June 2017 NARFE magazine by NARFE

JUN

’17

P.34

STRESS-BUSTING STRATEGIES

P.53

NARFE FINANCIAL STATEMENTS

COVER STORY

FEDERAL WORKFORCE CUTS P.26

Volume 93 • Number 6

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Call Beltone at 1-866-376-1445 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 *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 change. Blue Cross and Blue Shield Service Benefi t Plan will pay a hearing aid benefi t up to $2,500 every 3 calendar years 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 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 piece alone for complete benefit information. All benefits are subject to the definitions, limitations, and exclusions in your communication piece alone for complete benefi t information. All benefits are subject to the definitions, limitations, and Service Benefit Plan brochure. The Blue365® Discount Program offers access to savings on items that you may purchase exclusions in your Service Benefi t Plan brochure. The Blue365® Discount Program offers access to savings on items that you directly from independent vendors, which may be different from items covered under your Service Benefit Plan or any other may purchase directly from independent vendors, which may be different from items covered under your Service Benefi t Plan applicable federal healthcare program. For hearing aids, acupuncture, chiropractic and vision services, you must exhaust your or any other applicable federal healthcare program. For hearing aids, acupuncture, chiropractic and vision services, you must Service Benefit Plan benefits first. To find out what is covered under your policy, contact the Service Benefit Plan. The products exhaust your Service Benefi t Plan benefi ts first. To find out what is covered under your policy, contact the Service Benefi t and services described herein are neither offered not guaranteed under any local Blue company’s contract with the Medicare Plan. The products and services described herein are neither offered not guaranteed under any local Blue company’s contract program. In addition, these items are not subject to the Medicare appeals process. Any disputes regarding these products with the Medicare program. In addition, these items are not subject to the Medicare appeals process. Any disputes regarding and services are not subject to the Service Benefit Plan’s Disputed Claims process. Blue Cross and Blue Shield Association these products and services are not subject to the Service Benefi t Plan’s Disputed Claims process. Blue Cross and Blue (BCBSA) may receive payments from Blue365 vendors. Neither the Service Benefit Plan, BCBSA, nor any local Blue company Shield Association (BCBSA) may receive payments from Blue365 vendors. Neither the Service Benefi t Plan, BCBSA, nor any recommends, endorses, warrants or guarantees any specific Blue365 vendor or item. The Service Benefit Plan reserves the local Blue company recommends, endorses, warrants or guarantees any specifi c Blue365 vendor or item. The Service Benefi right to change, modify, or terminate any item and vendors made available through Blue365, at any time. Blue Cross and Blue t Plan reserves the right to change, modify, or terminate any item and vendors made available through Blue365, at any time. Shield Association is an association of independent, locally operated Blue Cross and Blue Shield Companies. State and local Blue Cross Shield Available Association is an association of until independent, taxes and/orand feesBlue may apply. at participating locations 12/31/17. locally operated Blue Cross and Blue Shield

Companies. State and local taxes and/or fees may apply. Available at participating locations until 12/31/17.

JU N

’17

WASHINGTON WATCH

Postal Reform Act Advances Despite Opposition

Bill Would Give Wage Grade Workers a Pay Raise

Agencies Prepare for Potential Layoffs

Learn More About Your Legislator

Bill to Give TSP More Flexibility

NARFE Bill Tracker

COLUMNS

COVER STORY

FEDERAL WORKFORCE CUTS. Budget reductions could mean job loss. If you think your position is ripe for a RIF, here’s how to take charge of your career and manage your benefits.

42 Managing Money

From the President

44 The Informed Citizen 46 Alzheimer’s Update DEPARTMENTS

16 Questions & Answers 48 For the Record:

STRESS-BUSTING STRATEGIES. Learn tips to reduce workplace stress and understand benefits available for support.

TSP Returns, Retirement Claims Status, Countdown to COLA

50 NARFE News

On the Web

64 The Way We Worked

VISIT US ONLINE AT:

www.narfe.org

SPECIAL SECTION

53 NARFE 2016 Financial

LIKE US ON FACEBOOK:

NARFE National Headquarters FOLLOW US ON TWITTER:

@narfehq

Statements

ON THE COVER

Illustration by Bill Pragluski, Critical Stages, LLC W W W. N A R F E . O R G

JUN 2017 | Volume 93 | Number 6

EDITOR Susan Boswell EDITORIAL ADMINISTRATOR Toni Vallario 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.

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

REGIONAL VICE PRESIDENTS

REGION I James P. Crawford (Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont) TEL: 603-630-5191 EMAIL: crawfordjim62@gmail.com REGION II Evelyn Kirby (Delaware, District of Columbia, Maryland, New Jersey and Pennsylvania) TEL: 410-604-1141 EMAIL: ekirby@atlanticbb.net REGION III Clarence Robinson (Alabama, Florida, Georgia, Mississippi, South Carolina, Puerto Rico and Virgin Islands) CELL: 404-312-8028 EMAIL: crobin8145@att.net

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: HLZajac125@gmail.com

REGION IV Edward J. Konys (Illinois, Indiana, Michigan, Ohio and Wisconsin) TEL: 937-470-0566 EMAIL: region4vp@gmail.com

REGION IX Richard Wilson (Alaska, Idaho, Montana, Oregon and Washington) TEL: 253-210-5609, CELL: 425-736-6899 EMAIL: narfe1404@comcast.net

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

REGION X William Shackelford (Kentucky, North Carolina, Tennessee, Virginia and West Virginia) TEL: 703-830-6590, CELL: 703-201-6304 EMAIL: wshack1951@aol.com

HERE’S HOW TO CONTACT US…

TO JOIN NARFE, RENEW YOUR MEMBERSHIP OR FIND A LOCAL CHAPTER:

CALL (TOLL-FREE) 800-627-3394 OR GO TO www.narfe.org TO CHANGE YOUR ADDRESS, PHONE NUMBER OR EMAIL LISTING:

CALL (TOLL-FREE) 800-456-8410, EMAIL memberrecords@narfe.org OR GO TO www.narfe.org, log in and click on “Update My Record”

TO REACH A FEDERAL BENEFITS SPECIALIST:

EMAIL fedbenefits@narfe.org NARFE HEADQUARTERS

606 N. Washington St. Alexandria, VA 22314 703-838-7760

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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 $40. 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 © 2017, 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

POSITIVE FINANCIAL REPORT

am very pleased to tell you that in this magazine you will find some very good news beginning on page 53. The results

of the recent independent audit performed by Councilor, Buchanan & Mitchell indicated that for the fifth year in a row, NARFE has added approximately $300,000 to its total net assets in 2016. This total includes all of our funds, both restricted and unrestricted. Restricted funds are those identified for a specific project or purpose, which include the NARFE-PAC fund, funds provided by the Alzheimerâ&#x20AC;&#x2122;s Association to support our Alzheimerâ&#x20AC;&#x2122;s work at the regional and Headquarters level and the building

Sido Named Executive Director NARFE has announced the selection of Barbara Sido, CAE, as Executive Director, effective May 15, 2017. Sido has more than 20 years of experience in all aspects of association management and has served as an executive director four times previously at national state and local organizations. Before transitioning to the association management field, Sido worked in the Employment and Training Administration of the U.S. Department of Labor. Look for an article on Sido in the July issue.

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fund to maintain the NARFE Headquarters. Adding to our net assets for the past five years has not been an easy task at a time when many other well-known associations and business are struggling financially. We have accomplished this by carefully controlling expenses, streamlining operations and eliminating or combining positions. These actions have enabled us to create new positions when needed and add to the professionalism of the NARFE staff. Another very significant contributor to our financial position is the fact that we have reduced annual membership losses to approximately half of what they were in 2014, and we have reduced the number of annual nonrenewals from approximately 35,000 per year to fewer than 26,000 in 2016. We also have significantly increased non-dues revenue through improved fundraising and enhancement of our affinity partner and sponsorship programs. We have raised more than $1 million net dollars in 2016, thanks to NARFE members! Sponsorship and affinity partnership revenue has grown. In addition, we receive approximately $900,000 annually in magazine advertising revenue. This allows NARFE to remain a strong association and supports our efforts to continue to protect your earned benefits.

RICHARD G. THISSEN NARFE NATIONAL PRESIDENT natpres@narfe.org

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Washington Watch

POSTAL REFORM ACT ADVANCES DESPITE NARFE OPPOSITION

n March 16, the House Committee on Oversight and Government Reform approved the Postal Service Reform Act of 2017, H.R. 756, which would force

76,000 current postal retirees to enroll in Medicare Part B or lose their retiree health insurance through the Federal Employees Health Benefits Program (FEHBP). The bill also contains additional reforms aimed at improving Postal Service financing and operations.

NARFE opposes the bill due to the changes it makes to postal retiree health benefits. “There are many solutions to the financial problems facing the U.S. Postal Service, all of which the committee unfortunately has rejected in favor of balancing the books of the USPS on the backs of its retirees,” NARFE President Richard G. Thissen said in a statement to the press. “In so doing, the legislation forces 76,000 current postal retirees who are satisfied with their current health insurance coverage to pay an additional $1,600 per year, or more, through Medicare to keep it,” he continued.

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While the immediate, direct impact of the provision is limited to 76,000 current postal retirees, NARFE has serious concerns about the dangerous precedent it sets for all federal retirees. “The committee is sending all retirees a very dangerous message with ap-

ACTION ALERT!

proval of this bill, that it can – and will – change your retirement benefits after you’ve retired and are living on fixed incomes, without regard to whether or not you can afford it,” Thissen said. The bill was introduced in January by the committee chairman, Rep. Jason Chaffetz, R-UT, along with the cosponsorship of the ranking member, Rep. Elijah E. Cummings, D-MD, and Reps. Mark Meadows, R-NC; Dennis A. Ross, R-FL; Gerald E. Connolly, D-VA; and Stephen F. Lynch, D-MA. Shortly afterward, the committee held a hearing in February to promote the bill, for which NARFE submitted testimony for the record.

JUNE

All members of the federal community should be concerned about the Postal Service Reform Act, H.R. 756. If passed, this bill would set a dangerous precedent of changing retiree health care benefits in retirement. Do your part to protect the earned pay and benefits of the federal community by sending a message of opposition to your representative using NARFE’s Legislative Action Center! Visit www.narfe.org/legislation/votervoice.cfm.

Despite NARFE’s opposition, the committee approved the bill by a voice vote at its March 16 markup. While several committee members expressed a desire to modify the mandatory Medicare provisions of the bill to provide a limited hardship exemption, previous proposals to do this have been narrowly crafted, relied on Postal Service approval and have not yet been incorporated into the bill. While the majority of federal and postal retirees choose Medicare when they turn age 65, those without it actively made the decision not to enroll. “Their reasons for doing so are numerous and personal, and it was their choice,” Thissen noted. “That choice should not be eliminated now

“The committee is sending all retirees a very dangerous message with approval of this bill, that it can – and will – change your retirement benefits after you’ve retired.” — Richard G. Thissen because Congress is unwilling to make more politically difficult decisions.” NARFE has proposed a simple alternative: allow those 76,000

bill would provide pay raise for wage grade employees

he Wage Grade Employee Parity Act, H.R. 1594, would provide wage grade, or hourly, federal employees the same increase in their basic pay rate as provided to General Service (GS), or salaried, federal employees within the same locality. The bill was introduced on March 17 by Rep. Matt Cartwright, D-PA, who introduced similar legislation in the last two sessions of Congress, with both bills gaining bipartisan support. Language from the previous version of the Wage Grade Employee

Parity Act was incorporated in the 2016 spending bill that was signed into law. That language ensured that federal employees paid hourly received the same 2016 pay increase as GS employees. This policy was then extended by the continuing resolution authorizing fiscal year 2017 spending through April 28. Under current law, if Congress does not specify any federal employee pay increase in its appropriations bills, the president still has the authority to provide pay raises for GS employees. However, the president is not given

retirees, who automatically would be enrolled in Medicare, a small window of opportunity to opt out. Without this option, the bill breaks an unwritten promise regarding retiree health benefits and replaces postal retirees’ choice of health insurance with a paternalistic requirement, at significant cost to the Medicare program. NARFE, as an organization representing postal retirees and as a customer of the Postal Service, is committed to supporting legislation that provides much-needed reforms to USPS for long-term financial stability. However, NARFE is opposed to any “reform” that fixes postal finances on the backs of retired postal employees. —JOHN HATTON, DEPUTY LEGISLATIVE DIRECTOR

that same authority with regard to wage grade employees, whose pay rate increases rely on explicit authorization from Congress. This bill would tie any wage grade pay increase to the GS pay increase authorized by the president. As of press time, the recently introduced bill has three cosponsors and has been referred to the House Committee on Oversight and Government Reform. NARFE supports this bill and also will track any language taken from the bill that may be incorporated in any bill authorizing spending for the remainder of the 2017 fiscal year, or the 2018 fiscal year. —ROSS APTER, LEGISLATIVE STAFF ASSISTANT W W W. N A R F E . O R G

Washington Watch

AGENCIES PREPARE FOR POTENTIAL LAYOFFS IN WAKE OF BUDGET PROPOSAL

resident Trump’s fiscal year 2018 “skinny budget” delivered to Capitol Hill on March 16 offered few specifics on line-item program cuts and even fewer details on their effects on federal staffing. It has quickly become clear, however, that there will be a significant impact on federal employees. If Congress adopts Trump’s plan to increase defense and national security spending by $54 billion, offset by an equivalent cut in nondefense discretionary programs (i.e., those federal programs, projects and activities funded through the annual appropriations process), federal employees at agencies with offices in all 50 states will be affected. For years, federal employees have traded duty to country for compensation that lags behind that of their private-sector counterparts. Merit principles and the stable delivery of necessary government services, coupled with a pride in performing public service, motivated careers with the federal government. That basic premise has been challenged by current events. For the world beyond the federal civil service, recent budget plans issued by the Trump administration received ample press for the prospect of cuts in programs such as Meals on Wheels for seniors and the proposed elimination of the National Endowment for the Arts and the Humanities, in favor of augmented spending on the Department of Defense. To help drive home the point of changing priorities, and for more immediate impact, President Trump also submitted a request for fiscal year 2017 supplemen-

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tal appropriations to prime the pump for increases in defense and national security spending. To pay for the request, the White House proposed roughly $18 billion in cuts in programs just for five months, from April 28 through the end of the fiscal year on September 30, 2017. With a continuing resolution (CR) in place to fund federal activities through April 28, Congress must act to continue funding, whether reprioritized or not, or face the prospect of a government shutdown when the CR expires. While some would argue that federal employees “have been through it all before,” that may not be the case. Recent modern experience, with the 2013 federal government shutdown for 16 days and the advent of sequestrationinduced furloughs, provides no adequate roadmap to managing the human resources upheaval engendered by the level of agency cutbacks, program eliminations and shifting governmental authorities encompassed in the proposed Trump budget plan. That is why the White House, through the Office of Personnel Management (OPM), issued two

publications to guide agencies on the procedures for implementing administrative furloughs and more. “Guidance for Administrative Furloughs” provides questions and answers for agency personnel offices and employees. The “Workforce Reshaping Operations Handbook” deals with agency reorganization. In issuing the operations handbook, OPM stated that its purpose was “to provide assistance to agencies that are considering and/or undergoing some type of reshaping (e.g., reorganization, management-directed reassignments, furlough, transfer of function or reductions-in-force or RIFs).” The handbook provides agencies with guidance, options and specific operational procedures designed to ensure that reshaping efforts comply with merit

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

system laws and regulations. Taken together, the two reports are designed to help agencies prepare for employee layoffs and compulsory unpaid leaves. Layoffs are likely if President Trump’s proposed cuts in domestic discretionary spending are approved. It’s worth noting that many on Capitol Hill have stated the president’s budget is “dead on arrival,” but there is considerable time between now and the start of fiscal year 2018. As used in civil service parlance, a RIF is a government layoff and arguably the most drastic response to government reorganization and budget shortfalls. RIFs can be

disruptive, expensive and complicated both for the agencies faced with them and for the federal civil servants affected. The OPM handbook offers a variety of personnel responses as a means to avoid a RIF. The publication includes chapters on management rights and human resource responsibilities and provides explicit guidance on the implementation of a RIF. Among the options available to agency managers: detailing employees to other agencies, freezes on hiring and promotions, retraining staff, voluntary changes to a lower grade, voluntary reduction of hours including conversion to part-time, and furloughs.

