extraordinarily hard for families,” says Cohen. “It’s not a career in which you will make a lot of money, and spouses often are unable to find work during postings.” Accumulating capital also can be a challenge. The traditional savings vehicle of a house can be hard to realize if one is living outside of the country. With discipline, one can rent one’s house out and have it professionally managed while serving abroad, though many find that difficult. Continual relocations can place extreme stress on marriages. Longo says pressures while he was on the job and associated with his involuntary separation from foreign service contributed to his eventual divorce. Many spouses face reduced career opportunities during postings. Paul Denig, a NARFE member who retired from the foreign service in 2008, says his wife, a classically trained violinist, found few opportunities for her skills in many of his postings, though he says this was at least partially offset by tremendous opportunities for her during his final posting in South Africa, where she played with two orchestras and a variety of small groups, and was asked by the local performing arts center to organize its first volunteer program and to provide pro bono strings instruction to community members who had been denied such opportunities under apartheid. Postings can be hard on children, too, whether they accompany parents or stay stateside. Burns says she retired from the foreign service voluntarily in 2014 with a full pension to dedicate herself to raising her 11-year-old daughter, from whom she was separated during her posting in Afghanistan and the following year while in Washington, DC. “I felt it was my duty to serve in Iraq or Afghanistan – someone has to do it,” Burns says. On the other hand, for some who take their children with them during postings, the world can prove to be their classroom. “We have one daughter who was two-and-a-half years old when I joined the foreign service, and she 32

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accompanied us on our overseas posts to Italy, Zaire, Canada and the USSR,” says Michael Boorstein, who retired as a high-ranking minister-counselor in 2005. “There were relocation challenges, but our daughter thrived in the overseas environment and adapted well,” including learning Italian, French and Russian.

Second Careers

As foreign service members increasingly begin service after other career experience or graduate degrees, many will spend only a limited portion of their careers in foreign service. The young age at which annuities can be accrued, the up-or-out nature of the service, and the age cap further encourage many to look to second careers. Several of those interviewed praised the State Department’s Foreign Service Institute’s Job Search Program (JSP), which addresses all aspects of transition from federal government employment to future employment, entrepreneurship, volunteer work and traditional retirement, including the particular needs of those returning to the United States from postings abroad. Denig says the JSP provided a month of training and counseling on post-foreign service retirement and second-career issues, including helping him to write his first résumé in 25 years, and then provided a subsequent month of job search and support while he was still on the foreign service payroll. Ultimately, Denig opted to pursue an unusual opportunity for re-employment by the State Department under an authority commonly known as the While Actually Employed (WAE) program, under which foreign service annuitants are rehired to fill gaps in staffing or provide expertise on a part-time basis that does not affect their annuity. WAE participants can work up to six months – 1,040 hours – within a year of re-employment, as long as their re-employment salary plus their annuity within a calendar year does not exceed their last salary before they retired. —David Tobenkin is a freelance writer based in the greater Washington, DC, area.

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A Space in Which

Innovation Flourishes The Lab@OPM uses human-centered design process to help solve the federal government’s most difficult problems.

ashington, DC, is filled with government buildings, nearly all of which feature standard-issue office furniture, cubicles, carpeting and signage. Most federal offices in the nation’s capital are as plain vanilla as they can get. But hidden

in the subbasement of one government headquarters building is a surprise – a 3,000-square-foot office area that The Washington Post said resembles “a California-style design center.” The brightly lit, open room, located at the headquarters of the Office of Personnel

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By Everett A. Chasen

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Innovation Flourishes

Management (OPM) at 1900 E Street, NW, houses The Lab@OPM – a unique space designed to foster innovation and collaboration in the federal government. The Lab@OPM is an “innovation laboratory,” defined by the Government Accountability Office (GAO) as a distinct physical space with a set of policies for engaging people and using technology in problem solving. A number of private-sector companies, nonprofit organizations and even other government agencies have labs with similar missions. OPM’s lab serves as the federal government’s center of expertise for applying and teaching human-centered design (HCD) across the government. HCD is a discipline that generates concrete solutions and ideas driven by the needs, behaviors and context of the people for whom they are designed. Lab staff and facilitators are trained to use HCD techniques to help users deliver innovative solutions to solve complex public and cross-sector challenges. The staff also works with teams to test new services, products and processes and to encourage faster learning at the beginning of the design process to avoid large, expensive failures when ideas are eventually implemented. The lab was first conceptualized by OPM in 2011. It opened in the spring of 2012 at a cost of $1.1 million, according to GAO. That summer, 10 OPM employees received advanced training from the LUMA Institute, a Pittsburgh-based

The lab staff works with teams to test new services, products and processes. 36

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team of innovation experts who teach the practice of HCD. These facilitators supported work at the lab while holding down other fulltime jobs at OPM. In February 2013, OPM began hiring fulltime staff to manage the lab’s operations. Its director is Stephanie Wade. Other staffers include Senior Advisor Michael Rawlings; Deputy Director Arianne Miller; and Ashley Wood, a program management specialist who also provides support to another OPM organization. “In the coming months, we will also welcome a new designer, a lead designer and a second program management specialist, all of whom replace previous departures,” says Sydney Smith-Heimbrock, Ph.D., OPM’s deputy associate director for strategic workforce practice and chief learning officer. Lab staff, she says, have a “wide range of skills,” and OPM is working to employ a diverse set of employees who have different and complementary qualities and experiences. The center also has one or two additional individuals on staff loaned from other federal agencies. These men and women learn about the lab’s practices and procedures so they can apply those techniques in the work of their own departments and agencies.

HOW THE LAB WORKS

According to GAO, innovation labs such as The Lab@OPM are based on the idea that the skills needed to conduct systematic innovation – such as intelligent risk-taking to develop new services, products and processes – are not the same as those required to conduct day-to-day operations. Innovation labs provide approaches, skills, models and tools most employees either don’t have or don’t often use in their work. In a 2012 interview with Federal News Radio, Matt Collier, formerly a senior advisor to OPM’s director and now a LUMA employee, described the objectives of the lab. “It’s really neat,” he said, “to see how not only the lab itself but the process changes people’s lives. “When you watch people come into the room at the beginning of a design process, with their arms folded, saying, ‘What is this

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gonna do? We’ve tried solving this for 10 years,’ and then watch them leave the room after a day of taking part in a structured, facilitated, problemsolving session; to see how the look on their faces changes, and to see how it changes the attitudes of people all over the organization, is really quite amazing.” Collier discussed how the design of the space included features that increase collaboration. Employees, he explained, can have plenary sessions in the middle of the room and then conduct breakout sessions in smaller groups. The tables, chairs and whiteboards in the room are all on wheels and can easily be rearranged “without losing sight of people, and without losing the energy and momentum of the session.” Collier said that the overall look and feel of the place triggers cues for employees to think differently. He contrasted the lab’s design to that of a traditional office conference room, with a rectangular or a U-shaped table. In this type of set-up, he said, people in power drive the conversation and are “forcing people to settle on what the problem is, let alone how to solve it.” “In the HCD process, we train teams on employing a ‘yes, and’ culture that recognizes the validity of all ideas, instead of dismissing them,” Smith-Heimbrock says. “We do this by teaching the importance of finding the positives in all ideas, and building on them together as a team toward something even greater.” “At this stage, we are keeping our operations very low-tech,” she adds, “relying mostly on Sharpies®, Post-it® Notes, and – most importantly – skilled designers and facilitators who employ a variety of design methods.” The center does have some technology-based equipment to support remote communication and collaboration, but “technology alone doesn’t make you innovative – people do,” she observes.

GAO’s REPORT

On March 14, 2014, GAO released a report that compared The Lab@OPM to other organizations’ innovation labs, including how the lab used benchmarks and metrics to assess its work, and how it addressed challenges to accomplishing innovation. GAO reviewed cost, staffing and performance information, and relevant literature on innovation. 38

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The office also interviewed officials from public, private and nonprofit organizations with innovation facilities similar to The Lab@OPM. GAO recommended that lab staff should maintain a mix of performance targets and measures to help them monitor and report on progress toward the lab’s goals, and to build on existing efforts to share information with other agencies that have innovation labs. In response, OPM Director Katherine Archuleta wrote, “we ... appreciate and accept the report’s recommendation that we do more to foster a government-wide community of innovators .... There is an enormous untapped potential in bringing ongoing innovation efforts together to share with and learn from each other.”

