FEB
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LACK OF CAPACITY IN MANAGING BENEFITS
Volume 94 • Number 2
COVER STORY
PERSONAL CYBERSECURITY STEPS YOU CAN TAKE
P.26
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* The insured may need to submit for reimbursement. State and/or local taxes may apply. Prices and product subject to change. Price shown includes the cost of comprehensive hearing exam. Examination and testing for prescribing of hearing aids is covered under the Blue Cross Blue Shield Association’s Service Benefit Plan (also known as the Federal Employee Program or FEP). The member should confirm that the provider rendering the hearing exam participates with their local Blue Cross Blue Shield plan. The Service Benefit Plan will pay a hearing aid benefit up to $2,500 total every 3 calendar years for adults age 22 and over, and up to $2,500 total per calendar year for members up to age 22. Do not rely on this communication piece alone for complete benefit information. All benefits are subject to the definitions, limitations, and exclusions in your Service Benefit Plan brochure. The Blue365® Discount Program offers access to savings on items that you may purchase directly from independent vendors, which may be different from items covered under the Service Benefit Plan or any other applicable federal healthcare program. For hearing aids, acupuncture, chiropractic and vision services, you must exhaust your Service Benefit Plan benefits first before accessing the savings of the Blue 365® Discount Program. To find out what is covered under your policy, contact Service Benefit Plan. The products and services described herein are neither offered nor guaranteed under any local Blue company’s contract with the Medicare program. These items are not subject to the Medicare appeal process. Any disputes regarding these products and services are not subject to the Service Benefit Plan’s Disputed Claims process. Blue Cross and Blue Shield Association (BCBSA) may receive payments from Blue365 vendors. Neither the the Service Benefit Plan, BCBSA, nor any local Blue company recommends, endorses, warrants or guarantees any specific Blue365 vendor or item. The Service Benefit Plan reserves the right to change, modify, or terminate any item and vendors made available through Blue365, at any time. Available at participating locations until 12/31/2018. Beltone is made available through Blue365, which provides exclusive health and wellness deals and is a program of Blue Cross Blue Shield Association, an association of independent Blue Cross and Blue Shield Companies. Beltone is an independent company providing discounts on hearing aids. © 2017 GN Hearing Care corporation. All rights reserved. Beltone is a trademark of GN Hearing Care Corporation. Apple, the Apple logo, iPhone, iPad, iPod touch and Apple Watch are tradmarks of Apple Inc., registered in the U.S. and other countries.
JAN
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COVER STORY
WASHINGTON WATCH
6
How the 2 Percent 2018 COLA Was Determined
7
DOL Delays Key Fiduciary Rule Provisions
8
Protect Your Pay and Benefits During the FY2019 Budget Process
9
A Look at the History of Pay Parity
10
NARFE’s Legislative Accomplishment in 2017
12
NARFE Bill Tracker
COLUMNS
CYBER AWARENESS FOR THE FEDERAL COMMUNITY. If you don’t know much about cybersecurity, you’re not alone. Learn how you can protect your data from cyberattacks.
4
From the Executive Director
42 Managing Money DEPARTMENTS
16 Questions & Answers
34
LACK OF CAPACITY IN MANAGING BENEFITS: Plan for the future before a loved one loses capacity to manage their federal benefits.