Former House Budget and Appropriations Committees Counsel David Reich, appearing at the NARFE Legislative Training Conference in March, told attendees that while he was not sold on Congress’ embracing President Trump’s budget proposals, he did predict that if enacted as proposed, domestic agencies would undoubtedly require immediate furloughs, with the potential for worse. The president’s full budget for FY 2018 is not expected until late May, and whether Congress accedes to the president’s requests will be determined in the months ahead. —ALAN LOPATIN, LEGISLATIVE COUNSEL

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Only members of the National Active and Retired Federal Employees Association may contribute to NARFE-PAC. NARFE will neither favor nor disadvantage anyone based on the amount of a contribution or the failure to make a voluntary contribution to this political action fund. NARFE-PAC contributions are not deductible for federal income tax purposes.

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Washington Watch

LEARN MORE ABOUT YOUR LEGISLATOR WITH NARFE’S NEW TOOL

ARFE’s Legislative Action Center features a new, easy-to-use search tool that provides you with information about your elected officials. Whether you are preparing for a congressional meeting, reading up on your senator before he or she attends a federation event, or would just like to learn more about your legislator’s background before you customize an action letter, the Action Center is the go-to place for everything you need to know! To find this information on the Action Center webpage, scroll down to “Find Officials” and type your ZIP code in the box provided. You then will be prompted to enter your street address. Doing so will ensure that the next page correctly lists the legislators rep-

resenting your state and congressional district. Information about state officials also is available. Your federal officials will be listed first, including the president and vice president as well as your two senators and representative. To find out more information about the legislator, simply click on his or her name. First, you’ll find contact information for district and Washington, DC, offices as well as the member’s official website and social media links. Scroll down to “Political Information” to find a list of committees that your legislator serves on in the 115th Congress as well as the date he or she assumed office. Doing your homework before you attend a meeting or send a letter via the Action Center shows

BILL TO GIVE TSP FLEXIBLE WITHDRAWAL OPTIONS

ens. Rob Portman, R-OH, and Thomas R. Carper, D-DE, introduced the TSP Modernization Act of 2017, S. 873, which would provide more flexible withdrawal options for Thrift Savings Plan (TSP) participants. Limited withdrawal options are one of the leading reasons federal workers and retirees transfer their money out of the TSP, which provides sound investment options at a low cost. Specifically, the bill would allow multiple, partial post-separation withdrawals that partici-

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pants can time to their individual needs. Currently, federal employees who have separated from the federal workforce are allowed only two post-separation withdrawals (in the form of a lump sum payment, a stream of monthly payments or annuity payments). For federal employees who are still working and are older than age 59½, the bill would allow multiple, age-based withdrawals. Current rules allow only one (Continued on p. 13)

that you respect your legislator’s role in Congress and are committed to effectively advocating for the federal community. We hope that you find this new function of the Action Center a helpful tool as you continue to fight to protect your earned pay and benefits. For any questions regarding the Action Center, please contact the Legislative Department at leg@narfe.org. —MOLLY CHECKSFIELD, GRASSROOTS PROGRAM MANAGER

MYTH vs. REALITY MYTH: Mandating that U.S. Postal Service (USPS) retirees sign up for Medicare in order to keep their federal health insurance is the only way to save the USPS from a taxpayer bailout. REALITY: Multiple options are available to improve USPS finances. First, the burdensome prefunding requirement could be eliminated, which currently requires USPS to pay more than $5 billion annually for future retiree health benefits. Second, postage rates could cover the full cost of postal operations. Forcing current postal retirees to enroll in Medicare to “save” USPS ignores these options, shifts costs to taxpayers, and most egregiously, adds an additional financial burden to retirees on fixed incomes.

NARFE’s

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Features: • Members of Congress by state delegation, with color photos, biographical data and congressional district maps. • Members’ contact information, including addresses, phone and fax numbers, website addresses, social media contacts, district offices and key staffers. • Complete listings of committees, subcommittees and leadership. • Contact information for the White House, Cabinet, Supreme Court and federal agencies. Be a stronger activist with NARFE’s Congressional Directory at your fingertips

Order your copy of the new CONGRESSIONAL DIRECTORY today! Name___________________________________________________________________ Address _________________________________________________________________ City _________________________________________ State ______ ZIP____________ Member ID# (as it appears on narfe magazine label) _____________________________

o Check (payable to NARFE) or cash enclosed o Charge my credit card o MasterCard o VISA

o Discover o AMEX

Card # __________________________________________________________________ Exp. Date

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Name on card (print) ______________________________________________________ Signature ____________________________________________ Date _____________

Quantity ________________ $20 each (includes shipping and handling) VA sales tax _____________ VA residents add 6% tax ($1.20) per book Total cost _______________ Mail to: NARFE Congressional Directory 606 N. Washington Street Alexandria, VA 22314-1914

Please allow 2-3 weeks for delivery. Call NARFE’s Legislative Department at 703-838-7760 to order by phone.

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

WHAT BILL WOULD DO

H.R. 756: Postal Service Reform Act of 2017 / Rep. Jason Chaffetz, R-UT

Requires postal retirees to enroll in Medicare in order to continue receiving their current federal health insurance coverage. Enrollment would be automatic.

Cosponsors: 7 (D), 6 (R)

LATEST ACTION(S) Referred to the House Committee on Oversight and Government Reform and two other committees See story, p. 6

H.Res. 15: As a resolution, it will not be sent to the president and, therefore, cannot become law/ Rep. Sam Graves, R-MO Cosponsors: 131 (D), 43 (R) POSTAL REFORM H.Res. 31: As a resolution, it will not be sent to the president and, therefore, cannot become law / Rep. Dave McKinley, R-WV

Expresses the sense of the House that the U.S. Postal Service should take all appropriate measures to ensure the continuation of six-day delivery.

Referred to the House Committee on Oversight and Government Reform

Expresses the sense of the House that the Postal Service should take all measures to restore service standards in effect on July 1, 2012.

Referred to the House Committee on Oversight and Government Reform

Cosponsors: 124 (D), 32 (R)

H.Res. 28: As a resolution, it will not be sent to the president and, therefore, cannot become law / Rep. Susan Davis, D-CA

Expresses the sense of the House that the U.S. Postal Service should take all measures to ensure the continuation of door-to-door delivery for all businesses and residential Cosponsors: 170 (D), 48 (R) customers.

Referred to the House Committee on Oversight and Government Reform

H.R. 757: The FederaltAdjustment of Income Rates (FAIR) Act / Rep. Gerald E. Connolly, D-VA

Referred to the House Committee on Oversight and Government Reform

Provides for a 2 percent pay raise for federal employees and 1.2 percent increase in locality pay in 2018.

Cosponsors: 62 (D), 1 (R)

FEDERAL COMPENSATION

S. 255: The Federal Adjustment of Income Rates (FAIR) Act / Sen. Brian Schatz, D-HI

Referred to the Senate Committe on Homeland Security and Governmental Affairs

Cosponsors: 7 (D), 0 (R)

narfe, April 2017

H.R. 1594: Wage Grade Employee Parity Act/ Rep. Matt Cartwright, D-PA Cosponsors: 2 (D), 1 (R)

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Gives the president the authority to provide wage grade, or hourly, employees a pay raise.

See story, p. 7 NARFEâ&#x20AC;&#x2122;s Position:

2 0 17

Referred to the House Committee on Oversight and Government Reform

Support

Oppose

No position

EDITOR’S NOTE: These bills are all listed online at www.narfe.org/ legislation/votervoice.cfm.

BILL NUMBER / NAME / SPONSOR

ISSUE

TAXES

CAMPAIGN FINANCE

H.R. 396: Tax Accountability Act of 2017 / Rep. Jason Chaffetz, R-UT Cosponsors: 0 H.R. 20: The Government By the People Act of 2017 / Rep. John Sarbanes, D-MD Cosponsors: 154 (D), 1 (R)

GPO/WEP

H.R. 1205: Social Security Fairness Act of 2017 / Rep. Rodney Davis (R-IL) Cosponsors: 74 (D), 23 (R)

COLA

WHAT BILL WOULD DO

LATEST ACTION(S)

Mandates that no individual with an unpaid tax liability can be eligible for federal employment. Requires agencies to review employee’s tax liability.

Referred to the House Committee on Oversight and Government Reform

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

Referred to three House committees

Repeals both the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP).

Referred to the House Committee on Ways and Means

H.R. 1251: CPI-E Act of 2017 Requires Social Security and / Rep. John Garamendi (D- many federal retirement programs to use the Consumer CA) Price Index for the Elderly (CPIE) to calculate cost-of-living adCosponsors: 32 (D), 1 (R) justments in retirement benefits.

narfe, April 2017

narfe, May 2017 Referred to the House Committees on Ways and Means, Veterans’ Affairs, Oversight and Government Reform, and Armed Services narfe, May 2017

FEDERAL RETIREMENT

S. 873: TSP Modernization Act of 2017 / Sen. Rob Portman, R-OH Cosponsors: 1 (D), 0 (R)

(Continued from p. 10) age-based withdrawal for active federal employees. The bill also would add flexibility to the TSP by allowing the election of quarterly or annual payments and permitting periodic withdrawals to be changed at any point during the year. Payments could be stopped while allowing the account balance to remain in the TSP. Currently, periodic payments can be selected only in monthly intervals, can be adjusted only once per year and cannot be stopped unless the

Updates age-based and postseparation withdrawal options, creates new withdrawal intervals, grants flexibility in payment amounts and eliminates the TSP withdrawal election deadline.

Limited withdrawal options are one of the leading reasons for transferring money out of the TSP. participant withdraws the entire remaining balance. Finally, the bill would eliminate the withdrawal election deadline. Currently, participants are required to make a post-separation withdrawal election by April 1 of the year following the year in which

Referred to the Senate Committee on Homeland Security and Governmental Affairs See story, p. 10

they turn age 70½ and are separated from federal service. This requirement too often is conflated with the requirement to begin taking required minimum distributions the same day, which leads to withdrawals of the full TSP balance. The Employee Thrift Advisory Council, of which NARFE is a member, supports the improvements in withdrawal flexibility. NARFE members should use the Legislative Action Center to write their senators and ask them to support S. 873. —ROSS APTER, LEGISLATIVE STAFF ASSISTANT W W W. N A R F E . O R G

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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 RETIREMENT BENEFITS FOR REINSTATEMENT UNDER CSRS OFFSET

I am a reinstated civil servant and have a question related to retirement benefits. I was a Civil Service Retirement System (CSRS) employee from 1972-1996, when my position was eliminated through a reduction-inforce due to a base realignment and closure in 1996. At that point, I took my employee contributions out of CSRS. I then worked as contractor from 1996 through September 2016. I was reinstated in September 2016 under the CSRS Offset. Do I need to redeposit my original retirement contributions? Is the agency match for the portion I originally contributed still there? If I don’t pay that money back into the retirement system, how does that affect the amount of my retirement? I would appreciate any help you can give me.

As a CSRS Offset employee, your future annuity will be computed as a straight CSRS annuity,

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but then adjusted to reduce the “offset” time, which is credited to your Social Security benefit at age 62, or when you retire, whichever is later. You took a refund of your CSRS retirement contributions for your federal service that ended after March 1996. If you do not pay a redeposit of the refunded contributions plus interest, you will not receive credit for that service in the computation of any annuity to which you may be entitled in the future. The process

for making the redeposit starts by going to your agency personnel office and requesting a form SF 2803, “Application to Make Deposit or Redeposit.” Complete the employee portion of the form and return it to your personnel office, which will complete its part of the form. The form will then be sent to the Office of Personnel Management (OPM), which will send you a statement of the amount of the redeposit including interest. You can then send payment to OPM, or at least $50, by check, credit card or bank account authorization.

CARRYING FEHBP INTO RETIREMENT

I am age 65 and plan to keep working until I’m 70. I signed up for Medicare Part A because it was free but see no reason to drop my Blue Cross Blue Shield (BCBS) stan-

dard option for Medicare Part B or the other parts. Will I be able to remain covered by BCBS when I retire or will I be forced into Medicare?

Yes, you will be able to remain covered by BCBS so long as you have been continuously enrolled in a Federal Employees Health Benefits Program (FEHBP) plan (e.g., BCBS) for the five years of service immediately preceding retirement. Upon retirement, you will have eight months to sign up for Medicare Part B without penalty. Under current law, you are not required to enroll in Part B. Postal retirees may be forced to enroll if pending legislation passes Congress. Regardless, many retirees enrolled in a fee-for-service plan choose to enroll in Part B and continue their FEHBP coverage (e.g., through BCBS), in which case the FEHBP plan often covers all co-payments and deductibles required by Medicare Parts A and B.

RETIREES CREDIT FOR MILITARY ACTIVE DUTY SERVICE

I am a Civil Service Retirement System (CSRS) retiree. My annuity computation included two years of active duty in the Army. However, it did not include two years of service in the Army Reserve

(during which I had one meeting a week) and two years in inactive Reserve (with no meetings) and three weeks active duty for training. Should any of this service have been included in my annuity computation?

Service in any of the reserve corps of the armed forces is creditable service for retirement purposes when an individual is called to active duty and for the active duty period only. The weekly or biweekly training sessions are reserve duty — you were not called to active duty — and are not creditable for CSRS purposes. The annual two- or three-week required training, during which you received pay and allowance, is considered active duty and is creditable service for annuity computation purposes. One thing to note, if you were a federal civilian employee and you performed active military service with a reserve component during a period you were on military leave or furlough from your civilian position, the period is credited as civilian service.

WHEN TO SIGN UP FOR MEDICARE

My wife will turn age 65 before I do, but I carry the Federal Employees Health Benefits Program (FEHBP) insurance as a retired federal employee. Do we have to sign up for Medicare when she turns 65, or wait the six months until I turn 65?

Both of you should sign up for Medicare Part A (in-hospital coverage) when each of you reaches age 65. There is no premium for enrollment in Part A. Part B (medical, physician coverage) is voluntary and requires a monthly premium. If either of you decides to enroll in Part B, there is an initial enrollment period during the seven-month period that begins three months before the month your wife turns age 65, the month she turns age 65 and 3 months after the month she turns age 65. This initial enrollment period also applies to you when you near age 65. If you or your wife don’t sign up during your initial enrollment period, either of you may sign up during the annual general enrollment period from January 1-March 31. However, there is a late enrollment penalty under Part B that charges you an additional 10 percent of the premium for each of the 12 months you were not enrolled but could have been enrolled.