PROJECTS CURRENTLY UNDERWAY

Lab Director Wade cites three projects the lab has undertaken that have significantly benefited the federal community and those who use government services. First, and important to many NARFE members, is the lab’s partnership with OPM’s Retirement Services Division to improve the division’s customer service. For six months in 2014, the lab staff worked closely with Retirement Services and OPM’s chief information office to better understand customer needs and behavior. The team generated a suite of ideas to improve the experience of federal employees as they interacted with Retirement Services. These ideas are now in the process of being implemented. A member of the staff that developed the ideas, Sarah Hassmer, was reassigned to help with the implementation process. A second project is a partnership between the lab and the USAJOBS program team, which is also part of OPM, to improve the user experience of those who apply for employment with the federal government. “We defined users in this project broadly,” Wade explains. “Not just applicants, but also the people doing and supporting the hiring. Then we built an understanding of the needs of different users on a meaningful level – how their needs drive behaviors in the integrated system.” The project team conducted ethnographicbased research (research based on participant observation in the space in which these partici-

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pants actually live, work and play) to get a deep understanding of the needs of those who use USAJOBS.gov. They held one-on-one interviews and focus groups throughout the nation. These interviews and focus groups helped the team understand what brought people to the government in the first place; the steps they took to get hired; and their experiences with and responses to different Web pages, visual cues and messages. Finally, participants were asked to compare their USAJOBS.gov experience with other hiring and Web experiences they had had. The team then put the data they gathered on Post-it Notes in the lab project room “because human beings are inherently visual by nature,” Wade says. “By having all the data in our field of sight and on Post-Its, we can move data around quickly so that our brains can make associations between the data that yield significant insights.” They used the data to develop insights about behaviors of individuals to understand the real needs of individuals who use USAJOBS.gov. Those insights will be used to develop creative ideas that address people’s needs, and the project team will get feedback from the public and develop changes that will address users’ needs. Wade expects those changes to be available to the public next winter. The third project mentioned by Wade is the lab’s support of the U.S. Department of Agriculture (USDA) School Lunch program. USDA, Wade says, “has always striven to improve its connection with the people who need these programs the most.” Many parents and school officials, however, have reported that the application process to enable students to receive free or reduced-price meals can be both burdensome and confusing. USDA partnered with The Lab@OPM to approach this problem from a new perspective, with a specific focus on the needs of those who used the application process, and on improving USDA’s understanding of users’ expectations and behaviors. After months of research and interviews with key stakeholders, the team working on this project designed a new, streamlined sample application form to make the enrollment process simpler for both parents and school staff – while better ensuring that free and reduced-price meals go only to children who are eligible for them. 40

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The lab conducts monthly “boot camps” on how to accomplish human-centered design projects. The team then worked with schools throughout the nation to test the new forms and identified additional design improvements. The new sample applications and related materials are expected to be available nationwide in July.

THE LAB’s FUTURE

Besides the USDA and USAJOBS processes, The Lab@OPM is conducting monthly “boot camps” on how to accomplish human-centered design projects. These boot camps are open to all federal employees. The lab is working with agencies throughout the federal government and the White House’s Office of Science and Technology Policy to develop a toolkit for innovation programs throughout the federal government. Lab staffers also are developing sessions that will bring federal innovators together to share best practices and lessons learned and are leading HCD-based facilitation sessions with other agencies to help them find new ways to solve longstanding challenges. The future for the lab looks bright. “OPM is proud to be a part of [the] growing community of innovation practices, and draw on these best practices for inspiration as we work to develop the lab’s quality program,” wrote OPM Director Archuleta. “The lab’s program plans include long-term projects with measurable outcomes, sustained thought leadership, a community of practice and a more mature overall evaluative framework,” she concluded. —Everett A. (EV) Chasen is a retired federal employee and a regular contributor to NARFE magazine.

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Call Beltone at 1-888-418-6763 to schedule your complimentary hearing screening, today! *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. State and local taxes and/or fees may apply. Available at participating locations until September 30, 2015.

Managing Money

Living trusts ensure control, privacy

revocable living trust is an estate-planning tool you might want to consider to ensure your assets are cared for and used as you desire in the

event of your death or incapacitation. There are several documents everyone should have regardless of health, wealth or age: a will, durable power of attorney and advanced medical directives. The question of whether a revocable living trust is appropriate for you depends on your goals and objectives. Let’s take a look at the basics of revocable living trusts (which we’ll refer to simply as living trusts), including benefits you may find attractive. A living trust is a separate legal entity created to own assets, such as homes and investment assets. One of its key features is the ability to maintain complete control over the trust and trust assets. Prior to death, the trust remains revocable, which means you may use trust property, amend the trust terms or even revoke the trust entirely. At your death, the trust becomes irrevocable, and, depending on the terms you set, your appointed trustee may distribute the assets or continue to manage the trust for the benefit of your beneficiaries. Living trusts provide several key benefits. For starters, unlike a will, which typically distributes a percentage or specific value of property in one lump sum, a living trust provides the ability to control the manner 42

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and timing of asset distributions to heirs. For instance, you could direct your trustee to pay the college tuition of a beneficiary or distribute assets when a specific milestone, such as a beneficiary’s 30th birthday, is reached. You could even use the distribution of trust assets as a reward or enticement for a desired outcome, such as obtaining an MBA degree. Living trust assets also avoid probate, the court-supervised process an estate goes through to manage, settle and distribute property according to the terms of a will. Assets subject to probate generally consist of property you own individually, while certain assets with beneficiaries, retirement plans, life insurance and property held in trust pass outside of your will and are not subject to probate.

By Mark A. Keen,

CFP®

There are several reasons you may wish to avoid probate. The first is the time factor. Probate can take from a couple of months to a couple of years, and assets typically are not distributed to beneficiaries until the end. Trust assets, on the other hand, typically can be transferred without delay. Avoiding probate also may help reduce the administrative burden associated with settling an estate. During probate, executors must file certain documents with the probate court to take inventory of the deceased’s probate assets and to document the distribution of those assets to the rightful beneficiaries. Additionally, when the deceased owns real estate in more than one state, probate is typically required in each state where property is owned, further complicating matters. Finally, avoiding probate helps protect privacy. Probate is public record, and all the documents filed during the process, including the will and documentation of assets, are public record as a result. Anyone concerned about privacy may want to consider a living trust because, in most cases, the trust document and property distribution remain private. In addition to the post-death benefits, living trusts facilitate the management and protection

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

of property in the event of incapacity. If your assets are held in trust and you become incapacitated, your trustee can take immediate control of your property and use it for your care and support – or in whatever way you directed in the trust terms. It’s also important to point out what living trusts don’t do. First, living trusts won’t reduce income taxes or estate taxes. Many living trusts will have provisions to fund an irrevocable trust at the death

of the first spouse for estate tax planning purposes, but the living trust itself has no effect on estate taxes. Due to recent changes in estate tax rules, many of these arrangements need to be reviewed for their efficacy. We’ll discuss this in greater detail next month. Furthermore, because you have full control over the assets held in a living trust, they do nothing to protect your assets from creditors, nor help you achieve Medicaid eligibility. Estate planning is complex, and this column barely scratches the surface on living trusts. Hopefully, though, it provides food for thought and a catalyst to further conversations with your estateplanning attorney. 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

Federalism and retirement savings

he Federal Employees Retirement System (FERS) was established in 1986 in the aftermath of Social Security reform that included mandatory Social Security coverage for newly hired federal employees. With the enactment of FERS, and the closing to new employees of the Civil Service Retirement System (CSRS), the federal government joined the decades-long shift away from pensions and toward alternative (hybrid) systems of saving for retirement. Financial professionals refer to this as the shift from defined benefit (DB) plans to defined contribution (DC) plans. Some DB defenders, aware of pension envy (largely private-sector workers without any plan), do not support any DC plans, calling these plans a race to the bottom. States Consider Their Role in Retirement Savings Despite the fact that only half of American households own a retirement account, a federal policy solution has not materialized. States, as laboratories of democracy, are stepping into this void. Now, more than a dozen state governments are considering their role in addressing retirement savings. States, including California, Connecticut and Oregon, have pending legislation, but only Illinois has enacted a plan. In January, then-Governor Pat Quinn signed the Illinois Secure Choice Savings Program Act. Introduced by state Sen. Daniel Biss, Illinois Secure Choice is designed to create access to long-term savings plans for up to 2.3 million Illinois private-sector workers.