44 For the Record:
TSP Returns, Retirement Claims Status, Countdown to COLA
46 NARFE News 52 The Way We Worked
On the Web VISIT US ONLINE AT:
www.narfe.org LIKE US ON FACEBOOK:
NARFE National Headquarters FOLLOW US ON TWITTER:
@narfehq
ON THE COVER
Illustration by GRAPHEK W W W. N A R F E . O R G
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FEBRUARY 2018 | Volume 94 | Number 2
National Active and Retired Federal Employees Association EDITOR Susan Boswell ASSISTANT EDITOR Christopher Johnson GRAPHIC DESIGN GRAPHEK EDITORIAL BOARD Richard G. Thissen, Jon Dowie Barbara Sido 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 OFFICERS RICHARD G. THISSEN, President; natpres@narfe.org JON DOWIE, Secretary/Treasurer; natsectreas@narfe.org EXECUTIVE DIRECTOR BARBARA SIDO, execdir@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) 800-456-8410 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
www.narfe.org
narfe (ISSN 1948-4453) is published monthly by the National Active and Retired Federal Employees Association (NARFE), 606 N. Washington St., Alexandria, VA 22314. Periodicals postage paid at Alexandria, VA, and additional mailing offices. Members: Annual dues includes subscription. Nonmember subscription rate $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 © 2018, 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 Executive Director
ONWARD TO NARFE’S CENTENNIAL
W
ith the association’s 100th
efficiently are central to the NARFE Next mission. anniversary fast approaching Progress on all three fronts is evident. The NARFE Federal Benefits Institute, offering webinars on in 2021, we are all hard at topics of critical interest to both active and retired federal employees, has significantly increased the work to ensure that NARFE enters its value offered to members and prospective memcentennial strong, relevant and best able to bers. The Congressional District Leader (CDL) structure that is successfully building across the deliver value to the federal community. country is providing an ever stronger advocacy network. A new NARFE website will be launched As I write this column, I am thrilled with as part of our efforts to enhance our digital comthe progress we are making. These efforts, the munications. Finally, a business model innovation NARFE Next initiatives, will be ongoing over project, designed to help us bring focus and rethe next two years, but we need not wait for sources to the NARFE programs that deliver value a grand unveiling. Great strides have already to Feds, is well underway. been made – they are NARFE Next Now. Perhaps most exciting of all is NARFE’s premier At NARFE’s 2016 National Convention, delconference that will take place on August 26-28. egates voted to begin a transformation process. We’ll head to Jacksonville, Florida, for FEDcon18, Outcomes included One Member, One Vote and where attendees will benefit from educational Optional Chapter Membership. Each represessions on federal benefits and advocacy. NARFE sents both a structural and cultural shift in the officers will be trained on chapter and leadership organization, putting the vote and the chapter development. Wellness sessions will provide inoption directly in the hands of each member. sights on our own heath and providing care for our Delivering value, becoming the true go-to loved ones. The dynamic speakers will motivate and resource for our community and operating inspire us. FEDcon18 registration opens February 1. Be sure to register early to get the early bird rate! As always, I am interested in hearing from you. Please feel free to contact me at NARFE2021@ narfe.org with your thoughts as we build toward a grand centennial worthy of celebration!
BARBARA SIDO NARFE EXECUTIVE DIRECTOR execdir@narfe.org 4
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Washington Watch
HOW THE 2018 2 PERCENT COLA WAS DETERMINED
I
n January, retirees should have noticed a slight bump in their annuity and Social Security benefit, a welcome increase given the low and non-existent cost-of-living adjustments (COLAs)
in 2016 and 2017. The year 2018 brought in a 2.0 percent increase in civil service and military retiree annuities and Social Security payments. After two years of stagnation, how did retirees end up with the biggest adjustment since the beginning of 2012?
To answer this, let’s first look at how the COLA is calculated. Understanding this calculation unlocks the mountain of information that the Bureau of Labor Statistics (BLS) releases in the middle of every month. The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) is the index used for federal annuities and tracks increases in the prices of consumer goods including food and beverages, housing, clothing, transportation, medical care, recreation, education, communication and more. A number is then produced that indicates the change in prices of consumer goods. 6
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In particular, the third quarter of the year (July, August and September) is extremely important for retirees, because the average CPI-W from those months is compared to the third-quarter average for the last year in which a COLA became effective. The percent change from that comparison determines the new COLA. Let’s look back on what hap-
ACTION ALERT!