CANCELLING FEGLI WITH NO REDUCTION

At retirement, I opted for no reduction of Basic Federal Employees’ Group Life Insurance (FEGLI). I am 75 years old and find that the premium cost is too high and not affordable. Can I cancel my FEGLI life insurance with no reduction?

Yes, you can cancel your no reduction FEGLI life insurance. There is no W W W. N A R F E . O R G

Questions & Answers

form; the cancellation must be in writing and have an original signature by the insured retiree. Be sure to include your Civil Service Annuity (CSA) retirement claim number and specify what action you want taken. Send the letter to OPM’s Retirement Office at: Office of Personnel Management, Retirement Operations Center, P. O. Box 45, Boyers, PA 160170045. Please note that coverage cannot be reinstated after cancellation.

ERROR IN F-100 BOOKLET

I have noticed a possible error in the NARFE publication F-100, “Be

Prepared for Life’s Events.” The sample notification letter gives the Office of Personnel Management (OPM) Boyers, PA, address as P.O. Box 45, Boyers PA 160174500. Should the ZIP code be 16017-0045?

You are absolutely correct. Our mistake. Thank you for catching the error. The publication can be accessed on the NARFE website by signing in as a member on NARFE’s website homepage, and then on the left side under “Resource Library,” click on “Be Prepared.” If you still have trouble, let us know and we will mail you a hard copy.

DEPOSIT TRANSACTIONS IN CHECKING ACCOUNT

On my checking account statement when the Social Security and the annuity are directly deposited are the words: “SSA TREAS” and “OPM TREAS.” What is the meaning of the different words? Also, who pays the government’s share of my monthly Blue Cross Blue Shield premium?

We don’t have a copy of your checking account statement but can say with some certainty that “SSA TREAS” indicates a payment made by the U.S. Treasury Department of benefits from the Social Security

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Administration, and that “OPM TREAS” indicates a U.S. Treasury Department payment by the U.S. Office of Personnel Management. As you know, the federal government pays about 70 percent of the total health insurance premium charged by Federal Employees Health Benefits Program (FEHBP) plans, and the rest is paid by the enrollees. The government’s share is drawn from the Federal Employees Health Benefits Fund, a central depository of all premium money.

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The FERS annuity and FERS Annuity Supplement COLAs are not provided until age 62, except for disability, survivor benefits, and other special provision retirements.

MEDICARE AND DELAYED SOCIAL SECURITY

At what age should I apply for my Medicare coverage if I am going to wait until my full retirement age to apply for Social Security?

If you decide to delay your Social Security benefits until after age 65, you should still apply for Medicare benefits within three months of your 65th birthday. If you wait longer, your Medicare insurance (Part B) and prescription drug coverage (Part D) may cost you more money.

FEGLI FOR FUNERAL EXPENSES

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Questions & Answers

through. What do I need to do to cash in my federal life insurance?

Your FEGLI policy is term insurance and has no cash value unless you die. Then the proceeds are payable to whomever you designate.

SURVIVOR ANNUITY BENEFITS FOR SPOUSE

I have elected a survivor annuity benefit for my wife after my retirement. If my wife dies, will survivor benefits still be withheld from my annuity?

Should your spouse predecease you, notify the Office of Personnel Man-

agement (OPM) in writing and provide a copy of your spouse’s death certificate. OPM will then adjust your annuity to the full life rate, ending the reduction.

COURT APPEAL OF WEP

I am appealing the Social Security Administration’s (SSA) denial of my request for a waiver from the Windfall Elimination Provision (WEP), which reduced my Social Security benefits. My appeal is based on my belief that my time in the United States Army Reserve while working as a federal civilian constitutes the same dual status as the U.S. Court of Appeals for the 8th Circuit defined it in Peter-

son v. Astrue. Does NARFE have any means for legal counsel to help me?

NARFE does not provide attorneys for members, nor do we have a list of attorneys you could contact. As you know, on Feb. 3, 2011, the 8th U.S. Circuit Court of Appeals ruled against the SSA, which had denied a former Air National Guard Technician a waiver from the WEP offset. The court ruled in this particular case that the civilian work of an Air National Guard Technician was “service as a member of the uniformed services” and by law the WEP did not apply to him. The narrow ruling to waive

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the WEP offset applied only to the National Guard Technicians who resided in states covered by the 8th Circuit. In light of SSA not expanding the court’s narrow ruling, it appears that another court case will be needed to resolve your contention.

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benefit be postponed until my full retirement age at 66 and 4 months? What do I need to do?

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Cover Story

By David Tobenkin

L A R E D FE E C R O F K R WO

S T U

Budget reductions could mean job loss. Here’s how to take charge of your career. CHANGE IS ON THE HORIZON FOR FEDERAL EMPLOYEES WITH THE SPECTER OF LAYOFFS — OR REDUCTIONS-IN-FORCE (RIFs) — most certainly on the way, reflecting major revisions to a variety of agencies. For federal employees who think they may be in the RIF firing line, the time to prepare is now, not later, as RIFs likely will force some federal employees to make dramatic changes in career, compensation and benefits planning. The Trump administration in March announced its fiscal year 2018 preliminary budget plan, which proposed budget reductions for all but three federal

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Illustration by Bill Pragluski, Critical Stages, LLC

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agencies. Congress, which actually approves the budget, already has pushed back on many of those proposed cutbacks. However, in the Republican-dominated Congress, which generally backs a smaller federal government, it is likely that there will be support for federal agency budget cuts of a magnitude that will make some level of RIFs unavoidable, according to Bill Valdez, president of the Senior Executives Association, the association of federal senior executives. “I think that there will be some RIFs – that is inevitable,” says Valdez, who noted that earlier in his career he had been part of a 1995 RIF at the Department of Energy where his own position in a technology transfer office was eliminated. “The president has proposed a wide range of cuts to agencies, including some agency abolishments. He won’t get all of it, but he will get some of it, and when that occurs, RIFs will have to happen.” Federal agencies previously have used a wide variety of workforce management steps to avoid RIFs, such as hiring freezes, cuts to non-personnel components of budgets, buyouts, furloughs and general attrition to help reduce the workforce or manage budgetary shortfalls. Due to the fact that the cuts would take effect at the start of the new fiscal year

PROPOSED

on October 1, 2017, these steps will be insufficient to generate enough savings to avert RIFs at some agencies, says Jeffrey Neal, a senior vice president at consulting firm ICF and a former Department of Homeland Security chief human capital officer. “Any agency looking at a 10 percent or more cut in their labor budget will have difficulty doing that in one year without a RIF,” Neal says. “There is not enough turnover.” The Trump administration’s preliminary budget includes cuts that exceeded the 10 percent level for 11 agencies, which are listed in the graphic below. That budget also proposed eliminating all funding for some smaller independent agencies, such as the National Endowment for the Arts and the Chemical Safety Board, among others. A key question is whether agencies will be able to implement any budget reductions authorized by Congress as they see fit, the standard approach in the past, which could allow agencies to make other cuts to save jobs, or whether agencies will be directed to realize budget savings through cuts to jobs. Valdez notes that the latter is possible “since the president’s stated intention is to reduce the size of the workforce.” Many experts emphasize that the most important effort the federal workforce com-

TO LARGE FEDERAL AGENCIES ENVIRONMENTAL PROTECTION AGENCY

-31%

STATE DEPARTMENT

-28% -21%

AGRICULTURE DEPARTMENT

-21%

LABOR DEPARTMENT DEPARTMENT OF HEALTH AND HUMAN SERVICES

-18% -16%

ARMY CORPS OF ENGINEERS COMMERCE DEPARTMENT

-16% -13%

EDUCATION DEPARTMENT

-13%

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

-13%

TRANSPORTATION DEPARTMENT

-12%

INTERIOR DEPARTMENT

Source: Fiscal Year 2018 Preliminary Budget Plan (www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/2018_blueprint.pdf)

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munity and its advocates can make toward limiting the potential scope of RIFs is to vigorously speak to their legislators and the public about the value of services provided by federal agencies and the impact of federal employment on local economies. NARFE, federal employee unions and many other organizations already are engaged in advocacy on behalf of the federal workforce. “While we have faced challenges in the past, the stars have never quite lined up in the way they do this year with a new president and a new Congress,” says NARFE National President Richard G. Thissen. “Our success during this congressional session will depend on how much you get involved.”

ABCs OF RIFs

Most federal agencies use federal RIF regulations (5 Code of Federal Regulations, Part 351) before separating or demoting an employee due to agency reorganization, a lack of work or a funding shortage. When an agency must abolish positions, the RIF regulations determine whether an employee keeps his or her present position or has a right to a different position. For most federal civil service employees, the order of staff reductions is governed by four factors, listed in descending order of importance: tenure category (e.g., career over career conditional over non-permanent positions), veteran’s status, length of federal service and job performance ratings. There is a link between the final two categories, as the service computation date is adjusted by performance ratings, with credit for the last three annual ratings that are not more than four years old upon dissemination of the RIF notices. However, the fiscal year 2016 National Defense Authorization Act implemented new rules for the Department of Defense that do not apply to other civilian federal agencies. Under the DOD system, a RIF is based primarily on performance, “as determined under any applicable performance management system,” generally running from 5 (outstanding) to 1 (unacceptable). The rating of record comes first, then tenure group, average performance rating and veteran preference. Neal says for employees who are relatively new and/or whose performance is rated as out-

“Any agency looking at a 10 percent or more cut in their labor budget will have difficulty doing that in one year without a RIF.”

—Jeffrey Neal

standing, or employees with veteran preference and a less than outstanding rating, the new DOD RIF rules could dramatically alter their chances of being affected by a RIF. One aspect of the RIF selection factors that employees might be able to affect is performance evaluations, notes John P. Mahoney, a Washington, DC-based federal government employment lawyer who has represented federal employees in adverse action proceedings and the federal government in defending against RIF appeals. “Federal employees should follow up with a complaint if they think their performance appraisal is not what it should be,” Mahoney says. Mahoney also says that federal employees should make sure that their position descriptions, performance records and electronic Official Personnel Folder at their agencies are up-to-date and indicate the correct position, title, grade, rating history, preference status and service computation date. This may prevent being improperly reached through a RIF due to an erroneous administrative record that, for example, understates seniority status or misstates tenure category. Importantly, selection for a RIF is not the end of the story. Under the federal rules, agencies are required to hold a “Second Round RIF Competition” for competitive service positions, applying the four retention factors to determine whether a released employee has a “bump” or “retreat” right to a position in a different competitive level that is held by an employee with even lower retention standing. While often less desirable than maintaining the current position, this can keep an employee in the federal workforce and, importantly for many, continue eligibility to participate W W W. N A R F E . O R G

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in federal benefits programs such as the Federal Employees Health Benefits Program (FEHBP). The Second Round may be held at an agency’s discretion for excepted service positions, says the Office of Personnel Management (OPM). An agency must give employees reached by a RIF at least 60 days’ written notice before the effective date of the RIF action. Eligible employees reached by a RIF can receive severance payments, though those not eligible notably include those who decline a reasonable offer of reassignment, who are dismissed for unacceptable performance or conduct, or who are eligible for retirement. According to OPM, the basic severance pay allowance consists of: • One week of pay at the rate of basic pay for the position held by the employee at the time of separation for each full year of creditable service through 10 years. • Two weeks of pay at the rate of basic pay for the position held by the employee at the time of separation for each full year of creditable service beyond 10 years. • Twenty-five percent of the otherwise applicable amount for each full three months of creditable service beyond the final full year. The basic severance pay allowance is augmented by an age-adjusted allowance consisting of 2.5 percent of the basic severance pay allowance for each full three months of age over 40 years. Unemployment benefits also will often be available to those affected by a RIF, although these benefits are usually relatively small and unlikely to cover ordinary income, says Wan McCormick, a certified financial planner at the Fairfax, Virginia-based Reliable Alliance Financial. There is a good chance that agencies will offer buyouts or early outs to at least some employees likely to be reached by a subsequent RIF. Voluntary Separation Incentive Payments (VSIPs), also known as buyout authorities, offer employees a lump sum incentive payment of up to $25,000 ($40,000 for DOD employees) to voluntarily leave government service. Voluntary Early Retirement Authorities (VERAs), also known as early outs, offer eligible employ-

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ees the opportunity to begin receiving retirement annuity payments earlier than they would otherwise be eligible. VSIPs and VERAs are often offered together. The August 2014 narfe magazine article, “Buyouts and Early Outs,” pp. 20-26, described the rules governing VERAs and VSIPs and considerations in deciding whether to accept them.

STAYING PLUGGED IN

It is critical that employees who are or may be affected by RIFs thoroughly and carefully monitor, quickly review and keep any communications or documents sent by their agencies’ human resource departments, OPM and benefits providers, such as the Thrift Savings Plan (TSP). These documents could announce key deadlines for employee actions that, if not acted on, could forfeit employee rights. It is also important that those potentially affected by a RIF stay tuned in to developments at the agency through all possible sources, including NARFE, federal employee unions, newspapers, trade magazines and websites. Federal employees should determine if they are under a bargaining unit represented by a federal union. Even if they are not union members, they may benefit from a union-negotiated agreement with a federal agency that may have helpful provisions guiding or steering the implementation of a RIF, although unions generally cannot stop RIFs. “Unions can’t control or stop a reduction-in-force, but we can address procedures and appropriate arrangements that govern some aspects of a RIF, such as the amount of notice and VERAs and VSIPs,” says David Cann, director of field services and education at the American Federation of Government Employees (AFGE) federal employee union.

TAKING CHARGE OF CAREERS

Federal employees who believe that they may be reached by RIFs may for the first time need to think and live as cautiously as private-sector employees in at-will employment. As a rule of thumb, employees should save three to six months of living expenses in case of job loss. “They should keep in mind that finding a new position, particularly one with benefits, may take longer than expected,” McCormick says. According to Department of Labor statistics, it

NARFE MAGAZINE CAREER RESOURCES Past issues of narfe magazine are available online in PDF format to members at www.narfe.org/narfemagazine by locating the “Magazine Archives.” The following articles highlight relevant topics for those considering career transitions: • Second Careers (June 2014) examined second careers for federal employees, including the 10 most popular careers reported by magazine readers. • Moonlighting (November 2013) provided guidance on part-time moonlighting in a new potential career, while taking care to adhere to applicable government employee ethics rules. • Alumni Associations Connect the Federal Family (April 2017) discussed federal agency alumni associations. These associations cost only a small fee to join, but may provide valuable news regarding employment opportunities through alumni.

took an average of 25 weeks, or roughly a half year, to find a new job in February 2017. Those who believe they may be affected by a RIF should begin considering potential new employment options immediately. See the sidebar above for a list of narfe magazine articles that may be helpful to those considering a career transition. Those likely to be affected by a RIF may wish to look at transfer and hiring opportunities within their agency and in other agencies. Within their agency, a move to a division or location less likely to be affected by RIFs could be a smart move, though Neal noted this often can be difficult to determine. Employees may wish to examine similar jobs at agencies where, based on the president’s preliminary budget, the budget may actually increase, such as the Department of Defense, the Department of Homeland Security and the Department of Veterans Affairs. Federal employee status could give federal employees a competitive edge in hiring for some positions.