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How Illinois Secure Choice Will Work In Illinois, if your employer has been in business for more than two years, has 25 or more employees and doesn’t already offer retirement benefits, you automatically get an individual retirement investment account known as a Roth IRA. Each paycheck, 3 percent of your wages automatically goes into the account through payroll deduction. You can opt to deduct a smaller or larger percentage. Or you can opt out of the retirement savings altogether. What Should NARFE Do? Where NARFE federations have published a state advocacy plan, they have selected a mixture of specific benefits – favorable tax treatment of federal retirement benefits – and other issues

By Christopher Farrell, senior analyst

benefiting a broader public. Maryland has embraced campaign finance reform, including partial public financing of legislative candidates. Virginia’s plan advocates no-fault absentee voting for seniors and legislative transparency. In both states, our federations engaged in coalition campaigns – United Seniors of Maryland and Transparency Virginia. NARFE federations eager to defuse pension envy and become involved in coalition efforts for a greater good might embrace cutting-edge legislation to provide a means for the other half of workers – those without any employer-sponsored plan – to prepare for retirement. CSRSand FERS-covered employees and retirees working together could simultaneously prove politics is the art of the possible and avoid letting the perfect be the enemy of the good. Resources for Further Information On April 1, the Asset Building Program of the New America Foundation, a nonprofit policy think tank, conducted a panel discussion titled “Retirement Security Federalism: Illinois Secure Choice and Future of Savings.” View that event at http:// bit.ly/1DdPQwO. For a summary of the new law, produced by Sen. Daniel Biss, use http://bit. ly/1G41oU7.

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Alzheimer’s Update

Research seeks early identification

lzheimer’s disease is identified by plaques and tangles in the brain. The plaques are caused by beta-amyloid protein clumping together. These have been found

in people as young as 20 years of age and may block cell-to-cell communication. Normally, tau protein stabilizes the microtubules that provide nourishment and remove waste from brain cells. It may, however, become toxic and form twisted fibers, or tangles, inside the microtubules. If this happens, nutrients and other essential supplies can no longer move through the microtubules to the cells, and the cells eventually die. Several research projects are underway to find an early diagnosis of Alzheimer’s disease. Presently, Alzheimer’s cannot be detected until its victims are in the moderate-to-late stages of the disease. These projects range from skin tests, smell tests and retinal imaging to spinal taps. One promising research project that aims to identify and treat patients in the earliest stages of the disease is the Anti-Amyloid Treatment in Asymptomatic Alzheimer’s study (“A4 study” for short). The overall goal of the A4 study is to determine whether decreasing plaques with a drug can help slow memory loss in some people. This project is being led by Dr. Reisa Sperling of Massachusetts General Hospital in Boston and involves a 1,000-patient clinical trial. Patients accepted into the trial already have deposits 46

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of beta-amyloid in their brains. When beta-amyloid is present, researchers say it seems to open the door for tau protein to spread to other parts of the brain, causing widespread cell death and cognitive decline. The trial will test whether a new investigational treatment, called an anti-amyloid antibody, which removes plaques, can slow memory loss caused by Alzheimer’s. Several companies have developed drugs to remove plaques in the brain, but they have failed to slow the disease. Sperling and other scientists believe the drugs were introduced too late, journalist Julie Steenhuysen wrote in a March 3 article on the A4 study for Reuters. In the United States, all drugs must go through rigorous clinical trials, testing for safety and effectiveness, before they can be submitted to the Food and Drug Administration (FDA) for ap-

By Merv Stuckey, NARFE-alzheimer’s Chair

proval to market them. To date, the FDA has approved two types of medications to treat the cognitive symptoms of Alzheimer’s disease. These are cholinesterase inhibitors (such as Aricept, Exelon, Razadyne and Cognex) and memantine (Namenda). The cholinesterase inhibitors treat Alzheimer’s symptoms in early-to-moderate stages of the disease. Memantine is approved by the FDA for moderate-to-late treatment of Alzheimer’s. While current medications cannot stop the damage that Alzheimer’s does to brain cells, they may help lessen or stabilize symptoms for a limited time. Alzheimer’s disease was identified in 1906. It continues to be an incurable disease affecting more than five million people in the United States. Approximately 500,000 afflicted people die each year; and every 67 seconds someone in the United States develops Alzheimer’s. Research is ongoing, but no cure has been found. The progress of the disease can be slowed but not stopped. Are we close to a cure? Many scientists believe that a cure for Alzheimer’s or a means of preventing it will be available by 2025. Let’s hope so. Merv stuckey is chair of the NARFEAlzheimer’s National Committee. email: narferoadrunner@comcast.net. This column appears quarterly.

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2015

2014

2015

2014

For the Record

Thrift Savings Plan Monthly Returns G FUND

F FUND

C FUND

S FUND

I FUND

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%

DECEMBER

0.18%

0.21%

(0.24%)

0.99%

(4.13%)

JANUARY

0.18%

2.13%

(2.99%)

(1.85%)

1.19%

FEBRUARY

0.13%

(0.91%)

5.75%

6.05%

5.97%

March

0.16%

0.47%

(1.57%)

1.24%

(1.43%)

APRIL

0.15%

(0.28%)

0.96%

(1.50%)

4.11%

YTD

0.62%

1.40%

1.94%

3.81%

10.05%

LAST 12 MO

2.15%

5.09%

13.06%

11.71%

1.93%

10 yr

3.19%

4.89%

7.72%

9.44%

4.58%

L INCOME

L 2020

L 2030

L 2040

L 2050

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%)

AUGUST

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%

DECEMBER

(0.04%)

(0.50%)

(0.67%)

(0.76%)

(0.94%)

JANUARY

(0.08%)

(0.58%)

(0.83%)

(1.02%)

(1.18%)

FEBRUARY

1.19%

2.95%

3.80%

4.39%

4.99%

(0.07%)

(0.44%)

(0.58%)

(0.64%)

(0.76%)

APRIL

0.37%

0.81%

0.95%

1.00%

1.16%

YTD

1.41%

2.73%

3.32%

3.69%

4.16%

LAST 12 MO

3.96%

6.14%

7.27%

8.04%

8.58%

SEPTEMBER

MARCH

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

I fund shows big gain in april, while F and S funds fall The I Fund had a sharp rise in April, helped by a decline of almost 3 percent in the U.S. dollar. The C Fund climbed, helped by gains in energy stocks, which rose with a 20 percent gain in the price of crude oil. The S Fund, with less exposure to energy stocks, fell due to weakness in consumer discretionary and biotech stocks. The Federal Reserve continues to signal an eventual rise in interest rates, pushing the 10-year yield higher and causing a small decline in the F Fund. —BY Ravindra Deo, Chief Investment Officer, Thrift Savings Plan

Countdown to cola

he Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 0.71 percent in March. 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. March’s index, 231.055, is down 1.36 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. March’s index is 0.50 percent higher than the December 2014 base index of 229.909. 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

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Monthly % Change

% Change from 234.242

October 2014

233.229

-0.40

-0.43

November

231.551

-0.72

-1.15

December

229.909

-0.71

-1.85

January 2015

228.294

-0.70

-2.54

February

229.421

+0.50

-2.06

March

231.055

+0.71

-1.36

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.)

CPI-W

May June July August September

Donate to NARFE Programs Support Alzheimer’s Research

Your charitable contribution is tax-deductible to the fullest extent allowed by law.

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 March 31, 2015 3-Digit Security Code: 100% of all contributed funds go to Name: (please print) Email: narferoadrunner@comcast.net

$11,286,041* Alzheimer’s research.

Signature

Join the Silver CIrcle Clip this contribution form and mail to: NARFE Silver Circle, 606 N. Washington St. Alexandria, VA 22314

•For a contribution of $25 or more, you will receive a Silver Circle pin, and your name will be listed in narfe magazine with other contributors. •For a contribution of $1,000 or more, your name will be placed on the “Wall of Fame” at NARFE Headquarters.

YOUR CHARITABLE CONTRIBUTION IS TAX-DEDUCTIBLE TO THE FULLEST EXTENT ALLOWED BY LAW.

Enclosed is my Silver Circle contribution: $ ID # (ID # may be found on your narfe magazine label or your NARFE membership card)

Name: Address: City: Silver Circle contributions are NOT deductible for federal income tax purposes.

Installment Plan Wall of Fame 12-month installment plan

Give to the Scholarship and Disaster Funds

Please mail coupon and check to: FEEA 3333 S. Wadsworth Blvd., Suite 300 Lakewood, CO 80227

All donations go to the NARFE General Fund to support NARFE programs and operations.