pened in those months and their significance. In late August, Hurricane Harvey battered Texas and parts of Louisiana, causing billions of dollars in damage. Shortly after, in September, Hurricane Irma made landfall in Florida. These terrible events upended millions of people and caused massive damage to our nation’s infrastructure, including oil drilling platforms, refineries and pipelines. The days and weeks after, gas prices soared throughout the country and the CPI-W caught on. In September alone, the gasoline index rose 13.1 percent, the largest rise since June 2009, and accounted for nearly three-quarters of the seasonally adjusted increase in all items. This increase caused the
FEBRUARY
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department of labor delays key fiduciary rule provisions September CPI-W to spike and dramatically increased the thirdquarter average. Other categories, like food and medical care, rose throughout the year but energy commodities surged and had a dramatic effect on the annual COLA. The increase in gas prices were in large part the reason for the COLA upswing in 2018. —ROSS APTER, LEGISLATIVE ASSOCIATE
MYTH vs. REALITY MYTH: Members of Congress can retire and receive their full salary as their pension after serving just one term. REALITY: Members of Congress (elected in or after 1986) are eligible for a pension at age 62 if they have completed at least five years of service. Members are eligible for a pension at age 50 if they have completed 20 years of service, or at any age after completing 25 years of service. The amount of the pension depends on years of service and the average of the highthree years of salary, just like federal retirees. By law, the starting amount of a member’s retirement annuity may not exceed 80 percent of the final salary.
T
he Department of Labor (DOL) took a major step on November 27 toward reversing protections that would ensure retirement savers receive financial advice in their own best interest, instead of guidance that puts the interests of their advisor above their own. NARFE advocated in favor of the fiduciary rule, which would protect Thrift Savings Plan (TSP) investors from receiving poor financial advice regarding their TSP funds. Specifically, the DOL announced an 18-month extension for the start of provisions of the fiduciary rule to ensure effective enforcement. The provisions – the full phase-in of the best-interest contract exemption and the principal transactions exemption – were delayed from January 1, 2018, to July 1, 2019. DOL was ordered to reassess the rule’s impact in a February 3, 2017, memorandum from President Trump and says it needs extra time to complete the review. The fiduciary rule’s impartial
conduct standards came into effect on June 9, 2017. Those standards require an advisor to act with a professional standard of care and give advice that is in the best interests of the client, not in favor of the competing financial interests of the advisor or firm. The rule also requires that compensation is reasonable and that the advisor make no materially misleading statements. But without full phase-in of the enforcement provisions, financial firms will not be required to provide their clients with the warranties or contracts necessary to fully enforce violations of the impartial conduct standards in court. Instead, they will need to rely on enforcement by the DOL. The DOL is expected to use the 18-month delay to provide the time needed to undertake a new rulemaking process that would repeal the enforcement provisions of its conflict of interest rule. —JOHN HATTON, DEPUTY LEGISLATIVE DIRECTOR
GOVERNMENT SHUTDOWN AVERTED A day before the government was set to shut down – and just days before Christmas – the House and Senate passed another short-term continuing resolution (CR), funding federal agencies at fiscal year 2017 levels until January 19. While the move frustrated many in Congress on both sides of the aisle, the leaders were unable to come to an agreement on several measures set to expire at the end of the year. Not wanting a government shutdown days before Christmas, the CR’s passage punts those decisions into the new year. Stay tuned!
W W W. N A R F E . O R G
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Washington Watch
PROTECT YOUR PAY AND BENEFITS DURING THE FY2019 BUDGET PROCESS
T
he greatest threat to your earned pay and benefits lies ahead in the fiscal year 2019 budget process. To be successful at combating possible cuts, NARFE members need to get ahead of the budget process and remind legislators that the federal community already has paid more than its fair share with $120 billion in cuts since 2011. Last year, NARFE members raised their voice to oppose threats to their earned pay and benefits during the fiscal year 2018 budget process. NARFE members’ commitment to engaging their legislators paid off and harmful threats were not included in the joint budget resolution. This year, we need all NARFE members and federal employees and retirees to answer NARFE’s call to action once again. TIMING IS KEY The timing of communications to lawmakers is critical. To be successful at combatting threats, all NARFE members are strongly encouraged to remind legislators of NARFE’s position before the annual budget process begins and continue to communicate before each step is completed. To take action, send your legislators a message using the NARFE Action Center or call NARFE’s toll-free number 866-220-0044. Let’s take a look at the budget calendar, with the understanding that delays can occur at any stage. On or before the first Monday in February, the president’s budget should be released in a message to Congress. This budget is an
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TIMETABLE OF THE BUDGET PROCESS ON OR BEFORE:
ACTION TO BE COMPLETED:
First Monday in February
President submits the budget.
February 15
Congressional Budget Office submits report to budget committees.
Not later than six weeks after the president submits the budget
Committees submit views and estimates to budget committees. (Frequently, the House Budget Committee sets own date based on Legislative Calendar.)