CONSEQUENCES FOR BENEFITS

Employees eyeing potential retirement before being reached by RIFs should keep in mind that if they are actually affected by RIFs, they will qualify for reduced standards for eligibility for a Federal Employees Retirement System (FERS) or Civil Service Retirement System (CSRS) annuity. A federal employee who is involuntarily separated is eligible for a discontinued service

annuity if the following conditions are met: The employee is 50 years old with 20 years of service, or any age with 25 years of service under FERS; and any age with 25 years of service under CSRS. In addition, federal employees nearing retirement may want to use as little annual leave as possible, since this can count toward satisfying their time in service requirement, notes Mark Keen, a certified financial planner and partner at Fairfax, Virginia-based Keen & Pocock, as well as a longstanding contributor to narfe magazine. Those who recently received a large pay increase might wish to consider staying in their positions as long as possible, as the increase could affect their high-three calculation for purposes of FERS and CSRS annuities, Keen adds. Some classes of employees eligible for FERS and CSRS annuities can credit unused sick leave toward total service lengths in annuity calculations. Liquidity is a key consideration for those potentially affected by RIFs. Employees should determine how much cash and investments can be accessed without triggering large penalties, unlike the Thrift Savings Plan (TSP), where hardship withdrawals are taxable for many. Those who believe they may be at risk for a RIF may wish to reduce TSP contributions to the level necessary to obtain a matching contribution from the government, or even lower if they are truly cash deficient, and set that money W W W. N A R F E . O R G

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aside in a savings account or similarly liquid financial product, says Micah Shilanski, an Anchorage, AKbased certified financial planner and founder of federal retirement website plan-your-federal-retirement.com. Cutting expenses and reducing mortgage payments, if possible, are other ways to bulk up liquid savings in a hurry. With respect to TSP balances, the best advice for many federal employees under age 55 will be to avoid touching such accounts if at all possible due to the low cost of these funds, and the immediate taxation and potential early withdrawal penalties that will occur in most cases, Shilanski notes. For TSP withdrawal payments before a plan participant reaches age 59½, in addition to the regular income tax, the participant may have to pay an early withdrawal penalty tax equal to 10 percent of any taxable portion of the payment that is not transferred or rolled over. However, if an employee separates from service during or after the year they reach age 55 (or the year they reach age 50 if they are a public safety employee), then the 10 percent early withdrawal penalty tax does not apply. These penalties also do not apply to certain annuity payment plans, or equivalents, that participants can elect. McCormick says it is also important to note that federal employees affected by a RIF who have a TSP loan with an outstanding balance will have 90 days to pay the full balance back or face the income tax and, potentially, the 10 percent early withdrawal penalty on the outstanding balance. In addition, there are clear consequences for certain benefits for separating employees, notably health insurance. Separation from federal service will end eligibility to participate in the FEHBP unless one is eligible to retire and carry FEHBP coverage into retirement. A temporary health care benefit continuation option, Temporary Continuation of Coverage, is available for federal employees for an 18-month period, and is the equivalent of COBRA for private-sector employees. Similar to COBRA, it is an expensive option, as those participating will have to pay both their own contribution and that of the federal

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government, plus a 2 percent premium. The prospect of rising health care costs for employees forced to separate could lead them to schedule medical procedures while they are still employed to take advantage of their existing coverage. Separated employees and their families also will lose access to the federal dental and vision plan under the Federal Employees Dental and Vision Insurance Program. Participation in the Federal Long Term Care Insurance Program is not affected by separation, if payments continue to be timely, but those separated and not retired cannot purchase a plan. Those with Flexible Spending Accounts for Federal Employees (FSAFEDS) should use them before they leave because coverage terminates when they separate.

FIGHTING A RIF

Employees seeking to fight a RIF likely will have an uphill battle. Appeals of RIF decisions can be taken to the Merit Systems Protection Board (MSPB) for employees not represented by a union, or through a union grievance or an MSPB appeal for those who are union-represented, AFGE’s Cann notes. “RIFs are very difficult to overcome,” says Ed Passman, a principal at the law firm Passman & Kaplan P.C. “Agencies can effectively gerrymander the competitive area and select the competitive level to try to get rid of whom they would like.” Employees can allege discrimination, which also may be handled through the Equal Employment Opportunity process but would eventually come before the MSPB for a hearing. Mahoney notes, however, that it is quite possible that agencies unfamiliar with RIF processes will make mistakes in carrying them out and will be willing to settle with federal employees with strong cases. Ultimately, the prospect of RIFs depends heavily on whether President Trump’s budget and his proposals are enacted, but his intention to reshape the federal government is clear, and one matter is certain: A new day has dawned for federal employees, and managing change will be the standard at most federal agencies. —DAVID TOBENKIN IS A JOURNALIST BASED IN THE WASHINGTON, DC, AREA.

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S S E STR

STR THIS IS A STRESSFUL TIME FOR THOSE WHO WORK FOR THE UNITED

STATES GOVERNMENT. The bad news keeps coming: Many federal agencies face reductions-in-force (RIFs) or significant budget cuts that will require agencies to reorganize or reshape their workforce. The missions of several departments are changing or may soon change, and earned rights and benefits for federal workers may soon come under attack by a budget-minded Congress and White House.

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Adapting to change in the federal workplace.

B U ST

ING

R ATEGIES

All of this is causing many civil servants to feel overwhelmed or pushed to their limits, which the American Psychological Association has defined as one of the principal characteristics of stress. But what is stress? What are its consequences? And how can you minimize the effects of stress? “Stress doesn’t have a really specific definition,” explains Antonette Zeiss, Ph.D., a licensed clinical psychologist and retired federal employee. “It’s a combination of a life situation that usually brings negative change into one’s life, and, at the same time, experiencing a tremendous amount of emotion and difficulty in finding ways to cope with that situation.” “People will have something happening to them because of others’ decisions that they don’t feel they have much power or ability to affect,” Zeiss continues. “Those decisions will create everyday difficulties, both about the changes that will be happening and about the lack of power people have in the situation.” Robert R. Putnam witnessed the effects of stress on federal workers firsthand when he worked for the Selective Service System at the time the military draft ended and the agency was transitioning into “standby” status in the late 1970s. The Selective Service transition was among the largest single downsizing of any government agency ever undertaken, as approximately 90 percent of its workforce was eliminated during the transition. RIF notices were provided in waves, every four to six weeks. “Of course, overall morale suffered,” Putnam recalls. “There were widely different reactions. A few folks appeared openly depressed. Some carried on with humor —

By Everett A. Chasen W W W. N A R F E . O R G

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at least outwardly. Most employees just accepted the situation with a quiet sadness, resigned to the inevitability and the need to move on.” A great deal of work time was wasted, as people sat around expressing agitation, discussing their fears and engaging in speculation. Some employees forged closer friendships during the period, as a result of what Putnam called their “foxhole mentality.” Others isolated themselves from their co-workers as they waited to see who would stay or go. Putnam himself was not RIFed because he was a disabled veteran doing work related to the agency’s transition. He did, however, move to another agency after a few months.

REDUCING STRESS

After witnessing the ordeal, Putnam offers suggestions for those who may face a similar stressful situation. “Try to obtain and understand the official sequence of RIF procedures, instead of listening to the suppositions of fearful or disgruntled colleagues,” he says. “Refine your resume, SF-171 and other documents, and apply for other positions to give yourself some options. Keep a “Meanwhile, concentrate on doing the best job you can, for positive attitude, as long as you can,” Putnam and be determined says. “Keep a positive attitude, and be determined to make to make the best the best of whatever happens.” Dana L. Moore, Ph.D., a of whatever licensed clinical psychologist happens. who recently retired from the Department of Veterans Affairs after 41 years of federal service, offered additional advice. “If people are feeling stressed, particularly about work, they need to focus on something they have more control over,” she explains. “They can consider whether they should be saving or earning more money, or how they might get an additional job, or additional training for another career, that might offer them an alternative to what they are currently doing.” 36

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There are many things, Moore explains, that cause anxiety in people’s lives they can’t do anything about. For federal workers, decisions made by elected officials are among them. Therefore, Moore says, employees’ energies should be focused on things they can impact. “Rather than letting anxiety about things you can’t control eat you up, spend that energy focused on things you can do. Then try to put the stuff you can’t control somewhere else in your brain. “Instead of burning your energy up on anxiety, use it to get prepared for what’s next as best as you can,” she says.

DEVELOPING PROBLEM-SOLVING SKILLS

Zeiss, who was chief consultant for mental health for the VA before her retirement, suggests there are both “universal and personal things” employees can do to cope with stress. Relationships, she explains, are “hugely important. People who are well-connected to others and have close relationships can turn to their friends in times of stress. They also support their friends with their issues as well as being supported, creating a kind of interrelational closeness that’s really important in dealing with stress.” Good problem-solving skills, Zeiss believes, are another important component of managing stress. Some people, she says, may benefit from a form of psychotherapy called problem-solving therapy (PST). The goal of this treatment is to enhance people’s ability to cope with stressful life experiences. Clinicians specializing in PST believe many psychological issues are the consequences of a failure to resolve stressful life problems. Being able to successfully deal with such problems reduces immediate emotional distress and

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prevents long-term psychological problems from occurring. PST is shown to be effective among a wide range of people for many different psychological issues and symptoms. It can be conducted successfully in a group format, on an individual or couples basis, as part of a larger treatment strategy, over the phone, or even through the internet. VA uses PST successfully to help veterans deal with post-traumatic stress disorder and other issues. Those receiving PST are taught to avoid impulsive, hurried and incomplete attempts to solve problems. They also are taught not to avoid issues, procrastinate or depend on others for solutions. Instead, they learn ways to solve problems themselves in a way that usually leads to success. Zeiss explains these methods: “Learn how to step back from a problem, lay out the problem areas, consider what resources would be needed for each of the options you have identified, and make thoughtful, careful decisions about what actions to take and how to judge whether or not you are effectively solving the problem. “It’s a very don’t-use-your-gut approach,” she says.

RELAXING AND GETTING SLEEP

More individualized strategies for dealing with stress, says Zeiss, include taking care of yourself and relaxing sufficiently. “Different people find different ways to relax,” she says. “I use hiking, gardening and going to the opera. In general, pleasant events and keeping positive things in your life as you define what’s important is crucial.” Good sleep manage-

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ment is absolutely fundamental as well, Zeiss says. Insomnia is a common problem for people with stress, and involves trouble falling asleep, staying asleep or getting quality sleep. “Talk with your primary care provider about whether sleep medications could be helpful to you,” she says, “but be aware there are also behavioral strategies that can be extremely helpful.” One intervention is Cognitive Behavioral Therapy for Insomnia (CBT-I), Zeiss says. CBT-I aims to improve sleep habits and behaviors by identifying and changing thoughts and behaviors that affect individuals’ ability to sleep or to sleep well. Patients with insomnia first evaluate their sleep patterns by keeping a sleep diary or journal for a few weeks to help clinicians identify thought, behavior and stress patterns that could be contributing to the problem. Once the causes of insomnia, and the factors contributing to it, are identified, a treatment plan is developed to help patients get better sleep. Treatment strategies can include telling people to go to bed only when they are tired; avoiding activities in bed such as watching TV, reading or using electronic media; getting out of bed at the same time every morning; and getting up and moving to another room when they cannot fall asleep within 10 minutes. Other strategies for improved sleep include avoiding caffeine, nicotine and alcohol within a few hours of going to bed; having a light bedtime snack; and engaging in relaxing activities such as reading, writing, listening to calm music, and taking a bath before bedtime. Some people may benefit from hypnosis or meditation to help them sleep, or from therapy to control anxiety.

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STRATEGIES

SUPPORT FOR FEDERAL EMPLOYEES

Therapies like PST and CBT-I require the services of a professional. Federal employees, retirees, and their family members with severe stress problems can access mental health services through their Federal Employees Health Benefits Program (FEHBP) plan. FEHBP insurance carriers cover inpatient and outpatient mental health care. The Office of Personnel Management (OPM) has an Employee Assistance Program (EAP) with trained counselors available to all federal employees 24 hours a day, seven days a week, to help with individual, family or workplace problems. Counselors can be reached at 800-222-0364. Stress management support is among the services EAPs provide. According to OPM, each federal executive branch agency has an EAP and at least one EAP administrator to oversee the program. Some agencies have EAP counselors available onsite, while others can offer referrals for employees. Many agencies publicize EAP services to employees. EAP counselors can help employees explore options which include counseling, coaching, training and educational materials; working with an expert to identify healthy lifestyle changes; and identifying information or community resources that may offer relief. Information about an employee’s discussion with EAP personnel are confidential and cannot be disclosed without employee permission, according to OPM. Regulations require confidentiality and prohibit disclosure of negative information, except as required by law. These exceptions include instances of child or elder abuse and neglect, or serious threats to commit a crime or harm oneself or others or cause property damage, which must 40

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be reported to law enforcement personnel. There is no cost to employees who receive counseling and other services provided by their agency’s EAP. Costs for outside treatment and professional services may be covered by employees’ FEHBP plans or by private insurance.

FINAL THOUGHTS

“Dealing with stress is something I thought about all the time as a supervisor and a federal leader,” Zeiss says. “There are so many messages in the media about ‘good enough for government work,’ or ‘draining the swamp.’” She suggests that finding a way to speak up and have the opportunity to be heard on issues such as the importance of sustaining government functions is important to avoid “becoming caught up in anger and frustration.” Identifying constructive and positive ways to have a voice, such as joining an organization like NARFE and participating in grassroots advocacy, is another part of the process of dealing with stress. “I tried to go around to my staff at the end of the day,” she concludes, “because everybody was staying late and working their hearts out, and were thinking about what they hadn’t gotten done. I would talk to them about what they did that day that really made a difference to veterans, and it was helpful.” In discussing their day, “employees remembered why they were there, and what they were doing. I think it’s going to be really important in the days ahead for federal employees to not get overwhelmed by a barrage of negative messages in the media, or from other sources, but to really take the time to help each other think about the excellence and importance of the work they do.” —EVERETT A. (EV) CHASEN IS A WRITER AND A COMMUNICATIONS CONSULTANT IN THE WASHINGTON, DC, AREA. HE RETIRED FROM THE FEDERAL GOVERNMENT IN 2009 AFTER 35 YEARS OF SERVICE.

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Managing Money

WHICH IS BETTER – A TRADITIONAL OR ROTH IRA?

he advent of the Roth Thrift Savings Plan (TSP) provides federal employees with the choice to save in a tax-deferred retirement plan, such as

the traditional TSP, or in a Roth account. Of course, the additional choice naturally leads to the question, which one is better? The major difference between the two may be boiled down to paying tax now, or paying tax later. Contributions to the traditional TSP are made with pretax money, while contributions to the Roth TSP are made with post-tax money. On the other hand, you must pay tax on traditional TSP distributions, but qualified Roth TSP distributions will be tax-free. Despite the differences, what’s interesting is that there is no economic difference between the two, assuming the tax environment is the same at the time withdrawals are taken as it was when the money was contributed. The tax environment not only includes your tax rate, but also what I refer to as stealth taxes – any additional taxes or expenses you may incur due to earning higher amounts of income. For example, the amount of Social Security benefits you must pay tax on, Medicare Part B premiums and capital gains tax rate, to name a few. To illustrate the economic parity, we’ll compare a

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pretax $10,000 contribution to the traditional TSP with an equivalent after-tax contribution to the Roth TSP. Assuming the TSP participant is in the 25 percent tax bracket, the equivalent after-tax Roth TSP contribution will be $7,500. At this point, it may appear the traditional TSP account is worth more. But after factoring in the 25 percent tax the participant would pay when the traditional funds are distributed, they are worth the same. Now, let’s compare the future after-tax value of each account assuming a future tax rate of 25 percent and a return of 7.2 percent (I use this return for no other reason than the fact that an investment will double in value every 10 years). After 10 years, the traditional TSP grows to $20,000 and the Roth TSP grows to $15,000. The traditional TSP’s after-tax value, however, is $15,000 – the same after-tax value as the Roth TSP. Of course, we’re assuming a constant tax environment, which oftentimes is not reality.