State:

ZIP:

My check is enclosed

(Please make check payable to NARFE Silver Circle.)

Please charge my credit card Card type MasterCard VISA Discover AMEX Card Number: Expiration Date: (mm)/ (yy) Name: (please print)

Signature

Make check payable to: NARFE-FEEA Disaster Fund or NARFE-FEEA Scholarship Fund.

Date

YES!

Date

I would like to help with my contribution.

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

Amount: $

NARFE-FEEA Scholarship Fund

Amount: $

Name: Address: City:

State:

ZIP:

NARFE News

floral theme for 2015 cards

hotos from the 2015 NARFE Photo Contest are featured in the Association’s spring note card fundraising solicitation. For the first time, all five of the cards in this year’s collection are blank note cards with no specialoccasion greeting. NARFE hopes this will increase their utility yearround, noting that the cards can be used for any purpose – including dropping a note to your members of Congress to support NARFE’s legislative agenda. Also new this year, the note cards have a floral theme. The cards were mailed to members on April 21. “Please enjoy these note cards as our gift to you for your continued support of NARFE,” says President Richard G. Thissen. “Right now, we are facing un-

Silver circle Donors Update As of April 15, 2015, NARFE’s Silver Circle donation program stands at $135,202. The program gives members a vehicle to donate to the Association beyond the norm. NARFE President Richard G. Thissen noted that donations to the fund have slowed substantially and urged members to consider the Silver Circle program as a means of showing their

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precedented budget proposals that threaten sharp increases in health care costs for current and retired feds, a 6 percent increase to the retirement trust fund for current workers, and the list goes on. “Your support of NARFE is more important than ever,” Thissen says, adding that NARFE appreciates any contribution members can make to help continue the fight on Capitol Hill to defend their benefits. 2015 Note Card Photos. Photos and the photographers who took them are, from left to right above: • “Richardson’s White Geranium After Rain,” Marsha A. Goetting, Bozeman, MT / Chapter 843; • “Gray Barn With Lilacs,” Leo Andrew Hofmeister Jr., Simpsonville, SC / Chapter 121; • “Tulips at Longwood Gardens,

PA,” David Harrah, Bel Air, MD/ Chapter 2363; • “Budding Beauty,” Debra Roy, Laurel, MD / Chapter 422; • “Spring Splendor,” Al Giencke, Plymouth, MN / Chapter 0150. Other winning photographs in the 2015 NARFE Photo Contest will be used in the 2016 NARFE calendar, which will be mailed to members in the fall. NARFE Photo Contest. The photo contest is open to all NARFE members except professional photographers. Photos must be horizontal in format and submitted as prints measuring 8-by-10 inches or 8 1/2-by-11 inches. The 2016 calendar contest will open August 1 and run until March 15, 2016. See www.narfe.org for more details.

appreciation for NARFE’s activities on their behalf. Donors of $25 or more are listed in narfe magazine and receive a Silver Circle pin. Donors of $1,000 or more have their names engraved on the Wall of Fame at NARFE Headquarters. Donors from December 16, 2014-April 15, 2015, are listed here with their chapter numbers: Arizona: Richard Florence, 0266. Colorado: Robert A. Stucklen, 0821; Dennis Jones, 0821; Gregory Kann, 1085. Illinois: James Milgrim, 1067; Lee Regner, 1309.

Maryland: Michael Deitchman, 0357; Edward E. Priest, 1734; Betteanne M. Priest, 1734. Massachusetts: Joseph S. Vera, 0034. Missouri: Roger S. Davis, 0991. New Jersey: Bernard Keany, 0637. Oklahoma: Nancy Greenlee, 0542. South Carolina: Wilson A. Zerfass, 1015. Texas: Paul Aylward, 1273. Virginia: Jonathan D. Kaskin, 0893; Vernon L. Wong, 1241; Rolfe F. Pitts, 1241; Karen Cheatwood, 2065. Washington: Arlene E. Cooke, 1404. West Virginia: E. Jean Samples, 0174; Mary Ann Marans, 1579.

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Strategic Planning April Update

s we reported in tee, presided over the April isthe meeting, with sue of narfe consultant Lou magazine, delegates Ann Sabatier voted at the 2014 facilitating the National Convention discussion. secure to continue the straThe group met tegic planning proin four sessions the cess using the Future over the two days, future of NARFE Report as beginning with a its foundation. A Strageneral discussion in tegic Planning Team and a the first session, then Standing Committee have been addressing 12 items recomappointed, a process has been defined mended by the Strategic Planning and work has begun to develop Team and the National Executive an evolutionary plan for NARFE’s Board (see “Strategic Planning Upfuture success. date, March 30, 2015,” at www.narfe. The planning team includes two org). All discussion led to a consenregional vice presidents, a National sus of the group that was expressed Officer and a staff director. Adin the following set of strategic goals: ditional staff will be called upon “To ensure/secure the future of for support. The 11-member StraNARFE, we should tegic Planning Committee includes “a. Transform governance to be thought leaders of varied backmore efficient, effective, agile, congrounds from the NARFE membersistent and accountable; ship. (See sidebar at right.) “b. Establish a consistent brand The Strategic Planning Committo increase awareness, eliminate tee met for two days during the first confusion and convey the value of week of April at NARFE HeadquarNARFE; ters. NARFE President Richard G. “c. Stabilize and grow membership Thissen welcomed the group and to support effective advocacy and to encouraged it to take all the data deliver financial stability.” (from the previous studies) and the As mentioned above, the 12 items recommendations from the Straterecommended for review by the gic Planning Team and derive ideas Strategic Planning Team and the that are best for NARFE and can be National Executive Board to the communicated as such to all stakeStrategic Planning Committee were holders. discussed carefully, taking into conNARFE Secretary/Treasurer Jon sideration NARFE’s need to become Dowie, who chairs both the Strategic more agile and attract more memPlanning Team and the Commitbers. Although there appeared to

s t rat e g i c p l an N I N G

The majority of NARFE members do not have an email address in their member record, so they are in the dark when NARFE issues Action Alerts on legislation that threaten their benefits. To add your email address to your record, call toll-free 800-456-8410 or go online to www.narfe.org, log in and select “Update My Record.”

be consensus on many of the items, they will continue to be reviewed at the next Committee meeting. We welcome your thoughts. You may contact us through the dedicated email address, stratplan@ narfe.org. While we cannot answer every email, all comments are important and will be given full consideration. —By Jon Dowie, national secretary/treasurer; chair, Strategic Planning Team; and chair, Strategic planning Committee

Strategic Planning Team Jon Dowie, National Secretary/ Treasurer, chair James Crawford, Regional Vice President (RVP) Region I Evelyn Kirby, RVP Region II Bridget Boel, Marketing Director

Strategic Planning Committee Jon Dowie, National Secretary/ Treasurer, chair Region I Dave MacDonald, Rhode Island Region II Ted Jensen, Maryland Region III Bill Leatham, Florida Region IV Nancy Hunt, Ohio Region V Bruce Coleman, Iowa Region VI Charles Stanphill, Oklahoma Region VII Ted Van Hintum, Colorado Region VIII David Southworth, California Region IX Chuck Brodigan, Oregon Region X Gaston Gianni, Virginia

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Special Section

National Active and Retired Federal Employees Association

Consolidated Financial Statements for the Year Ended December 31, 2014

REPORT OF THE NATIONAL SECRETARY/TREASURER For the third year in a row, NARFE’s net assets have increased overall, although we had a slight decrease in net assets related to operations of $108,727. That decrease was related to delayed delivery of our holiday card fundraising packages, which meant that some of the contributions for 2014 were not recognized until 2015 when they were received. To maximize efficiency and even out the workflow, the Postal Service delays some mail delivery in the category in which these packages are mailed. We continue to benefit from the efforts of our previous Treasurer and many of the staff. For example, we recently renegotiated the printing contract for narfe magazine, and we look forward to cost reductions in the future. We upgraded the accounting system and replaced the telephone system. The savings from those changes were not fully reflected in 2014, but will benefit 2015 and succeeding years. Contributions related to NARFE-PAC, Protect America’s Heartbeat, Silver Circle and other programs have decreased, and we will highlight those areas in 2015. We had some increased costs related to our National Convention, and our net loss was a bit larger than the previous convention. We have found ways to improve this in the future. Overall, we continue to maintain stability in the face of decreased membership and related revenue. We are finding more efficient ways to operate and are focusing on areas such as nondues revenue that should benefit us in the future. My thanks to the entire NARFE staff, especially those who work with me in the Budget & Finance Department, for their continued support of our organizational improvements.