April 1
Senate Budget Committee reports concurrent resolution on the budget.
April 15
Congress completes action on the concurrent resolution on the budget. (This is not signed by the president.)
May 15
Annual appropriations bills may be considered in the House.
June 10
House Appropriations Committee reports last annual appropriations bill.
June 15
Congress completes action on reconciliation legislation (if required by the president).
June 30
House completes action on annual appropriation bills.
October 1
Fiscal year begins.
Source: Section 300 of the Congressional Budget Act of 1974, as amended (P.L. 93-344, 2 U.S.C. 631).
outline of the president’s policy and funding priorities. Within six weeks, the various congressional committees report their “views and estimates” to their respective budget committees, outlining how their spending and revenue proposals concur with or differ from the president’s budget. BUDGET IS BLUEPRINT Each chamber then prepares its own budget resolution by mid-April. The budget resolution sets a blueprint for the fiscal year ahead as well as spending and revenue levels for five years. Differences between the two budget
resolutions must be worked out in conference between the two chambers to pass a joint budget resolution. This is an important juncture for the federal community to take action. Budget resolutions are “concurrent resolutions” and are not signed into law by the president. The conference agreement sets the stage for the appropriations process by allocating top-line resources to the respective appropriations committees. If cuts to federal benefits are included in the president’s budget or either budget resolution, be prepared to sound the alarm. If the House or Senate budget
resolutions include harmful proposals, NARFE members need to do a full-court press, much like in 2017. Your phone calls, messages and letters to the editor will be crucial as the budget resolution is being negotiated. As threats arise, activate close relationships with legislators and staff to urge them to support the federal community. RECONCILIATION RISKS By June 15, Congress is supposed to complete action on reconciliation legislation, if required by the budget resolution. Reconciliation measures are vehicles to bring major mandatory spending and revenue programs in line with the budget resolution. The federal community is vulnerable to cuts if reconciliation instructions are sent to committees with jurisdiction
over federal pay and benefits. The reconciliation process historically has been the pathway for reductions in retirement annuities and benefits. By June 30, the House is slated to complete action on all 12 annual appropriations bills in order to give the Senate time to work before forging a common agreement on each funding bill prior to the start of the fiscal year on October 1. Legislators need to hear from the federal community at each stage of the budget process. You are strongly encouraged to take action, and ask fellow NARFE members to join you. Because the budget timeline is rarely followed, stay tuned for more calls to action. Questions? Contact leg@narfe.org.
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.
—MOLLY CHECKSFIELD, GRASSROOTS PROGRAM MANAGER
A LOOK AT THE HISTORY OF PAY PARITY
A
s of press time, federal employees were in line to receive a 1.9 percent average pay increase in 2018. This increase included a 1.4 percent across-theboard increase and an average additional increase of 0.5 percent in locality-based pay adjustment. In contrast, both the House and Senate agreed to a 2.4 percent increase for the military, which brings up a hotly debated issue: pay parity. For Feds, pay parity is the notion that federal civilian employees receive the same annual pay increase as their military counterparts. This often-debated topic has found its
way back into the spotlight for 2018 due to the difference in the proposed pay increases. There is no law that states that federal civilian and military pay increases have to be the same. However, there have been periods in the past in which pay increases have been identical. Based on data from the Congressional Research Service, civilian federal employees and military personnel received the same pay increases from the late 1980s through the 1990s. However, the onset of the new century brought change to this equivalence. In recent years, there
was a three-year pay freeze only for federal employees from 2011-2013, which also increased the disparity between public- and private-sector wages. While federal pay remained constant during those three years, military counterparts received pay increases. In 2016, former President Barack Obama increased the 2017 federal civilian pay raise to make it consistent with the military increase of 2.1 percent. Although not established in law, calls by legislators and actions by several administrators have advanced pay parity. —ROSS APTER, LEGISLATIVE ASSOCIATE
W W W. N A R F E . O R G
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Washington Watch
NARFE’S LEGISLATIVE ACCOMPLISHMENTS
F
ederal employees and retirees faced very real and serious threats to their earned pay and benefits in 2017. In response, NARFE’s legislative priority was to defeat those threatening proposals. But we also worked to advance legislative improvements
for NARFE members as the landscape allowed. Here are highlights of the association’s accomplishments thus far in the 115th Congress (2017-2018). Thwarted ALL attempts by Congress to cut the earned pay and benefits of federal employees and retirees. • President Trump’s fiscal year 2018 budget proposal called for at least $149 billion in cuts to earned retirement benefits for current and former federal employees. Specifically, the budget proposed: • Eliminating cost-of-living adjustments (COLAs) for federal retirees covered by the Federal Employees Retirement System (FERS). • Reducing COLAs by 0.5 percent each year from what they would be otherwise for federal retirees covered by the Civil Service Retirement System (CSRS). • Eliminating the FERS Annuity Supplement for new retirees. • Increasing federal employee contributions to retirement by 1 percent of pay each year for the next six years, without any corresponding benefit increase. • Basing retirement benefits for new retirees on the high-five years of salary instead of the high-three years of salary. Ultimately, none of those cuts were passed into law, thanks to the hard work of NARFE and its members.