BY MARK A. KEEN

CFP®

It’s possible the TSP participant’s tax rate declines after retirement, in which case, the traditional TSP will be the better choice. For example, changing the future tax rate in the comparison to 15 percent, the after-tax value of the traditional TSP will be $17,000 — $2,000 more than the Roth TSP. On the other hand, the Roth account will prove better if you end up in a higher tax rate in the future. This may not be unrealistic, as many retirees have fewer deductions from items, such as mortgage interest and retirement plan contributions, to reduce income. Large distributions from the traditional TSP also may push you into a higher tax rate. Furthermore, surviving spouses may find themselves in a higher tax bracket as a single taxpayer versus a married taxpayer. Finally, it’s always possible the government will raise tax rates in the future. Even if the tax rate doesn’t change, a Roth account may still prove the better option. For example, in most cases you must begin taking required minimum distributions (RMDs) from a tax-deferred retirement plan, such as a traditional IRA or the traditional TSP, in the year you turn 70½. Not only will you owe tax on the distribution, but you’ll also

BENEFITS RESOURCES NARFE offers members a wide range of information on federal benefits. Visit www. narfe.org/federalbenefits and www.narfe.org/ FederalBenefitsInstitute.

owe additional taxes on any future earnings the money generates. One of the benefits of Roth accounts is there is no RMD requirement. Your money may stay in the account and grow tax-free for as long as you live. It’s important to point out that although Roth IRAs are not subject to RMDs, the Roth TSP is. This means you’ll need to do some fina-

gling with the Roth TSP account to maximize the benefits. I’ll touch on this quirk and show how you can get the full benefit from a Roth TSP next month. Choosing between the traditional and Roth TSP is not an all-or-nothing decision. In fact, the best strategy may be to utilize both by contributing just enough to the traditional TSP to put yourself in a lower tax bracket, and then redirecting your remaining retirement savings to the Roth TSP. Stay tuned next month for ways to ensure you are maximizing the benefits of the Roth TSP. 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.

NARFE NATIONAL LIFE MEMBERSHIP APPLICATION National Life Membership offers a hedge against future dues increases and affirms a member’s ongoing support of NARFE’s mission to serve federal employees and retirees. National dues are paid for life; applicable chapter dues are billed annually.

CONTACT INFORMATION o Mr. o Mrs. o Miss o Ms. Full Name _____________________________________________ Street Address _________________________________________ Apt./Unit ______________________________________________ City _______________________ State _____ ZIP _____________ Phone (__________) ____________________________________ Email ________________________________________________ Date of Birth _____ /_____ /_________ dd

yyyy

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

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

I am a (check all that apply)

o Active Federal Employee o Active Federal Employee Spouse

o Annuitant o Annuitant Spouse o Survivor Annuitant

Life Membership Fee Schedule Ages 30-39 40-50 51-55 56-60 61-65 66-70 71-75 76-80 81-90 91-100+

Single or Quarterly Payment Installments $1,796 $450.25 1,408 353.25 1,127 283.00 960 241.25 801 201.50 653 164.50 514 129.75 392 99.25 251 64.00 127 33.00

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

yyyy

Name on Card _____________________________________ Signature ________________________ Date ___________ MAIL THIS APPLICATION TO NARFE Member Records 606 N. Washington St. / Alexandria, VA 22314-1914 W W W. N A R F E . O R G

The Informed Citizen

KNOW YOUR GOVERNOR

overnors are the subject of Alan Rosenthal’s 2012 book, The Best Job in Politics, which explored how governors succeed as policy leaders. Rosenthal’s research focused on the period from 1980-2010. As in 2010 when Rosenthal observed no shortage of candidates even in hard economic times, 2018 should yield a bumper crop of gubernatorial candidates.

State revenues are growing slowly and unevenly in most states. Three of the four most recent two-term presidents were governors. While sitting and former governors fared poorly in the 2016 Republican presidential primaries, the fact that the two most recent two-term Republican presidents – Ronald Reagan and George Bush – had served as governor still holds allure to would-be governors. Web Gems

C-SPAN’s video library: www.c-span.org National Association of State Budget Officers: summaries of governors’ State of the State addresses – bit.ly/2pdnZke NARFE’s Federal Family: includes state-based fact sheets – bit.ly/2pRwkqa Sabato’s Crystal Ball: covers the 20172018 gubernatorial elections – bit.ly/2pdk0nW Center on the American Governor: governors.rutgers.edu National Governors Association: governor bios and websites – www.nga.org 44

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From left, Sharon Reese, NM Federation state legislative chair, and her husband John Reese with NM Governor Susana Martinez.

Starting Point for State Advocates Although intense partisanship and gridlock in Congress also has impacted state government, governors remain the principal agenda-setters and most important politicians in their states. Governors’ annual State of the State addresses are the best starting point for citizens motivated to learn about state government. Archived video and summaries are available from C-SPAN and the National Association of State Budget Officers (see the “Web Gems”). Electing Governors Two states, New Jersey and

BY CHRISTOPHER FARRELL SENIOR ANALYST

Virginia, will conduct gubernatorial elections this year. 2018 will feature 36 gubernatorial elections with many open seats due to term limits and voluntary retirements. Federations, harnessing the size of the federal family in their state, should reach out to governors’ offices. Invite your governor to speak at the federation convention. Like federations in Maryland and Virginia, join in coalition with organizations representing retirees. Interview candidates or potential candidates for governor. Start early, well before the primary election, when there may be a large field of candidates who are eager to please. Work with other groups, such as the League of Women Voters, to promote candidate debates. Legislative Action Center Iowa, California, Maine and North Carolina federations have begun to utilize the NARFE Legislative Action Center to connect members with their elected officials – state legislators and state executive officers as well as federal officials. Our Iowa, Maine and North Carolina federations are supporting tax legislation. California members are contacting legislators and the governor to request legislative updates. Other federations are planning to launch advocacy campaigns, and NARFE staff are eager to assist.

CoNTRol whAT you CAN. INsuRE whAT you CAN’T.

The road of life will always have its twists and turns, but you can still plan on the straight and narrow.

The high cost of a hospital stay and the expense of home recovery afterward, because of an unexpected injury or illness, can exhaust your personal and retirement savings and put a major detour in your future plans. The NARFE Hospital Income and Short Term Recovery Insurance Plan helps you protect the savings you’ve worked so hard for. This plan allows you take control of the wheel by paying you, or anyone you choose, cash benefits to use as you see fit to help control your health care choices, maintain self reliance, and receive the level of care you deserve.

• In-Hospital cash benefits paid to you starting the first day you’re Hospitalized for a covered Injury or Illness. • At-Home cash benefits paid to you as soon as Medicare approves post-Hospital home recovery treatments your doctor recommends. • Cash benefits paid in addition to any other coverage you may have, and you can use the money however you choose. • Coverage cannot be canceled because of your health or your age. • Economical group rates specifically negotiated by NARFE for our members.

NARFE Hospital Income and Short Term Recovery Insurance Plan: Available to NARFE Members and spouses age 65 and older with guaranteed acceptance.* To learn more or enroll in the NARFE Hospital Income and Short Term Recovery Insurance Plan, Call 1-800-233-5764 or visit us at www.narfeinsurance.com Request Number 078502-1-1-1

*This policy is guaranteed acceptance, but it does contain a Pre-Existing Conditions Limitation. All benefits are subject to the terms and conditions of the policy. Policies underwritten by Hartford Life and Accident Insurance Company detail exclusions, limitations, reduction of benefits and terms under which the policies may be continued in full or discontinued. Plans may vary by state. The Hartford® is The Hartford Financial Services Group, Inc., and its subsidiaries, including issuing company Hartford Life and Accident Insurance Company. Hospital Income Plan Form Series includes SRP-1151, or state equivalent.

Program Administered by Mercer Health & Benefits Administration LLC

Alzheimer’s Update

ALZHEIMER’S AND HEREDITY: IS IT PREDICTABLE?

here are three things that we cannot change: our age, our parents and our genes. The older you get, the more likely you are to develop Alzheimer’s. Most individu-

als with the disease are 65 and older. One in nine people in this age group, and nearly one-third of people age 85 and older, have Alzheimer’s. Half of those who reach 90 years of age are likely to get Alzheimer’s.

Another strong risk factor is family history. Those who have a parent, brother or sister with Alzheimer’s are more likely to develop the disease. The risk increases if more than one family member has the illness. When diseases tend to run in families, either genetics or environmental factors, or both, may play a role. An ongoing study in Colombia, South America, is following one of the largest known group of people with early-onset Alzheimer’s. Scientists have traced the cause to a single genetic mutation passed from generation to generation. About 5,000 people in the group are known to carry the mutation. Their symptoms usually develop in the mid-40s. This study will test individuals who carry the mutation when their memory is intact and they can still think clearly. Although the genes that cause “familial Alzheimer’s” are rare, this discovery has provided important clues that help our understanding of Alzheimer’s. These genes affect processing or production of beta-amyloid, 46

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the protein fragment that is the main component of plaques. Beta-amyloid is a prime suspect in decline and death of brain cells. Several drugs now in development target beta-amyloid as a potential strategy to stop Alzheimer’s disease or significantly slow its progression. The Alzheimer’s Association states that a genetic mutation is an abnormal change in the sequence of chemical pairs that make up genes. These mutations involve the gene for the amyloid precursor protein and the genes for the presenilin 1 and presenilin 2 proteins. Inheriting any of these three genetic mutations guarantees that an individual will develop Alzheimer’s disease. In such individuals, disease symptoms tend to develop before age 65, sometimes as early as age 30. Most individuals with Alzheimer’s have late-onset disease, occurring at age 65 or later. Scientists have identified several other risk genes connected to Alzheimer’s disease. The risk gene with the strongest influence is called apolipoprotein E-e4

BY MERV STUCKEY NARFE-ALZHEIMER’S CHAIR

(APOE-e4). Scientists estimate that APOE-e4 may be a factor in 20 to 25 percent of Alzheimer’s cases. A blood test can identify whether you have the APOE-e4 gene. However, this doesn’t mean that you will develop Alzheimer’s disease. Genetic testing will not predict who will get the disease because there are so many other factors, e.g., your lifestyle. The risk of developing Alzheimer’s or vascular dementia appears to be increased by many conditions that damage the heart and blood vessels. These include heart disease, diabetes, stroke, high blood pressure and high cholesterol. Work with your doctor to monitor your heart health. One promising line of research suggests that strategies for overall healthy aging may help keep the brain healthy and may even reduce the risk of developing Alzheimer’s. These measures include eating a healthy diet, staying socially active, avoiding tobacco and excess alcohol, and exercising the body and mind. Is Alzheimer’s disease predictable? If your family has a history of the disease, you are more likely to get it but that is not a given. If you are concerned, talk to your doctor. MERV STUCKEY IS CHAIR OF THE NARFEALZHEIMER’S NATIONAL COMMITTEE. EMAIL: NARFEROADRUNNER@COMCAST.NET. THIS COLUMN APPEARS QUARTERLY.

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. Advantages • Save 15% off your annual NARFE 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!

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: (NARFE dues ÷ 12) + (Chapter dues - if applicable ÷ 12) = Total Monthly Deduction How do I sign up? 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 YES. I want to enroll in NARFE’s Dues Withholding Program (Annual NARFE dues of $34 and, if applicable, Chapter dues of record to be withheld annually.) Social Security Number (9-digit number)

– Mr.

Mrs.

Civil Service Annuity Number

– Miss

C S

Ms.

–

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

Full Name ______________________________________

NARFE MEMBERSHIP INFORMATION

Street Address __________________________________

NARFE Membership ID ____________________________________

Apt./Unit _______________________________________

NARFE Chapter # (If applicable) _______________________________

City _________________________ State _____ ZIP _____ Phone (__________) ______________________________ Email __________________________________________ Date of Birth _________ /_________ / ____________________ dd

yyyy

YES. I Also Authorize My (NARFE Member) Spouse’s Dues To Be Withheld From My Annuity. (Additional annual dues of $34 and, if applicable, chapter dues 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 made above, 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 made above: 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 (11/16)

2017

G FUND

F FUND

C FUND

S FUND

I FUND

APRIL

0.20%

0.81%

1.03%

1.15%

2.62%

MARCH

0.20%

-0.01%

0.12%

-0.08%

2.85%

FEBRUARY

0.18%

0.71%

3.97%

2.45%

1.44%

YTD

0.78%

1.75%

7.16%

5.78%

10.16%

1 YEAR

1.98%

1.12%

17.95%

21.83%

12.91%

3 YEAR*

2.06%

3.08%

10.54%

8.74%

1.20%

5 YEAR*

1.95%

2.66%

13.73%

13.20%

7.13%

10 YEAR*

2.55%

4.56%

7.21%

8.05%

1.22%

L INCOME

L 2020

L 2030

L 2040

L 2050

APRIL

0.50%

0.76%

1.07%

1.21%

1.34%

MARCH

0.33%

0.48%

0.64%

0.71%

0.78%

FEBRUARY

0.77%

1.36%

1.96%

2.25%

2.51%

YTD

2.24%

3.69%

5.24%

6.00%

6.69%

1 YEAR

4.89%

8.23%

11.41%

13.07%

14.65%

3 YEAR*

3.40%

4.62%

5.73%

6.28%

6.67%

5 YEAR*

4.08%

6.97%

8.56%

9.56%

10.44%

10 YEAR*

3.71%

4.53%

5.16%

5.41%

N/A

2017

*ANNUALIZED

RETURNS are net of the effect of accrued administrative expenses and investment expenses/costs. Source: TSP (For additional monthly returns, go to www.tsp.gov.) 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: (Lifecycle) 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.)