Jon Dowie, National Secretary/Treasurer

REPORT OF THE NATIONAL EXECUTIVE BOARD AUDIT COMMITTEE The National Executive Board (NEB) Audit Committee met April 1 by teleconference with representatives of the audit firm Councilor, Buchanan & Mitchell, P.C., Certified Public Accountants, to review the Association’s audit of NARFE finances for the calendar year ended December 31, 2014. The NEB Audit Committee members participating were Region IX Vice President Lanny G. Ross (Chair), Region III Vice President Jerry Janci and Region X Vice President William Shackelford. Also participating were NARFE President Richard G. Thissen, Secretary/Treasurer Jon Dowie and Budget & Finance Director Tayo Coker. The audit firm’s representatives, John Mullins and Peter Reilly, provided a comprehensive review of NARFE’s Consolidated Financial Statements and Supplementary Information Audit. They reported finding no weaknesses. The audit confirmed an increase in net assets at 2014 year-end in comparison to previous years. With the declining NARFE membership, it should be noted that the auditors indicated that they were pleased to see that NARFE’s financial situation continues to improve, largely as a result of membership services and fundraising. The NEB Audit Committee accepts the report. Based upon the report, the Committee commends the Budget & Finance staff for their continued excellent performance.

Lanny G. Ross, Chair w w w. n a r f e . o r g

Independent Auditors’ Report The Executive Board National Active and Retired Federal Employees Association Alexandria, Virginia Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statements of National Active and Retired Federal Employees Association, which comprise the consolidated statement of financial position as of December 31, 2014, and the related consolidated statements of activities and cash flows for the year then ended, and the related notes to the consolidated financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the Association’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Association’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of National Active and Retired Federal Employees Association as of December 31, 2014, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. 54

Councilor Buchanan & Mitchell, P.C. Certified Public Accountants Bethesda, Maryland April 1, 2015

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National Active and Retired Federal Employees Association and Affiliate Consolidated Statement of Financial Position December 31, 2014 (With Comparative Totals as of December 31, 2013 and 2012) National Active and Retired Federal Employees Association and Affiliate

National Active and Retired Federal Employees Association and Affiliate Consolidated Statement of Financial Position 2014 Consolidated Statement of Financial Position December 31, 2014 Unrestricted (With Comparative Totals as of December 31, 2013 and 2012) December 31, 2014 (With Comparative Totals as of December 31, 2013 and 2012) Board Total Temporarily 2014 2013 Operating

Designated

Unrestricted 2014

Total

Restricted

Assets Unrestricted Current Assets Board Total Temporarily Cash and Cash Equivalents Operating $ 408,649Designated $ 200,354Unrestricted $ 609,003 Restricted $ 446,322 Short-Term Investments Assets Accounts Receivable - Net 115,046 115,046 9,642 Receivables 1,391 1,391 423 CurrentInterorganization Assets Expenses and Deposits 143,922$ 200,354 143,922$ 446,3225,620$ Cash Prepaid and Cash Equivalents $ 408,649 $- 609,003 Investments 2,897,904 2,977,473 5,875,377 Short-Term Investments Accounts Receivable - Net 115,046 115,046 9,642 Total Current Assets 3,566,912 3,177,827 6,744,739 462,007 Interorganization Receivables 1,391 1,391 423 Prepaid Expenses and Deposits 143,922 143,922 5,620 Investments 2,897,904 2,977,473 5,875,377 Property and Equipment Land 700,000 700,000 Total Current Assets 3,566,912 Buildings 4,257,398 3,177,827 - 6,744,739 4,257,398 462,007 Furniture, Equipment, and Property and Equipment Software 2,073,888 Land 700,000 Less Accumulated Depreciation Buildings 4,257,398 and Amortization (3,234,780) Furniture, Equipment, and Software 2,073,888 Net Property and Less Accumulated Equipment 3,796,506 Depreciation and Amortization (3,234,780) Total Assets $ 7,363,418 Net Property and Equipment Liabilities and Net Assets 3,796,506

2,073,888 700,000 4,257,398 (3,234,780) 2,073,888

3,796,506 (3,234,780) $ 3,177,827 $10,541,245 -

56,391 469,203 3,372,140 4,236,061

Net Assets Noncurrent Deferred Revenue Unrestricted TotalTemporarily Liabilities Restricted

451,109 3,596,560 3,766,858 -

412,812 863,921 2,708,624 6,305,184 469,203 - 4,236,061 -

Net AssetsTotal Net Assets Unrestricted Total Liabilities and Temporarily Restricted Net Assets Total Net Assets

3,596,560 2,708,624 6,305,184 3,596,560 2,708,624 6,305,184 $ 7,363,418 $ 3,177,827 $10,541,245 3,596,560 2,708,624 6,305,184 $ 7,363,418

$ 3,177,827

$10,541,245

2014 $ 1,055,325 Total 124,688 149,542$ 1,055,325 5,875,377 124,688 7,204,932 - * 149,542 5,875,377 700,000 7,204,932 * 4,257,398

2013 $ 1,155,293 Total 214,434 * 119,418$ 1,155,293 5,542,094 214,434 * 7,031,239 - * 119,418 5,542,094 700,000 7,031,239 * 4,179,268

2,073,888 700,000

2,301,393 700,000

2012 Total

2012 $ 1,739,659 Total 184,231 * - * 121,445 1,739,659 4,893,090 184,231 * 6,938,425 * - * 121,445 4,893,090 700,000 6,938,425 * 4,150,120 1,534,877 700,000

4,257,398 4,179,268 4,150,120 (3,234,780) (3,250,101) (2,914,751) 2,073,888 2,301,393 1,534,877

3,796,506 3,930,560 3,470,246 (3,234,780) (3,250,101) (2,914,751) 462,007 $11,001,438 * $10,961,799 * $10,408,671 * -

3,315,749 3,766,858

Total Liabilities and Net Assets

3,796,506

Total Assets $ 7,363,418 $ 3,177,827 $10,541,245 $ Current Liabilities Accounts Payable and Accrued Expenses $ 593,714 $ $ 593,714 Liabilities and Net Assets Interorganization Payables 423 1,391 1,814 Dues Payable 118,126 118,126 CurrentChapter Liabilities Deferred Revenue 2,603,486 55,000 2,658,486 Accounts Payable and Accrued Expenses $ 593,714 $ $ 593,714 $ Total Current Liabilities 3,315,749 56,391 3,372,140 Interorganization Payables 423 1,391 1,814 Chapter Dues Payable 118,126 118,126 Deferred Revenue 55,000 Noncurrent Deferred Revenue 2,603,486 451,109 412,812 2,658,486 863,921 Total Current Liabilities Total Liabilities

Total

462,007

3,796,506

3,930,560

3,470,246

$11,001,438 * $10,961,799 * $10,408,671 *

40,700 $ 634,414 $ 504,794 $ 522,080 - * - * - * 118,126 125,993 118,977 2,658,486 2,784,387 2,924,761 40,700 $ 634,414 $ 504,794 $ 522,080 40,700 3,411,026 * 3,415,174 * 3,565,818 * - * - * - * 118,126 125,993 118,977 - 2,658,486 863,921 2,784,387 968,379 2,924,761 991,264

40,700 * 3,415,174 * 3,565,818 * 40,700 3,411,026 4,274,947 * 4,383,553 * 4,557,082 * 863,921 968,379 991,264 6,305,184 6,251,554 5,462,044 40,700 * 4,383,553 * 4,557,082 * 421,307 4,274,947 421,307 326,692 389,545 -

421,307 6,726,491 6,578,246 5,851,589 6,305,184 6,251,554 5,462,044 421,307 421,307 326,692 389,545 $ 462,007 $11,001,438 * $10,961,799 * $10,408,671 * 421,307 6,726,491 6,578,246 5,851,589 462,007

$11,001,438 * $10,961,799 * $10,408,671 *

* Interorganization receivables and payable eliminated in consolidation. See accompanying Notes to Consolidated Financial Statements.

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* Interorganization receivables and payable eliminated in consolidation. See accompanying Notes to Consolidated Financial Statements.