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• The House of Representatives passed a budget resolution that would have required $32 billion in cuts to federal retirement benefits to offset, in part, the cost of a major tax overhaul. NARFE worked tirelessly to oppose the provision requiring such cuts, and it was not included in the joint budget resolution passed by the House and Senate. The budget report also endorsed policies that would have required around $163 billion in cuts, including: • Increasing retirement contributions for current federal employees. • Limiting the rate of return on the Thrift Savings Plan’s (TSP) G fund. • Limiting the government portion of Federal Employees Health Benefits (FEHB) Program premiums for retirees to inflation. • Ending the FERS Annuity Supplement. None of these provisions were passed into law. Protected postal retirees’ health benefits through the Federal Employees Health Benefits (FEHB) Program. • The House Oversight and Government Reform Committee approved postal
reform legislation, H.R. 756, that would require all current postal retirees and their spouses to enroll in Medicare or forfeit their earned retiree health benefits coverage through FEHB. • NARFE opposes the provisions and sought to amend the bill to remove them. Despite efforts to advance the bill through Congress, its progress has stalled, largely due to the Medicare provisions. Notably, a year-end push to include the bill in larger legislation failed. Helped provide more flexible withdrawal options for TSP participants, giving them more control over their own retirement savings. • The president signed the TSP Modernization Act into law, P.L. 115-84, on November 17, 2017. The law does the following: • Allows multiple, partial post-separation withdrawals, which individuals can time to their individual needs. • Permits multiple, agebased withdrawals for participants who are still working and are older than age 59-1/2, and
115TH CONGRESS NARFE’s Legislative Department wants to thank the thousands of NARFE members who answered NARFE’s call to action. •
subsequent post-separation partial withdrawals. Provides greater flexibility for those receiving periodic payments by: (i) allowing
• •
the election of quarterly or annual payments; (ii) allowing periodic withdrawals to be changed at any point during the year; (iii) allowing periodic payments to be stopped while leaving the account balance in the TSP; and (iv) permitting the purchase of an annuity or a partial withdrawal while in periodic payment status. Eliminates the withdrawal election deadline. The Federal Retirement
Thrift Investment Board, which oversees the TSP, has two years to issue regulations necessary to implement the expanded withdrawal options. NARFE’s Legislative Department wants to thank the thousands of NARFE members who answered NARFE’s call to action. Your advocacy brought NARFE’s legislative priorities to the attention of legislators and staff and helped make these accomplishments possible.
Contribute To NARFE-PAC I want to make a monthly sustainer credit card contribution:
q $25/month
OR
I want to make a one-time contribution: q $250 – Gold lapel pin and blanket q $100 – Silver lapel pin
q $10/month q Other: ______/month ($10 minimum) Sustainers receive a Sustainer lapel pin and cozy fleece NARFE blanket.
q $50 – Bronze lapel pin q $25 – Basic lapel pin q Other: _________
q Please do not send any gifts for my contribution (This saves NARFE-PAC money!) NARFE Member #: _________________________________________ Name: __________________________________________________ Address: ________________________________________________ City: _________________________________________________ State: ___________
ZIP: _______________
Only members of the National Active and Retired Federal Employees Association may contribute to NARFE-PAC. NARFE will neither favor nor disadvantage anyone based on the amount of a contribution or the failure to make a voluntary contribution to this political action fund. NARFE-PAC contributions are not deductible for federal income tax purposes.