OPM RETIREMENT CLAIMS PROCESSING STATUS

2016

2017

For the Record

APRIL BRINGS TSP REBOUND AFTER MARCH DOLDRUMS

THRIFT SAVINGS PLAN FUND RETURNS

Claims Received

Inventory Avg # of Days (Steady State % Processed in to Process Case in is 13,000) 60 Days or Less (FYTD) More Than 60 Days

MARCH 5,741 19,211 APRIL 7,241 14,517 MAY 7,210 14,035 JUNE 5,929 13,529 JULY 9,238 15,562 AUGUST 6,818 16,334 SEPTEMBER 6,946 15,146 OCTOBER 7,326 16,677 NOVEMBER 5,065 16,019 DECEMBER 5,483 15,097 JANUARY 15,317 23,087 FEBRUARY 9,114 23,916 MARCH 7,216 20,530

82% 80% 80% 79% 79% 78% 77% 58% 60% 56% 51% 56% 61%

118 92 103 115 110 112 100 91 94 95 89 104 105

FOR THE NUMBER of new retirement cases the Office of Personnel Management (OPM) receives each month by agency and the percent with errors that it returns to those agencies, go to www.opm.gov/retirement-services/. Source: OPM 48

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The C and S Fund’s returns were bolstered by better first-quarter corporate earnings reports. This occurred despite the fact that the month began with the release of a disappointing payrolls report and ended with a lower than expected first-quarter gross domestic product estimate. The I Fund did well, aided both by good international returns and weakness in the U.S. dollar. Falling interest rates, due to reduced future economic expectations, contributed to the F Fund’s strong results for the month. —BY SEAN MCCAFFREY, DEPUTY CHIEF INVESTMENT OFFICER, THRIFT SAVINGS PLAN

COUNTDOWN TO COLA

he Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 0.08 percent in March 2017. To calculate the 2018 cost-of-living adjustment (COLA), the indices of July, August and September 2017 will be averaged and compared with the 2016 third-quarter average of 235.057. The percentage increase, if any, determines the COLA. March’s index, 237.656, is up 1.11 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 0.96 percent higher than the December 2016 base index of 235.390.

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

CPI-W

Monthly % Change

% Change from 235.057

OCTOBER 2016

235.732

+0.10

+0.29

NOVEMBER

235.215

-0.20

+0.06

DECEMBER

235.390

+0.07

+0.14

JANUARY 2017

236.854

+0.62

+0.76

FEBRUARY

237.477

+0.26

+1.03

MARCH

237.656

+0.08

+1.11

APRIL MAY JUNE JULY AUGUST SEPTEMBER

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NARFE News

DATES TO REMEMBER!

AWARD-WINNING SERVICE OFFICERS

ene Wiggins was named NARFE’s 2017 National Service Officer of the Year. Wiggins was primary service officer last year for Alvin G. Bohley Chapter 1019 in the Illinois Federation. He now serves as the chapter’s alternate service officer after stepping down at the end of 2016. During more than 15 years as a service officer, Wiggins won multiple state and regional awards and earned a reputation as an indispensible leader in the service center, said Bernadine Richter, Chapter 1019 president. Richter described Wiggins as “our go-to-guy.” Along with his duties as service officer, Wiggins volunteered to develop the chapter’s website and serve as webmaster. He also volunteered to step in as Sunshine Chairperson in 2010. “Gene’s unending energy and enthusiasm drive the rest of us to do our best to live up to the NARFE mission of service to others,” Richter said. “His passion for and dedication

The National Executive Board (NEB) meeting will be held in conjunction with the Federation Presidents Meeting at the Hyatt Regency Jacksonville Riverfront in Florida, on July 10-14, 2017. Registration forms should be returned by June 16, 2017. The 2018 national conference will be held Aug. 26-30 at the Hyatt Regency Jacksonville Riverfront in Florida. The 2020 conference will be held Aug. 30-Sept. 3 at the Westin Kierland Resort & Spa in Scottsdale, Arizona.

“Gene’s unending energy and enthusiasm drive the rest of us to do our best to live up to the NARFE mission of service to others.” —Bernadine Richter to our chapter’s members and our federal families is truly inspiring.” The national award is a tribute to a service officer who displayed “steadfast vigilance in caring for our federal family” during a distinguished tenure, she said. For the annual award cycle, NARFE chapter presidents can submit a written nomination to their federation president on behalf of a service officer. The federation president then selects a federation winner and forwards the name to the regional vice president, who selects regional winners. The national winner is chosen from the regional winners. The 2017 regional winners are: Region II: Robert Nakielny, Chapter 1063 (Pennsylvania

Federation); and Howard Dew, Chapter 1363 (Maryland Federation). Region III: Alva Rawles, Chapter 548 (Georgia Federation); and Larry T. Shaff, Chapter 2258 (South Carolina Federation). Region IV: Gene Wiggins, Chapter 1019 (Illinois Federation). Region V: Carol Cowiling, Chapter 148 (Iowa Federation). Region VI: Mary Marshall, Chapter 607 (Texas Federation). Region VII: Leon Gordon, Chapter 1400 (Arizona Federation); and Suzanne Stewart, Chapter 1085 (Colorado Federation). Region X: Willie Alston, Chapter 105 (North Carolina Federation); Shirley Forde, Chapter 685 (Virginia Federation); and Lorenzo Tyson, Chapter 519 (Tennessee Federation).

KEEP IN CONTACT WITH NARFE ON SOCIAL MEDIA

heck out NARFE’s digital communication channels to stay up to date with the latest news on benefits for federal employees and annuitants. If you have an email address on file, you’ll receive the Association’s weekly electronic news

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digest, NARFE NewsWatch, in your inbox every Tuesday. NARFE also posts breaking news and announcements on Facebook and Twitter. Find us at: • On Facebook, the NARFE page is at NARFE National

Headquarters. • NARFE’s Twitter handle is @narfehq. Like us on Facebook and follow us on Twitter to keep informed every day and contribute to the social media conversation.

Analyzing the Present and Planning for the Future

ARFE is committed to securing the Association’s future. To that end, the National Executive Board (NEB) and NARFE members decided in 2014 to create and biannually update a strategic plan for NARFE. While the mission and vision remains the same, strategic planning helps the organization set priorities, focus energy and resources, identify methods to measure progress and achievement, provide alignment among stakeholders and enable NARFE to adjust to a continually changing environment. Successful strategic planning for NARFE is predicated on: • A clear grasp of external opportunities and challenges • A realistic assessment of NARFE’s strengths and limitations • An inclusive approach • An empowered team and committee • Senior leader involvement • Clear priorities and steps • A commitment to change NARFE’s 10-member Strategic Planning Committee held their first meeting March 8-9 at Headquarters. The committee’s objective is to fully discuss, evaluate and provide recommendations on important issues to the Strategic Planning Team. In turn, the team will review the recommendations with federation presidents and the NEB before presenting a draft plan to the NEB for their input, edits and final approval. NARFE Secretary/Treasurer Jon Dowie chairs the Strategic Planning Team and the Strategic Planning Committee. He presided over the two-day meeting with Lou Ann Sabatier facilitating. The commit-

support the core mission? tee began with a review of • How should the fedan updated situation eration organizational analysis prepared by structure be updated the Strategic Planto reflect the misning Team. sion? Based on a In addition, lengthy discussion SECURE issues from the of the situation 2016 strategic plan analysis, the comTHE deemed worthy of mittee defined clear, FUTURE further discussion realistic planning also will be considered. goals as follows: align Proposed recommendations NARFE resources with the will be submitted to the Strategic mission of the organization; support Planning Team and the NEB for membership growth at the local and review by May 31. state level; define minimum roles NARFE President Thissen remindand responsibilities for leadership, advocacy and membership marketing ed the Strategic Planning Team and in federations; and prioritize national Committee members that while positive changes were made while at the and federation funds to best deliver 2016 National Convention in Reno, on mission. the organization faces an uncertain In future discussions, the Strategic Planning Committee will address future. It is now time to review what, why and how business is conducted the following issues: within NARFE. We welcome your • How can federations best serve questions and comments by email at chapter and national members? stratplan@narfe.org. • How can federation finances best

S T R AT E G I C PL ANNING

2017 STRATEGIC PLANNING TEAM AND COMMITTEE MEMBERS Jon Dowie (Chair of Team and Committee), National Secretary/ Treasurer Mark Bernstein, Region I New York Jacquelyn Lowe, Region II District of Columbia Mary Pierson, Region III Mississippi Joseph Cinadr, Region IV - Ohio Bruce Coleman, Region V - Iowa Warren Searls, Region VI Arkansas

Ted Van Hintum, Region VII Colorado Gerald Hall, Region VIII California Linda Silverio, Region IX Oregon Henry Brattlie, Region X - North Carolina Evelyn Kirby (team), Regional VP, Region II Richard Wilson (team), Regional VP, Region IX Bridget Boel (team), NARFE Marketing Director

W W W. N A R F E . O R G

Active and Retired Federal Employees ...

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Who Should Join the National Active and Retired Federal Employees Association? If your future security is tied to federal retirement benefits – federal retirees, current employees, spouses and individual survivors – you should join NARFE.

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• Get monthly issues of narfe magazine with news and insights for the federal community. • Access the NARFE Federal Benefits Institute for powerful resources to help you fully understand and manage your benefits. • Visit the Legislative Action Center to contact your representatives about bills affecting federal benefits. • Visit the Member Perks page for a full listing of the many time-, money- and hassle-saving benefits available only to NARFE members.

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Special Section

National Active and Retired Federal Employees Association

Consolidated Financial Statements for the Year Ended December 31, 2016

REPORT OF THE NATIONAL SECRETARY/TREASURER NARFE’s trends are continuing in positive directions. Although we had a decrease in members and associated dues revenue of $245,334 in 2016, we are driving down the loss of members significantly through the hard work of the Marketing Department. For the first time, we served lunch at the National Convention, which enabled our participants to move more easily though the convention and spend more time on NARFE’s business. In addition, we had produced the first NARFE mobile application for our participants and a more user friendly website, which enabled members to more easily know who was attending from the federations. We revamped the check-in process for participants and, by all accounts, everyone was pleased. The NARFE Headquarters building has several new roofs and we are benefiting from increased energy efficiency. The building is almost 30 years old and we will continue to implement our planned maintenance system in 2017. Net assets increased by $343,246 in 2016 mainly due to unrealized investment income (this is income recognized on our investment statements, but we did not actually sell any of our investments). We were able to reduce supporting services expenses by $848,691 overall and $345,553 in general administration expenses. This is the result of the entire staff contributing ideas and ways to be more cost-effective. Everyone realizes that we are entrusted with the members’ funds and we are trying to spend them wisely. Due to our members’ generosity, particularly those in the Sustainer program, NARFE-PAC funds continue to grow. We are able to better manage and distribute contributions since we now can forecast the total amount of available funds. Although hard to articulate in numbers, NARFE’s base continues to grow stronger through the leadership of the National Executive Board and the efforts of all staff.

REPORT OF THE NATIONAL EXECUTIVE BOARD AUDIT COMMITTEE

The National Executive Board (NEB) Audit Committee met March 31, 2017, by teleconference, with Julia Lafferty of the audit firm Councilor, Buchanan & Mitchell (CBM), P.C., certified public accountants, to review the audit of NARFE’s finances for the calendar year ended December 31, 2016. The NEB Audit Committee members participating were Region VII Vice President Rodney L. Adelman (Chair), Region VI Vice President Marshall Richards and Region X Vice President William Shackelford. The CBM audit firm’s representative provided a comprehensive review of NARFE’s Consolidated Financial Statements and Supplementary Information audit. They reported finding no weaknesses and have provided an unmodified opinion on our financial statements. The audit confirmed the increase in net assets at 2016 year-end in comparison to previous years. With the continuing decline in 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 and Finance staff and NARFE senior management for their continued work to achieve quality reporting, and the entire NARFE organization for continuing to successfully serve our members.

Rodney L. Adelman, Chair

W W W. N A R F E . O R G

Independent Auditors’ Report To 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, 2016, 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 entity’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 entity’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, 2016, 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. Report on Summarized Comparative Information We have previously audited the 2015 and 2014 consolidated financial statements of the Association, and our reports dated March 22, 2016, and April 1, 2015, respectively, expressed an unmodified audit opinion on those audited financial statements. In our opinion, the summarized comparative information presented herein as of and for the years ended December 31, 2015 and 2014, is consistent, in all material respects, with the 2015 and 2014 audited financial statements from which it has been derived.

Councilor Buchanan & Mitchell, P.C. Certified Public Accountants Bethesda, Maryland April 3, 2017

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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 FinancialOF Position STATEMENT FINANCIAL POSITION - CONTINUED CONSOLIDATED December 31, 2016 (With Comparative Totals as of December 31, 2015 and 2014) 31, 2016 DECEMBER (WITH COMPARATIVE TOTALS AS OF DECEMBER 31, 2015 AND 2014) 2016

Operating

Unrestricted Board Designated

Total Unrestricted

Temporarily Restricted

2015 Total

2016 Total

2014 Total

Liabilities and Net Assets Current Liabilities Accounts Payable and Accrued Expenses Interorganization Payables Chapter Dues Payable Deferred Revenue

Total Current Liabilities

491,640 4,186 103,203 2,356,289

35,200 64,392

2,955,318

99,592

491,640 39,386 103,203 2,420,681

566 -

3,054,910

566

448,919

327,799

776,718

3,404,237

427,391

3,831,628

566

Net Assets Unrestricted Temporarily Restricted

3,865,184

2,792,463

6,657,647

Total Net Assets

3,865,184

2,792,463

6,657,647

Noncurrent Deferred Revenue Total Liabilities

492,206 $ 415,137 $ 634,414 - * - * - * 103,203 117,764 118,126 2,420,681 2,496,947 2,658,486 3,016,090 *

3,029,848 *

3,411,026 *

776,718

872,669

863,921

3,792,808 *

3,902,517 *

4,274,947 *

6,657,647

6,215,759

6,305,184

706,421

7,364,068

7,020,822

6,726,491

NATIONAL ACTIVE AND RETIRED FEDERAL EMPLOYEES AND A421,307 FFILIATE 706,421 ASSOCIATION 706,421 805,063

STATEMENT OF FINANCIAL POSITION - CONTINUED CONSOLIDATED Total Liabilities and Net Assets $ 7,269,421 $ 3,219,854 $ 10,489,275 $ 706,987 $ 11,156,876 * $ 10,923,339 * $ 11,001,438 DECEMBER 31, 2016

(WITH COMPARATIVE TOTALS AS OF DECEMBER 31, 2015 AND 2014) 2016

Operating

Unrestricted Board Designated

Total Unrestricted

Temporarily Restricted

2016 Total

2015 Total

2014 Total

Liabilities and Net Assets Current Liabilities Accounts Payable and Accrued Expenses Interorganization Payables Chapter Dues Payable Deferred Revenue

491,640 4,186 103,203 2,356,289

35,200 64,392

491,640 39,386 103,203 2,420,681

566 -

Total Current Liabilities

2,955,318

99,592

3,054,910

566

Noncurrent Deferred Revenue

448,919

327,799

776,718

3,404,237

427,391

3,831,628

566

Net Assets Unrestricted Temporarily Restricted

3,865,184 -

2,792,463 -

6,657,647 -

Total Net Assets

3,865,184

2,792,463

6,657,647

$ 7,269,421

$ 3,219,854

$ 10,489,275

Total Liabilities

Total Liabilities and Net Assets

492,206 $ 415,137 $ 634,414 - * - * - * 103,203 117,764 118,126 2,420,681 2,496,947 2,658,486 3,016,090 *

3,029,848 *

3,411,026 *

776,718

872,669

863,921

3,792,808 *

3,902,517 *

4,274,947 *

706,421

6,657,647 706,421

6,215,759 805,063

6,305,184 421,307

706,421

7,364,068

7,020,822

6,726,491

706,987

$ 11,156,876 * $ 10,923,339 * $ 11,001,438 *

* Interorganizational receivables and payables eliminated in consolidation.