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National Active and Retired Federal Employees Association and Affiliate National Active and Retired Federal Employees Association and Affiliate Consolidated Statement of Financial Position National Active and Retired FederalConsolidated Employees and Affiliate December 31,Association 2014 Statement of Activities Comparative Totals as of December 31, and 2012) For the Year Ended December 31,2013 2014 Consolidated Statement of(With Activities For the Year Ended December 31, 2014 (With Comparative Totals for the Years Ended December 31, 2013 and 2012)

(With Comparative Totals for the Years Ended December 31, 2013 and 2012)

Assets

2014 Unrestricted 2014 BoardUnrestrictedTotal Temporarily 2014 Operating DesignatedBoardUnrestrictedTotal Restricted Temporarily Total 2014 Operating Designated Unrestricted Restricted Total

2013 Total 2013 Total

2012 Total 2012 Total

Current Assets Revenues and Support Cash and Cash Equivalents $ 408,649 $ 200,354 $ 609,003 $ 446,322 $ -1,055,325 $ 1,155,293 $ 1,739,659 Membership Dues $ 7,562,070 $ 111,280 $ 7,673,350 $ $ 7,990,435 $ 8,191,872 $ 7,673,350 Short-Term Investments Contributions - Calendar and Cards 2,503,282 2,503,282 2,849,402 2,199,732 2,503,282 Accounts Receivable 115,046 Contributions - PAC - Net - 115,046 - 9,642594,599 124,688 331,139 184,231 808,970 594,599 214,434 Interorganization Receivables - 1,000 1,391 9,284 423 21,117 -30,401 * -53,275 * - * Contributions - Silver Circle and Other 1,391 8,284 37,908 Prepaid Expenses and America’s Deposits 143,922 143,922 5,620 149,542 119,418 121,445 Contributions - Protect Investments 2,897,904 4,638 2,977,473 5,875,377 Heartbeat 4,638 -5,875,377 4,6385,542,09428,107 4,893,090 11,347 Advertising 767,141 767,141 895,704 806,279 767,141 Total Current Assets 3,566,912 127,975 3,177,827 6,744,739 * 7,031,239 * 6,938,425 * Royalties 127,975 462,007 -7,204,932 177,163 161,144 127,975 National Convention Revenue 271,339 271,339 212,335 271,339 Other and Equipment Property 26,227 26,227 91,432 37,766 26,227 Net Assets Released from Restrictions 700,000 461,988 Land - 60,000 700,000521,988 700,000 (521,988) - 700,000 - 700,000 Buildings 4,257,398 4,257,398 4,257,398 4,179,268 4,150,120 Total Revenues and Support 11,732,944 172,280 11,905,224 93,728 12,416,657 12,467,353 11,998,952 Furniture, Equipment, and Software 2,073,888 2,073,888 2,073,888 2,301,393 1,534,877 ExpensesLess Accumulated Program Services Depreciation Communications 1,851,625 1,851,625 1,926,430(2,914,751) 1,877,822 1,851,625(3,250,101) and Amortization (3,234,780) (3,234,780) (3,234,780) Rebates to Federations 747,601 747,601 787,879 794,748 747,601 New Member Rebates to Net Property and Federations and Chapters 83,438 -3,796,50683,4383,930,560 105,720 3,470,246 201,809 Equipment 3,796,506 83,438 3,796,506 Legislative Program 707,568 707,568 783,771 648,114 707,568 Retirement Benefits Program 241,182 241,182 233,180 232,015 241,182 Total Assets $ 7,363,418 $ 3,177,827 $10,541,245 $ 462,007 $11,001,438 * $10,961,799 * $10,408,671 * Public Relations Program 469,110 Pre-Retirement Seminars Program Liabilities and Net Assets National Convention 308,607 308,607 237,726 308,607 Protect America’s Heartbeat 94,364 94,364 244,881 141,561 94,364 Current Liabilities NARFE-PAC 500,871 500,871 394,925 832,625 500,871 Accounts Payable and NARFE Alzheimer’s Fund 21,117 21,117 24,281 28,069 21,117 Accrued Expenses $ 593,714 $ $ 593,714 $ 40,700 $ 634,414 $ 504,794 $ 522,080 Life Membership Fund Interorganization Payables 423 1,391 1,814 - * - * - * Chapter Dues Payable 118,126 118,126 118,126 125,993 118,977 Total Program Services 4,556,373 4,556,373 4,501,067 5,463,599 4,556,373 Deferred Revenue 2,603,486 55,000 2,658,486 2,658,486 2,784,387 2,924,761 Supporting Services Total Current Liabilities General Administration Membership Recruitment Noncurrent Deferred Revenue Membership Services Fundraising Total Liabilities

Total Supporting Services Net Assets Unrestricted Total Expenses Temporarily Restricted Increase (Decrease) in Net Assets Total NetOperations Assets Assets from

Total Liabilities Investment Income (Losses)and Net Assets Increase (Decrease) in Net Assets Net Assets, Beginning of Year Net Assets, End of Year

3,315,749 56,391 3,372,140 40,700 4,402,996 60,556 4,463,552 1,053,072 1,053,072 451,109 792,232412,812 - 863,921792,232 1,242,450 1,242,450 3,766,858 469,203 4,236,061 40,700 7,490,750

60,556

7,551,306

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7,551,306

7,725,566

6,872,296

-6,305,184 12,226,633 5,462,044 12,335,895 12,107,6796,251,554 421,307 326,692 389,545

3,596,560(314,179) 2,708,624 111,724 6,305,184(202,455)421,307 93,7286,726,491 190,024 5,851,589 131,458 (108,727)6,578,246 $ 7,363,418

213,525 42,560 256,085 $ 3,177,827 $10,541,245 $ 462,007

(100,654) 3,697,214 $ 3,596,560

154,284 2,554,340

53,630 6,251,554

$ 2,708,624

$ 6,305,184

See accompanying Notes to Consolidated Financial Statements. See accompanying Notes to Consolidated Financial Statements.

3,596,560 2,708,624 60,556 6,305,184 12,047,123 12,107,679 421,307

* Interorganization receivables and payable eliminated in consolidation.

3,411,026 * 3,415,174 * 3,565,818 * 4,587,675 4,559,005 4,463,552 1,147,325 872,018 1,053,072 - 863,921 762,698 991,264 719,108 792,232 968,379 1,227,868 722,165 1,242,450 4,274,947 * 4,383,553 * 4,557,082 *

- 5 - 6 -

887 536,633 527,998 256,972 $11,001,438 * $10,961,799 * $10,408,671 *

94,615 326,692

148,245 6,578,246

726,657 5,851,589

659,456 5,192,133

421,307

$ 6,726,491

$ 6,578,246

$ 5,851,589

National Active and Retired Federal Employees Association and Affiliate Consolidated Statement of Activities

National Active and Retired Employees Association and Affiliate National Active and Retired Federal Employees Association Affiliate For Federal the Year Ended December 31, 2014 and (With Totals for thethe YearsYear Ended December 2013 and 2012)31, 2014 Consolidated Statement ofComparative Cash Flows For Ended31, December Consolidated Statement of Cash Flows (With Comparative Totals for Years Ended December Forthe the Year Ended December 31, 201431, 2013 and 2012) 2014

(With Comparative Totals for the Years Ended December 31, 2013 and 2012) Unrestricted Board Designated

Operating

Revenues and Support Membership $ 7,562,070 $ 111,280 Cash Flows Dues from Operating Activities Contributions - Calendar and Cards 2,503,282 Increase in Net Assets Contributions - PAC Adjustments to Reconcile in Net Assets Contributions - Silver Circle and Increase Other 8,284 1,000 to Net Cash Provided by Operating Activities Contributions - Protect America’s Heartbeat 4,638 Depreciation and Amortization Advertising 767,141 Net Realized and Unrealized (Gains) Losses Royalties 127,975 on Investments National Convention Revenue 271,339 Other Loss on Disposal of Property and Equipment 26,227 (Increase) in Assets Net Assets ReleasedDecrease from Restrictions 461,988 60,000

Accounts Receivable - Net 11,732,944 Deposits Increase (Decrease) in Liabilities Expenses Accounts Payable and Accrued Expenses Program Services Chapter Dues Payable Communications 1,851,625 Deferred Revenue Rebates to Federations 747,601 Total Revenues Support and Prepaid and Expenses