See accompanying Notes to Consolidated Financial Statements. -6W W W. N A R F E . O R G

NATIONAL ACTIVE AND RETIRED FEDERAL EMPLOYEES ASSOCIATION AND AFFILIATE ONSOLIDATED STATEMENT OF ACTIVITIES National Active and RetiredCFederal Employees Association and Affiliate NDED DECEMBER 2016 FOR THE YEAR Consolidated Statement of Activities ForEthe Year Ended31, December 31, 2016 (WITH COMPARATIVE TOTALS FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014) (With Comparative Totals for the Years Ended December 31, 2015 and 2014) 2016 Unrestricted Board Designated

Total Unrestricted

Temporarily Restricted

45,001

$ 7,081,151

2,170,576 122,738

2,170,576 122,763

2,280 816,896 138,987 54,192 346,335 80,025 767,693

84,000

2,280 816,896 138,987 54,192 346,335 80,025 851,693

11,535,872

129,026

11,664,898

1,727,176 686,217

72,510 627,049 249,403 64,582 395,645 81,191 823,776 27,917 -

Total Program Services

4,755,466

Supporting Services General Administration Membership Recruitment Membership Services Fundraising

2016 Total

2015 Total

2014 Total

$ 7,081,151

$ 7,326,485

$ 7,673,350

723,686 27,917

2,170,576 723,686 150,680

2,865,097 725,990 37,332

2,503,282 594,599 30,401

(851,693)

2,280 816,896 138,987 54,192 346,335 80,025 -

2,830 936,860 159,889 139,308 22,850 -

4,638 767,141 127,975 271,339 26,227 -

(100,090)

11,564,808

12,216,641

11,998,952

1,727,176 686,217

1,854,883 713,541

1,851,625 747,601

72,510 627,049 249,403 64,582 395,645 81,191 823,776 27,917 -

81,272 739,418 235,490 17,448 81,302 343,132 23,087 -

83,438 707,568 241,182 308,607 94,364 500,871 21,117 -

4,755,466

4,089,573

4,556,373

2,603,560 1,343,953 1,834,146 997,963

143,653 -

2,747,213 1,343,953 1,834,146 997,963

3,092,766 1,398,812 2,130,194 1,150,194

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

6,779,622

143,653

6,923,275

7,771,966

7,551,306

11,535,088

143,653

11,678,741

11,861,539

12,107,679

Operating Revenues and Support Membership Dues Contributions - Calendar, Note Pads, and Cards Contributions - PAC Contributions - Silver Circle and Other Contributions - Protect America’s Heartbeat Advertising Royalties Seminars and Conferences National Convention Revenue Other Net Assets Released from Restrictions Total Revenues and Support Expenses Program Services Communications Rebates to Federations New Member Rebates to Federations and Chapters Legislative Program Federal Benefits Program Seminars National Convention Protect America’s Heartbeat NARFE-PAC NARFE Alzheimer’s Fund Life Membership Fund

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

$ 7,036,150

784

(14,627)

(13,843)

365,369

90,362

455,731

366,153 3,499,031

75,735 2,716,728

441,888 6,215,759

$ 3,865,184

$ 2,792,463

$ 6,657,647

See accompanying Notes to Consolidated Financial Statements. -7-

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(100,090) 1,448 (98,642) 805,063 $

706,421

(113,933) 457,179

355,102 (60,771)

(108,727) 256,972

343,246 7,020,822

294,331 6,726,491

148,245 6,578,246

$ 7,364,068

$ 7,020,822

$ 6,726,491

NATIONAL ACTIVE AND RETIRED FEDERAL EMPLOYEES ASSOCIATION AND AFFILIATE

National Active and Retired Federal Employees Association and Affiliate OF CASH FLOWS CONSOLIDATED Consolidated Statement of Cash FlowsSTATEMENT For the Year Ended December 31, 2016 FOR THE YEAR ENDED DECEMBER 31, 2016 (With Comparative Totals for the Years Ended December 31, 2015 and 2014) (WITH COMPARATIVE TOTALS FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014)

NATIONAL ACTIVE AND RETIRED FEDERAL EMPLOYEES ASSOCIATION AND AFFILIATE 2015

2016

2014

CONSOLIDATED STATEMENT OF CASH FLOWS Cash Flows from OperatingFActivities OR THE YEAR ENDED DECEMBER 31, 2016

Increase(W in Net Assets $ 343,246 $ 2014) 294,331 $ ITH C OMPARATIVE TOTALS FOR THE YEARS ENDED DECEMBER 31, 2015 AND Adjustments to Reconcile Increase in Net Assets to Net Cash Provided by Operating Activities 2016 2015 2014 Depreciation and Amortization 385,066 534,414 Net Realized and Unrealized (Gains) Losses Cash Flows from Operating Activities Increaseon in Investments Net Assets $ 343,246 (154,618) $ 294,331 $446,287 148,245 Adjustments Reconcileof Increase in Net Assets Loss ontoDisposal Property and Equipment 23 to Net Cash Provided by Operating (Increase) Decrease in AssetsActivities Depreciation Amortization 385,066 168,488534,414 469,545 Accountsand Receivable - Net (230,808) Net Realized and Unrealized (Gains) Losses Prepaid Expenses and Deposits 7,719 17,069 on Investments (154,618) 446,287 68,880 Increase (Decrease) in Liabilities Loss on Disposal of Property and Equipment 23 2,998 Accounts Payable and Accrued Expenses 77,069 (219,277) (Increase) Decrease in Assets ChapterReceivable Dues Payable (362) Accounts - Net 168,488 (14,561) (230,808) 89,746 Prepaid Expenses and Deposits 7,719 (172,217)17,069 (30,124) Deferred Revenue (152,791) Increase (Decrease) in Liabilities Accounts Payable and Accrued Expenses Activities Net Cash Provided by Operating Chapter Dues Payable Deferred Revenue Cash Flows from Investing Activities

Purchases Investments Netof Cash Provided by Operating Activities Sales and Maturities of Investments Cash Flows from Investingand Activities Purchases of Property Equipment Purchases Investments Proceedsoffrom Sale of Property and Equipment

(728,325) 640,684 321,993 (107,466) (647,163) -

(647,163) 245,000 (338,489) -

(338,489) (513,798)

(740,652)

143,995 175,065 (513,798) (740,652) 1,230,390 1,055,325

(99,968) 1,155,293

$ 1,374,385

Supplementary Disclosure of Cash Flow Information Cash Paid during the Year for Income Taxes

129,620 (7,867) (230,359)

640,215 (349,732) 688,863

143,995 175,065 $ 1,374,385 1,230,390 1,055,325$

Cash and Cash Equivalents, EndCash of Year Supplementary Disclosure of Flow Information Cash Paid during the Year for Income Taxes

89,746 (30,124)

640,684

(7,867) (230,359)

245,000 -

(496,220)

Net Increase (Decrease) in Cash and Cash Equivalents Cash Equivalents, End of Year Cash andand CashCash Equivalents, Beginning of Year

68,880 2,998

129,620 688,863

58,414 321,993 (205,802) (496,220) (107,466) 900 -

Net Increase (Decrease) in Cash and Cash Equivalents Net Cash Used in Investing Activities Cash and Cash Equivalents, Beginning of Year

469,545

77,069 640,215 (219,277) (14,561) (362) (172,217) (152,791)

58,414 (205,802) (349,732) (728,325) 900

Sales and Maturities of Investments Purchases of Property Equipment Net Cash Used inand Investing Activities Proceeds from Sale of Property and Equipment

148,245

833

1,230,390

833 $

(99,968)

1,230,390 1,155,293 $ $

$ -

1,055,325

230

See accompanying Notes to Consolidated Financial Statements.

See accompanying Notes to Consolidated Financial Statements. -8-8-

W W W. N A R F E . O R G

National Active and Retired Federal Employees Association and Affiliate Notes to Consolidated Financial Statements December 31, 2016 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. Fifty-four (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 1,132 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 joining chapters. 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 1,132 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 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, 2016, 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 straightline 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, 2016, was $385,066. 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, 2016. Included in unrestricted net assets as of December 31, 2016, 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 $706,342 for the life membership fund and $86,121 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 Report, Volume 63, No. 7, published on November 6, 2014. 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 $26,600 and $45,900, 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 income tax (UBIT). 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% likelihood of being realized upon ultimate settlement. There were no unrecognized tax benefits identified or recorded as liabilities for 2016. 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 2016. The Association’s Form 990,

Return of Organization Exempt from Income Tax, is subject to examination by the taxing authorities, generally for three years after it was 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, 2016, were not significant. NARFE-PAC’s tax return filed with the IRS is subject to examination by the taxing authorities, generally for three years after it was filed. 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, 2015 and 2014, from which the summarized information was derived. Reclassifications Certain 2015 amounts have been reclassified to conform to the 2016 presentation. Such reclassifications had no effect on reported changes in net assets.

3. CONCENTRATION OF CREDIT RISK For purposes of Federal Deposit Insurance Corporation (FDIC)overage, cash accounts are maintained in several different banks. As of December 31, 2016, bank deposits exceeded the $250,000 FDIC-insured limit by $720,460.

W W W. N A R F E . O R G

For purposes of Federal Deposit Insurance Corporation (FDIC) coverage, cash accounts are maintained in several different banks. As of December 31, 2016, bank deposits exceeded the $250,000 FDIC-insured limit by $720,460. 4.

I4. NVESTMENTS AND FAIR VALUE MEASUREMENTS INVESTMENTS AND FAIR VALUE MEASUREMENTS

6. RETIREMENT PLAN The Association has a RetireDecember 31, thethe Association and Affiliate’s only assets AsAs ofofDecember 31,2016, 2016, Association and Affiliate’s onlyorassets orment liabilities measured at Savings Plan (the Plan). liabilities measured at fair value on a recurring basis consisted of the folfair value on a recurring basis consisted of the following investments: Employees are eligible to particilowing investments: pate in the Plan on the first day of the Level 1 Level 2 month coinciding Level 3 with or next following the employee’s Inputs Inputs Fair Value Inputs hire date. Employees become matching Corporate Stocks and Equity Mutual Funds $ eligible for - employer $ $ 3,274,738 $ 3,274,738 funds on the first day of the Plan Corporate Bonds 2,811,107 2,811,107 Year (January 1) or the first day Government Backed Securities 179,144 179,144 - Plan of the seventh month of the Certificates of Deposit 16,369 16,369 Year (July 1) coinciding with or next following the hire date. The Total Investments $ 6,281,358 $ 6,281,358 $ Association $matches 60 -percent of each employee’s voluntary contriACTIVE AND NATIONAL RETIREDAFCTIVE EDERAL AND EMPLOYEES RETIRED FA EDERAL SSOCIATION EMPLOYEES AND AFFILIATE ASSOCIATION AND Abution FFILIATE (up to 6 percent of annual assets valued using Level 1SSOCIATION inputs based on NFinancial ATIONAL AR CTIVE AND RETIRED EDERAL EA MPLOYEES Aare SSOCIATION ANDunadjusted AFFILIATE quoted market prices NATIONAL A CTIVE AND ETIRED FEDERAL EF MPLOYEES AND A FFILIATE Financial assets valued using Level 1 inputs are based on unadjusted compensation). Total contribuwithin active prices markets. TO Cmarket ONSOLIDATED FTO INANCIAL C ONSOLIDATED STATEMENTS FINANCIAL STATEMENTS NOTES NOTES quoted within active markets. tions made by the Association OTES TO CONSOLIDATED FSINANCIAL STATEMENTS CNONSOLIDATED FINANCIAL TATEMENTS NOTES TO ECEMBER 31, 2016 ECEMBER 31,based 2016 primarily on D D Financial assets valued using Level 2 inputs are were $120,737 for the year ended ECEMBER 31, 2016 31, 2016 DECEMBERD Financial valued using Level inputs areAND based primarily quoted prices similar ONAL ACTIVE N ATIONAL ANDprices RETIRED Aassets CTIVE FEDERAL AND Rassets ETIRED EMPLOYEES EDERAL A E MPLOYEES ASSOCIATION AFFILIATE ANDon AFFILIATE quoted for similar inFactive or2SSOCIATION inactive markets. December 31, for 2016. Financial assets valued using Level 3 inputs, if any, are valued using unassets in active or inactive markets. 4. NTS AND NVESTMENTS VALUE M EASUREMENTS AND AIR VCFALUE (CEASUREMENTS ONTINUED M ) INANCIAL (CONTINUED ) inputs 4. FAIR IIobservable NVESTMENTS AND AIR VTO ALUE M (C)ONTINUED ) INVESTMENTS AND FTO AIRC VONSOLIDATED ALUE MF EASUREMENTS (CEASUREMENTS ONTINUED OTES OTES ONSOLIDATED INANCIAL STATEMENTS F Sobservable TATEMENTS N NFto 7. SUBSEQUENT EVENTS inputs measure fair value to the extent that ECEMBER 31, 2016 ECEMBER 31,- 2016 Dthereby Dfor The Association and Affiliate 12 are not available, allowing situations in which there is little, if Financial assets using 3any, inputs, if any, areany, valued unobservable inputs to inputs to Financial assets valued usingvalued 3 inputs, are valued using unobservable inputs ssets valued Financial using Level assets 3 Level valued inputs, using if Level any,ifLevel are valued 3 inputs, using if unobservable areusing valued inputs usingto tounobservable have evaluated subsequent events any, market activity for the asset or liability at the measurement date. The value tothat the extent that inputs observable inputs are notthereby available, thereby forallowing for measure fairmeasure value tofair the extent observable are not available, allowing forallowing r value to measure the extent fair that value observable to the extent inputs that are observable not available, inputs thereby are not allowing available, for thereby through April 3, 2017, the date on fair measurement objective to determine an exit price from the situations there isVALUE little, ifis any, for the asset or liability the situations in which iswhich little, if market any, activity the liability at the the 4. AND INVESTMENTS STMENTS Fvalue AIR Vin ALUE AND EASUREMENTS FAIR M (C EASUREMENTS ONTINUED )activity (Casset ONTINUED ) the n which there situations is there little, inwhich ifM any, there ismarket little, activity if market any, for for the market asset activity ororliability for at asset orat which liability at the the consolidated financial perspective of a market that holds the asset or owes the liability. measurement date. The fairparticipant value measurement objective is toan determine an exitthe price from the measurement date. The fair value measurement objective is to determine exit price from nt date. The measurement fair value measurement date. The fair objective value measurement is to determine objective an exit is price to determine from the an exit price from the statements were available to be income forusing the if year ended December 31, 2016, consisted of to ncial assets of Financial valued using assets valued 3that inputs, Level any, 3are inputs, ifthe using any, are unobservable valued using inputs unobservable inputs to perspective of aLevel market participant that holds the asset or owes the liability. perspective aInvestment market participant holds the asset orvalued owes liability. d. issue of a market perspective participant of that a market holds the participant asset or that owes holds the liability. the asset or owes the liability. the ure fair value measure tofollowing: the fair extent value thattoobservable the extentinputs that observable are not available, inputs are thereby not available, allowingthereby for allowing for Investment income for yearismarket ended December 31, 2016, consisted of the Investment income for the ended December 31, the following: ions in which situations there in is year little, which ifthe there any, little, activity if2016, any,consisted market for the ofactivity asset or for liability the following: asset at the or liability at the income forInvestment the year ended income December for the year 31, 2016, endedconsisted December of 31, the 2016, following: consisted of the following: NARFE Temporarily Temporarily urement date. measurement The fair value date. measurement The fair value objective measurement is to determine objective anis exit to determine price fromanthe exit priceAdditional from the Unrestricted Restricted Total Unrestricted Temporarily Restricted Total Temporarily Financial Data ective of a market perspective participant of a market that holds participant the asset thatorholds owesthe theasset liability. or owes the liability. Unrestricted Restricted Unrestricted Total Restricted302,561 Total Dividends andDividends Interest and Interest $ 301,113 $ $301,1131,448 $ $ 1,448 302,561 $ The salaries of the tment income Investment the year income ended forDecember the year ended 31, 2016, December consisted 31, of2016, the following: consisted of- the following: Net Realized and Unrealized Gains 154,618 154,618 Net Realized andfor Unrealized Gains 154,618 154,618 National Executive Board, as nd Interest Dividends and Interest $ 301,113 $ $1,448301,113 $ 302,561 $ 1,448 $ 302,561 Temporarily of December and Unrealized Net Realized Gains andIncome Unrealized Gains 154,618 154,618 - $ $ Temporarily 154,618 154,618 31, 2016, Total Investment Total Investment Income 1,448 457,179 $ 455,731 $ $455,7311,448 457,179 $ Unrestricted Unrestricted Restricted Restricted Total Total are as follows:

stment Total Investment Income 455,731 5.Income TEMPORARILY RESTRICTED TEMPORARILY RESTRICTED NET ASSETSN$ET ASSETS

$1,448455,731 $

457,179 $ 1,448

457,179

President: $116,958 301,113 $$ 301,113 1,448 $$ 302,561 1,448 $ 302,561 NET ASSETS 154,618 154,618 154,618 154,618 Temporarily restricted net assets are for the following purposes as of31, December Temporarily available forNavailable the purposes as of December 2016: 31, 2016:Secretary/Treasurer: ILY R EMPORARILY Nnet ETassets ASSETS Rare ESTRICTED ETfollowing A SSETS 5.ESTRICTED Trestricted Temporarily restricted net assets are available for the following pur$104,728 al Investment Income Total Investment Income 455,731 $$ 455,731 1,448 457,179 1,448 $ 457,179 NARFE-PAC $ 669,425 NARFE-PAC $$$ 669,425 poses as of December 31, 2016: $ yNARFE restricted net Temporarily assets are restricted available for net the assets following are available purposes for the as of following December purposes 31, 2016: as of December 31, 2016: NARFE Alzheimer’s Fund 36,996 Alzheimer’s Fund 36,996 Regional Vice Presidents: 5. T ORARILY R ESTRICTED EMPORARILY N ET R ESTRICTED A SSETS N ET A SSETS $25,970 Total Temporarily Restricted Net Assets $ 706,421 Total Temporarily Restricted Net Assets $ 706,421 C NARFE-PAC $ 669,425 $ 669,425

ends and Interest Dividends and Interest $ TEMPORARILY RESTRICTED ealized and 5. Unrealized Net Realized Gains and Unrealized Gains

In 2016, NARFE’s investheimer’s Fund NARFE Alzheimer’s Fund 36,996 36,996 orarily restricted Temporarily net assets restricted are available net assets for the arefollowing available purposes for the following as of December purposes31, as 2016: of December 31, 2016: Net assets were released donor by restrictions incurring otherwise satisfying Net assets were released from donor from restrictions incurringby expenses or expenses otherwiseorsatisfying ments were held with these porarily Restricted Total Net Temporarily Assets Assets $ $ 706,421 $669,425 706,421 the restricted purposes for the December yearNet ended December 2016, as follows: the restricted purposes for the yearRestricted ended 31, 2016, as 31, follows: FE-PAC NARFE-PAC 669,425 $ firms: FE Alzheimer’s NARFE Fund Alzheimer’s Fund 36,996 36,996 NARFE-PAC $ 823,776

• Operating were released Net from assets donor wererestrictions released from by incurring donor restrictions expenses by or incurring otherwiseexpenses satisfying or otherwise satisfyingFund: NARFE Alzheimer’s Fund 27,917 NARFE Alzheimer’s Fund 27,917 al Temporarily Total Restricted Temporarily Net Assets Restrictedfrom Net Assets $ expenses 706,421 $ 706,421 Stanley and The Net assets were released donor restrictions by incurring Morgan d purposesor the for restricted the year ended purposes December for the year 31, 2016, endedasDecember follows: 31, 2016, as follows: otherwise satisfying the restricted purposes for the year ended Decem-

NARFE-PAC

Total Net Assets from Restrictions Total Net Assets Released fromReleased Restrictions

823,776

Vanguard Group

ssetsDue were released Net assets were donor released fromRestrictions donor by incurring restrictions expenses by incurring or otherwise satisfying or $otherwise Due tofrom ofrestrictions Program 851,693satisfying ber 31, 2016, as follows: to Satisfaction ofSatisfaction Program Restrictions $ 823,776 851,693 C NARFE-PAC $expenses •$ Life823,776 Membership Trust stricted the restricted forAlzheimer’s the year purposes ended forDecember the year ended 31, 2016, December as follows: 31, 2016, as follows: heimer’spurposes Fund NARFE Fund 27,917 Fund:27,917 6. RETIREMENT PLAN RETIREMENT PLAN Morgan FE-PAC NARFE-PAC $ 823,776 $ 823,776 Stanley Assets Released Total fromNet Restrictions Assets Released from Restrictions FE Alzheimer’s Fund NARFE 27,917to participate 27,917 The Association has a Fund Retirement PlanEmployees (the Plan). are Employees areparticipate eligible The Association has aAlzheimer’s Retirement Savings PlanSavings (the Plan). eligible atisfaction of Program Due to Restrictions Satisfaction of Program Restrictions $ to 851,693 $ 851,693 • Contingency Fund: in the Plan on the firstmonth day ofcoinciding the monthwith coinciding with or nextthe following the hire employee’s hire in the Plan on the first day of the or next following employee’s Wells Fargo and Morgan al Net Assets Released Total Net from Assets Restrictions Released from Restrictions date. become Employees become eligible for employer matching on the firstPlan day Year of the Plan Year date. Employees eligible for employer matching funds on thefunds first day of the Stanley. ue P toLAN Satisfaction Due of Program to Satisfaction $ 851,693 $ 851,693 NT 6. RETIREMENT PRestrictions LAN of Program Restrictions 1) day or the firstseventh day of the seventh month of the(July Plan 1) Year (July 1)with coinciding with or (January 1) (January or the first of the month of the Plan Year coinciding or next following the hire date. The Association matchesof60each of each voluntary employee’s voluntary next following the hire date. The Association 60 percent employee’s ation hasPaLAN The Retirement Association Savings has Plan a Retirement (thematches Plan). Savings Employees Plan (the arepercent eligible Plan). Employees to participate are eligible to participate REMENT 6. R ETIREMENT PLAN (up to of6 annual percent compensation). of annual compensation). Total contributions made by the contributioncontribution (up to 6 percent Total contributions made by the on the firstAssociation inday theofPlan thewere on month the first coinciding day of with the month or next coinciding following with the employee’s or next following hire the employee’s hire $120,737 for the year ended December 31, 2016. Association were $120,737 for the year ended December 31, 2016. Association The has aAssociation Retirementhas Savings a Retirement Plan (theSavings Plan). Employees Plan (the Plan). are eligible Employees to participate are eligible to participate

oyees become date. eligible Employees for employer becomematching eligible for funds employer on thematching first day of funds the Plan on the Year first day of the Plan Year Plan onfirst the inUBSEQUENT first the day Plan ofon the the month first day coinciding ofof thethe month with or coinciding next following with orthe next employee’s following hire the1)employee’s 7. S E VENTS the (January day of the 1) or seventh the first month day seventh Plan Year month (July of 1) the coinciding Plan Year with (July or coincidinghire with or Sor UBSEQUENT E VENTS 60 | J U N 2 0 17 Employees date. become Employees eligible for become employer eligible matching for employer funds on matching the first funds day of on the the Plan first Year day of the Plan voluntary Year ing the hireThe next date. following The Association the hire date. matches The 60 Association percent of matches each employee’s 60 percent voluntary of each employee’s Association and Affiliate have evaluated subsequent events through April 3, the datewith or The Association andday Affiliate have evaluated subsequent events through 3,Year 2017, the date ary 1) or the (January first 1)oforthe the seventh first daymonth of the ofseventh the Plan month Year of (July theApril 1) Plan coinciding (July with 1)2017, or coinciding n (up to 6contribution percent of annual (up to 6compensation). percent of annual Total compensation). contributions made Total by contributions the made by the

Savings from Sea to Shining Sea. Your National Active and Retired Federal Employees membership could get you a special discount on auto insurance.

Some discounts, coverages, payment plans and features are not available in all states or all GEICO companies. Discount amount varies in some states. One group discount applicable per policy. Coverage is individual. In New York a premium reduction may be available. GEICO is a registered service mark of Government Employees Insurance Company, Washington, D.C. 20076; a Berkshire Hathaway Inc. subsidiary. ÂŠ 2017

geico.com/fed/narfe | 1-800-368-2734

Member Perks

SAVE MONEY WITH NARFE PERKS NARFE appreciates your service, and so do businesses across the country. Whether you are planning your next vacation or planning for retirement, members can save money on everyday purchases, thanks to our Affinity Partners. It’s just one more way we’re able to say “thank you” for being a NARFE member. FINANCE AND LEGAL

enhanced dental insurance and longterm care.

PRODUCTS

MOVING SERVICES

InFirst Federal Credit Union 800-328-1500 www.infirstfcu.org As a member of NARFE, you have the privilege of joining InFirst Federal Credit Union, which has been serving active and retired federal employees since 1935. The credit union offers extensive services at competitive rates to members nationwide at 5,000+ shared branches, 55,000 surcharge-free ATMs and 24/7 phone access. Accounts are insured by NCUA up to $250,000.

INSURANCE

GEICO 800-368-2734 www.geico.com/fed/narfe GEICO offers a special discount opportunity for NARFE members. To find out how much you could save, visit our website or call today and mention that you are a NARFE member. Have your current coverage information available in order to secure a comparable quote. Your completed quote will help benefit NARFE! For complete terms and conditions, visit www.narfe.org/memberperks.

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Bekins Van Lines 800-248-4810 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. Please mention you are a NARFE member.

Omaha Steaks 800-228-9055 www.omahasteaks.com/ NARFE Since 1917, Omaha Steaks has been delivering customers the finest gourmet steaks, seafood, poultry, pork, sides and desserts. Omaha Steaks make memorable gifts for any holiday, or you can enjoy a gourmet meal right at home. NARFE members can enjoy FREE SHIPPING on select combos and an additional 10% DISCOUNT at checkout! If calling, use promo code YTZ.

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

NARFE MERCHANDISE

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Purchasing Power 866-670-3479 purchasingpower.com/NARFE

With Purchasing Power, thousands of brand-name products are within reach. As members of NARFE, you can buy today and pay over time through payroll or annuity allotment. Choose from the latest computers, appliances, vacation packages and more. Never worry about hidden fees, credit checks or interest. Pay over 6 or 12 months, and you’re done. Save 5% with code NARFEVIP.

TELECOMMUNICATIONS

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, clothing, accessories, cups and mugs, plaques and clocks, and much, much more. Check out our online catalog for our customizable product line.

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channels are available, including 185+ in HD, and over 130,000 On Demand titles, thousands free. This exclusive onlineonly savings is only available to new Verizon customers or those upgrading to the Triple Play Package.

phone number or website above; cannot be redeemed at individual hotels. Choice Hotels brands are: Comfort Inn, Comfort Suites, Sleep Inn, Ascend Collection, Cambria, MainStay Suites, Suburban, EconoLodge, Clarion, Quality and Rodeway Inn.

TRAVEL

Alamo 800-462-5266 www.alamo.com Drive Happy® with Alamo® where NARFE members receive year-round discounts. Call or visit our website today and reference Contract ID 262544.

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WELLNESS

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use promo code 8000002694 when calling or booking online.

Wyndham Hotel Group 877-670-7088 NARFE members 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. Call to reserve your room today at one of these fine hotels: Wyndham Hotels and Resorts®, Days Inn®, Ramada Worldwide®, Baymont Inns and Suites®, Hawthorn Suites® By Wyndham, Microtel Inns and Suites®, Howard Johnson®, Travelodge® and Knights Inn®. Advance reservations required through phone number above; cannot be redeemed at individual hotels.

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Life Line Screening 800-324-9906 www.lifelinescreening.com/ NARFE Life Line Screening, America’s leading provider of community-based preventive health screenings, will conduct health screenings using state-ofthe-art ultrasound technology in your neighborhood. To schedule an appointment, please call the number above and give the operator code number BKHN075 or visit the website.

NEW

Sunrise Senior Living www.SunriseSeniorLiving.com Sunrise Senior Living, a leading provider of high-quality, individualized, senior living services, offers NARFE members a special, discounted rate. Mention code: NARFE-discount during your visit and receive a one-time 5% off of suite/room rates at any of Sunrise’s U.S. communities for one year. For a complete list of Sunrise locations, visit www.SunriseSeniorLiving.com. * Void where prohibited by law. Discount not valid for skilled nursing admissions. Restrictions may apply. Discount not valid for respite/short-term stays of fewer than 90 days. May not be combined with other discounts or offers. Discount valid for a period of twelve (12) consecutive months only.

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. Check out Member Perks in the NARFE website for more details! W W W. N A R F E . O R G

The Way We Worked

ORIGINS OF SOCIAL SECURITY In this 1935 photo, Social Security agents help unemployed workers register for jobs and fill out benefit claims. Congress passed the Social Security Act that year to assist those in need, including the elderly and unemployed. Previously, assistance was up to state and local governments. The Depression, however, inspired federal involvement to help those facing poverty. Today, the Social Security Administration manages a complex social insurance program, administers supplemental income programs, assigns Social Security numbers and maintains earnings records for workers. PHOTO from the records of the Franklin D. Roosevelt Library, National Archives; courtesy of National Archives History Office; 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. To join, visit http://shfg.org. 64

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2 0 17

DID YOU KNOW? Social insurance programs date back to the early 1880s, when Germany created a system that provided coverage for sickness, maternity and old age. Similar to the U.S. model, Germany required contributions from workers. The U.S. also had a pension program for Union veterans, their survivors and dependents after the Civil War. In 1894, these pension payments represented 37Â percent of the federal budget, according to the Social Security Administrationâ&#x20AC;&#x2122;s website at www.ssa.gov.

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IMPORTANT CONSUMER INFORMATION: Jitterbug is owned by GreatCall, Inc. Your invoices will come from GreatCall. Plans and Services require purchase of a Jitterbug phone and a one-time setup fee of $35. *Monthly fees do not include government taxes or assessment surcharges and are subject to change. Coverage is not available everywhere. 5Star or 9-1-1 calls can only be made when cellular service is available. 5Star Service will be able to track an approximate location when your device is turned on, but we cannot guarantee an exact location. 1We will refund the full price of the Jitterbug phone and the activation fee (or setup 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. There are no additional fees to call GreatCall’s U.S.-based customer service. However, for calls to a GreatCall Operator in which a service is completed, you will be charged 99 cents per call, and minutes will be deducted from your monthly rate plan balance equal to the length of the call and any call connected by the Operator. Jitterbug, GreatCall, and 5Star are registered trademarks of GreatCall, Inc. ©2017 GreatCall, Inc. ©2017 firstSTREET for Boomers and Beyond, Inc.

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