172,280

Investing Activities

4,556,373

End

4,402,996 1,053,072 of 792,232 Year 1,242,450

Increase (Decrease) in Net Assets Assets from Operations Investment Income (Losses) Increase (Decrease) in Net Assets Net Assets, Beginning of Year Net Assets, End of Year

12,047,123

$ 7,673,350 $ 2,503,282 $ 148,245 $594,599 9,284 21,117 4,638469,545 767,141 127,975 68,880 271,339 26,227 2,998 521,988 (521,988)

89,746

11,905,224(30,124)93,728

$ 7,673,350 2,503,282 726,657 594,599 30,401

30,201

(39,349) 1,877,822 1,926,430 (164,649) 794,748 787,879

(66,419)

83,438 520,309

105,720 438,683 783,771 233,180 (327,169) 641,615 244,881 (282,559) 394,925 24,281 -

(1,104,675)

4,463,552 1,053,072 1,155,293 792,232 1,242,450

7,551,306 $

7,551,306 370

12,107,679

201,809 648,114 232,015 469,110 237,726 141,561 832,625 28,069 -

31,887

4,501,067

(584,366) 1,739,659

4,463,552 1,053,072 $ 1,055,325 792,232 1,242,450

5,463,599

470,570 1,269,089

4,587,675 1,147,325 1,739,659 762,698 1,227,868

4,559,005 872,018 719,108 722,165

$ 7,725,566455 6,872,296 12,226,633

12,335,895

(108,727)

190,024

131,458

(314,179)

111,724

(202,455)

213,525

42,560

256,085

887

256,972

536,633

527,998

154,284 2,554,340

53,630 6,251,554

94,615 326,692

148,245 6,578,246

726,657 5,851,589

659,456 5,192,133

$ 2,708,624

$ 6,305,184

421,307

$ 6,726,491

$ 6,578,246

$ 5,851,589

(100,654) 3,697,214 $ 3,596,560

93,728

11,347 806,279 161,144 212,335 37,766 -

(17,286) 7,016 1,851,625 (163,259) 747,601

4,556,373

12,107,679

28,107 257,694 895,704 177,163 (355,915) 53,134 91,432 -

12,416,657 64,530 12,467,353

60,556

808,970 37,908

(30,203)

707,568 241,182 (1,733,199)308,607 1,424,186 94,364 (795,662) 500,871 21,117 -

230

331,139 53,275

11,998,952 2,027

60,556 -

$ 8,191,872

767,141 127,975 (339,993) 271,339 26,227 -

83,438640,684 707,568 241,182 (647,163) 308,607245,000 94,364 (338,489) 500,871 21,117 -

(99,968) 1,155,293

$ 7,990,435

$ 2,849,402 659,456 2,199,732

4,638 335,350

(740,652)

2012 Total

2012

4,556,373

2013 Total

2013

1,851,625 (7,867) (230,359) 747,601

Supplementary Disclosure of Cash Flow Information Services 7,490,750 60,556 CashTotal PaidSupporting during the Year for Income Taxes Total Expenses

2014

2014 Total

Net Increase (Decrease) in Cash and Cash Equivalents Supporting Services Cash and Cash Equivalents, Beginning of Year General Administration Membership Recruitment Cash and Cash Equivalents, Membership Services Fundraising

Temporarily Restricted

129,620

New Member Rebates to Federations and Chapters 83,438 Net Cash Provided by Operating Activities Legislative Program 707,568 Retirement Benefits Program 241,182 Cash Flows fromProgram Investing Activities Public Relations Purchases of Investments Pre-Retirement Seminars Program National Sales andConvention Maturities of Investments 308,607 Protect America’s Heartbeat Purchases of Property and Equipment 94,364 NARFE-PAC 500,871 NARFE Alzheimer’s Fund 21,117 NetMembership Cash Provided Life Fund by (Used in) Total Program Services

Total Unrestricted

See accompanying Notes to Consolidated Financial Statements.

- 6 See accompanying Notes to Consolidated Financial Statements.

- 7 -

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National Active and Retired Federal Employees Association and Affiliate Notes to Consolidated Financial Statements December 31, 2014 1. ORGANIZATION National Active and Retired Federal Employees Association (the “Association”) was established to advance the general welfare of its members and to aid them in securing their rights under federal retirement laws. Fiftyfour (54) federations, located in the United States, Panama, Puerto Rico, and the Philippines, are affiliated with the Association and conduct local independent programs. Ten percent of all eligible member national dues collected are rebated to these federations to facilitate local association activities. In addition, there are 1,258 chapters affiliated with the Association that are located in the United States and some international locations. The chapters are established by members to increase the scope and effectiveness of the Association. Chapter dues, which are not reported as revenues and expenses of the Association in the accompanying consolidated statement of activities, are established by the chapters and are billed and collected by the Association with the national dues. However, the Association rebates to the chapters one-third of the national fee charged for all new members. The consolidated financial statements include the assets, liabilities, net assets, activities, and cash flows of the Association and its political action committee (NARFE-PAC or Affiliate), which was authorized by the executive board of the Association. All significant interorganization balances and transactions were eliminated in consolidation. The financial information of the 54 federations and the 1,258 chapters is not included in the Association and Affiliate’s consolidated financial statements.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The consolidated financial statements have been prepared on the accrual basis of accounting. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents consist of cash deposits in checking accounts, certificates of deposit with original maturities of less than 90 days, money market accounts, and overnight investment accounts. Investments Investments in debt and equity securities are stated at fair value as determined from published sources. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable consist primarily of amounts due to the Association for advertising in the narfe magazine and royalties. Accounts receivable are reported at their outstanding balances. The Association provides an allowance for doubtful accounts, as needed, for accounts deemed uncollectible. The allowance for doubtful accounts as of December 31, 2014, was $2,000. Management periodically

evaluates the adequacy of the allowance for doubtful accounts by considering the Association’s past receivables loss experience, known and inherent risks in the accounts receivable population, adverse situations that may affect an obligor’s ability to pay, and current economic conditions. The allowance for doubtful accounts is increased by charges to bad debts expense and decreased by charge offs of the accounts receivable balances. Accounts receivable are considered past due when no payments have been received for 30 days. Accounts receivable are charged off based on management’s case-by-case determination that they are uncollectible. Property and Equipment Property and equipment are stated at cost and are depreciated and amortized on the straight-line method over the useful lives of the assets, ranging from 3 to 40 years. The Association capitalizes items of property and equipment costing $1,500 or more. Depreciation and amortization expense for the year ended December 31, 2014, was $469,545. Net Assets The Association and Affiliate classify net assets into two categories, unrestricted and temporarily restricted. All contributions are considered to be available for unrestricted use unless specifically restricted by the donors. Temporarily restricted net assets are contributed with donor-imposed purpose or time restrictions and are to be used for the restricted purposes or time periods as requested by the donors. The Association and Affiliate had no permanently restricted net assets at December 31, 2014. Included in unrestricted net assets as of December 31, 2014, is

$2,000,000 that is designated by the Association’s executive board to pay operating expenses should the Association’s operations be disrupted by an unforeseen event. Also included in board-designated net assets are $508,290 for the life membership fund and $200,335 for the building fund. Membership Dues Annual membership dues are deferred when received and are recognized as revenue over the periods covered by the memberships. Life membership dues are recognized as revenue over the duration of the life membership based on the collective average life expectancy for life members, according to the “United States Life Tables,” 2007, published in the National Vital Statistics Reports, Volume 59, Number 9, September 2011. Contributions The Association and Affiliate report contributions as support when they are received. The Association and Affiliate report contributions as temporarily restricted support if restricted for use for specific programs or time periods. When donor restrictions expire, that is, when purpose or time restrictions are accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and are reported in the consolidated statement of activities as net assets released from restrictions. Royalties Royalties are earned by the Association for granting the use of its name to third parties that market services to Association members. Revenues from these activities are recorded when earned. Rebates to Federations and Chapter Dues and Rebates Rebates to federations and chapter dues payable for renewing members are disbursed to

federations and chapters after their receipt in the Association’s headquarters. Rebates due to the federations on life members are deferred for the duration of the life membership and disbursed to federations monthly, when earned. New member rebates disbursed to federations and chapters were approximately $37,300 and $46,200, respectively. Income Taxes The Association is exempt from federal income taxes under Section 501(c)(5) of the Internal Revenue Code and applicable state law. The accounting standard on accounting for uncertainty in income taxes addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements. Under that guidance, the Association may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities based on the technical merits of the position. Examples of tax positions include the tax-exempt status of the Association and various positions related to the potential sources of unrelated business taxable income (UBTI). The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement. There were no unrecognized tax benefits identified or recorded as liabilities for 2014. The Association’s policy would be to recognize interest and penalties, if any, on tax positions related to its unrecognized tax benefits in income tax expense in the consolidated financial statements. No interest and penalties

were assessed or recorded during 2014. The Association’s Forms 990, Return of Organization Exempt from Income Tax, that have been filed as of December 31, 2014, for the years ended December 31, 2013, 2012, and 2011 are subject to examination by the Internal Revenue Service, generally for three years after they were filed. NARFE-PAC is generally exempt from federal income tax under Section 527 of the Internal Revenue Code. However, interest revenue earned on NARFE-PAC investments is subject to federal and state income taxes. The taxes on that interest for the year ended December 31, 2014, were not significant. As of December 31, 2014, NARFE-PAC’s tax returns filed with the IRS for the years ended December 31, 2013, 2012, and 2011, remain open for examination. Prior Years’ Comparative Totals The consolidated financial statements include certain prior years’ summarized comparative information in total but not by net asset class. Such information does not include sufficient detail to constitute a presentation in conformity with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the Association and Affiliate’s consolidated financial statements for the years ended December 31, 2013 and 2012, from which the summarized information was derived. 3. CONCENTRATION OF CREDIT RISK For purposes of Federal Deposit Insurance Corporation (FDIC) coverage, cash accounts are maintained in several different banks. As of December 31, 2014, bank deposits exceeded the $250,000 FDIC-insured limit by $461,482.

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4. INVESTMENTS AND FAIR VALUE MEASUREMENTS As of December 31, 2014, the Association and Affiliate’s only assets or liabilities measured at fair value on a recurring basis consisted of the following investments:

Financial assets valued using Level 1 inputs are based on unadjusted quoted market prices within active markets. Financial assets valued using Level 2 inputs are based primarily on quoted prices for similar assets in active or inactive markets. Financial assets valued using Level 3 inputs, if any, are valued using unobservable inputs to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. The fair value measurement objective is to determine an exit price from the perspective of a market participant that holds the asset or owes the liability. None of the Association and Affiliate’s financial assets are valued using Level 2 or 3 inputs. Investment income for the year ended December 31, 2014, consisted of the following:

6. RETIREMENT PLAN The Association contributes 2 percent of each eligible employee’s annual compensation to a retirement savings plan and also matches 60 percent of each employee’s voluntary contribution (up to 6 percent of annual compensation). For employees to be eligible, they must have been employed by the Association for at least six months. Total contributions made by the Association were $156,082 for the year ended December 31, 2014. 7. SUBSEQUENT EVENTS The Association and Affiliate have evaluated subsequent events through April 1, 2015, the date on which the consolidated financial statements were available to be issued.

Additional NARFE Financial Data The salaries of the National Executive Board, as of December 31, 2014, are as follows: President: $116,958 Secretary/Treasurer: $104,718

5. TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets are available for the following purposes as of December 31, 2014:

Regional Vice Presidents: $25,536. In 2014, NARFE’s investments were held with these firms:

Net assets were released from donor restrictions by incurring expenses or otherwise satisfying the restricted purposes for the year ended December 31, 2014, as follows:

• Operating Fund: Morgan Stanley and The Vanguard Group • Life Membership Trust Fund: Morgan Stanley • Contingency Fund: Wells Fargo and Morgan Stanley.

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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)

–

Civil Service Annuity Number

–

C S

–

(Include prefix, CSA or CSF) (Include any applicable suffix)

n Mr. n Mrs. n Miss n Ms. Full Name _______________________________________

NARFE MEMBERSHIP INFORMATION

Street Address ___________________________________

NARFE Membership ID ____________________________________

Apt./Unit________________________________________

NARFE Chapter Number____________________________________

City _________________________ State _____ ZIP _____

n YES. I Also Authorize My (NARFE Member) Spouse’s Dues To Be

Phone (__________) ______________________________ Email ___________________________________________ Date of Birth _________ /_________ / ____________________ dd

yyyy

Withheld From My Annuity. (Additional annual dues of $34 plus Chapter dues of record to be withheld annually.) If YES, enter spouse’s information below. Spouse’s Name ___________________________________________ Spouse’s Membership ID ___________________________________

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.

I understand that this authorization shall be valid until NARFE receives and processes my written notice of cancellation in accordance with its agreement with the Office of Personnel Management and that any disputes regarding this authorization shall be a matter between NARFE and myself. I hold the Office of Personnel Management harmless for any erroneous allotment deduction made pursuant to this authorization. ___________________________________________________________________________ _______________________________

Signature of Annuitant or Survivor-Annuitant

Date

Dues payments and gifts or contributions to NARFE are not deductible as charitable contributions for federal income tax purposes. MAIL THIS FORM TO: NARFE, ATTN: Member Records, 606 N. Washington St., Alexandria, VA 22314-1914 www.narfe.org 800-627-3394 rr@narfe.org Do not send money with this form

DW-2 (08/12)

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.

Book online and save on your next vacation stay.

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

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 mention you are a NARFE member and ask for Todd.

Wheaton World Wide Moving 800-248-7960 www.narfe@wvlcorp.com

conduct the following screenings using state-of-the-art ultrasound technology in your neighborhood.

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.

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.

emergency services

narfe merchandise

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!

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? health screening

Life Line Screening 800-324-9906 www.lifelinescreening.com/ NARFE Life Line Screening, America’s leading provider of community-based preventive health screenings, will

GO ONLINE: It’s easy to join online at www.narfe.org. Click “Join NARFE.” TURN TO PAGE 52: 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.

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The Way We Worked

(Laser) Beam me up, scotty In this 1965 photo, NASA scientists test a laser beam used during the Gemini V mission as part of the ground-tospace communications system. Gemini V put astronauts Gordon Cooper and Pete Conrad into earth orbit for eight days. Lasers are still a crucial part of ground-to-satellite and inter-satellite communications, though the lasers are now more powerful and more accurate. The International Space Station also has access to the Internet, allowing astronauts to communicate with NASA using a computer. Photo courtesy of Alex Nieuwsma, National Archives History Office; photo from the Records of the U.S. Senate; 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/. 64

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Did you know? NASA’s Gemini program included 10 piloted space flights in 1965 and 1966. The missions involved two astronauts, hence the name Gemini, meaning twins. Gemini was the bridge between Mercury, the United States’ first human-in-space program, and Apollo, which sent Americans to the moon. Gemini “firsts” included rendezvousing and docking in space and spacewalks.

W E N

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IMPORTANT CONSUMER INFORMATION: Jitterbug is owned by GreatCall, Inc. Your invoices will come from GreatCall. All rate plans and services require the purchase of a Jitterbug phone and a one-time set up fee of $35. Coverage and service is not available everywhere. Other charges and restrictions may apply. Screen images simulated. There are no additional fees to call Jitterbug’s 24-hour U.S. Based Customer Service. However, for calls to an Operator in which a service is completed, minutes will be deducted from your monthly balance equal to the length of the call and any call connected by the Operator, plus an additional 5 minutes. Monthly minutes carry over and are available for 60 days. If you exceed the minute balance on your account, you will be billed at 35¢ for each minute used over the balance. Monthly rate plans do not include government taxes or assessment surcharges. Prices and fees subject to change. 1We will refund the full price of the GreatCall phone and the activation fee (or set-up fee) if it is returned within 30 days of purchase in like-new condition. We will also refund your first monthly service charge if you have less than 30 minutes of usage. If you have more than 30 minutes of usage, a per minute charge of 35 cents will be deducted from your refund for each minute over 30 minutes. You will be charged a $10 restocking fee. The shipping charges are not refundable. Jitterbug and GreatCall are registered trademarks of GreatCall, Inc. Samsung is a registered trademark of Samsung Electronics Co., Ltd. ©2015 Samsung Telecommunications America, LLC. ©2015 GreatCall, Inc. ©2015 firstSTREET for Boomers and Beyond, Inc.

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Our shoe buyer got a little frisky, knowing that next month prices would go up. So he bought plenty, & the rafters are bursting!

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To make room, we are offering this Last Chance Low Price plus FREE Shipping! You still get the full Dr. Scholl’s® treatment: • Tri-Level Comfort® insoles with 3 layers of cushioning • Soft Genuine Leather uppers & smooth manmade trim with breathable mesh details

Copper Brown

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