q Charge my credit card (required for monthly contribution) q MasterCard
q VISA
q Discover
q AMEX
Card #: ________________________________________________ Exp. Date: _____ /_________ mm
yyyy
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Or mail check payable to NARFE-PAC to: NARFE Attn. Budget & Finance 606 North Washington St. | Alexandria, VA 22314 W W W. N A R F E . O R G
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Washington Watch
narfe bill tracker
THE NARFE BILL TRACKER IS YOUR MONTHLY GUIDE TO THE CONGRESSIONAL LEGISLATION THAT NARFE IS FOLLOWING. CHECK BACK EACH ISSUE FOR UPDATES. ISSUE
BILL NUMBER / NAME / SPONSOR
WHAT BILL WOULD DO
H.R. 756: Postal Service Reform Act of 2017 / Rep. Jason Chaffetz, R-UT Cosponsors: 9 (D), 7 (R)
Requires postal retirees to enroll in Medicare in order to continue receiving their current federal health insurance coverage. Enrollment would be automatic.
Approved by the House Committee on Oversight and Government Reform; pending in two other committees narfe, June 2017
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: 179 (D), 63 (R)
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 U.S. 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
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 customers.
Referred to the House Committee on Oversight and Government Reform
H.R. 757 / S. 255: The Federal Adjustment of Income Rates (FAIR) Act / Rep. Gerald E. Connolly, D-VA Cosponsors (H.R. 757): 69 (D), 1 (R) Cosponsors (S. 255): 7 (D), 0 (R)
Provides for a 2 percent pay raise for federal employees and 1.2 percent increase in locality pay in 2018.
Referred to the House Committee on Oversight and Government Reform (H.R. 757) and the Senate Committee on Homeland Security and Governmental Affairs narfe, April 2017
H.R. 3269: Federal Employee Pension Fairness Act of 2017 / Rep. Anthony G. Brown, D-MD Cosponsors: 26 (D), 0 (R)
Repeals laws passed in 2012 and 2013 that increased the Federal Employees Retirement System (FERS) contributions for newly hired federal employees.
Referred to the House Committees on Oversight and Government Reform and Foreign Affairs narfe, October 2017
H.R. 1022: Federal Employees Paid Parental Leave Act of 2017 / Rep. Carolyn Maloney, D-NY Cosponsors: 74 (D), 1 (R)
Provides federal employees with 6 weeks of paid leave in connection with the birth or adoption of a child.
Referred to the House Committees on Oversight and Government Reform and House Administration
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 Cosponsors: 161 (D), 45 (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 Cosponsors: 184 (D), 57 (R)
FEDERAL COMPENSATION
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NARFE’s Position:
Support
LATEST ACTION(S)
Oppose
No position
EDITOR’S NOTE: These bills are all listed online at www.narfe.org/legislation/votervoice.cfm.
ISSUE
DC STATEHOOD
TAXES
COLA
GPO/WEP
CAMPAIGN FINANCE
BILL NUMBER / NAME / SPONSOR
WHAT BILL WOULD DO
LATEST ACTION(S)
H.R. 1291 / S. 1278: Washington, D.C. Admission Act / Del. Eleanor Holmes Norton, D-DC Cosponsors: (H.R. 1291) : 141 (D), 0 (R) Cosponsors: (S. 1278) 19 (D), 1 (I)
Sets forth procedures that would allow the District of Columbia to become a state known as the State of Washington, DC.
H.R. 2929: Federal Employee Combat Zone Tax Parity Act / Rep. Rob Wittman, R-VA Cosponsors: 7 (D), 2 (R)
Extends the tax credit available Referred to the to military personnel who serve House Committee on in combat zones to civilian Ways and Means federal employees. narfe, September 2017
H.R. 3200: The TaxpayerFunded Pension Disclosure Act / Rep. Ron DeSantis, R-FL Cosponsors: 0 (D), 7 (R)
The legislation would allow for public disclosure of federal pension data, including: name of annuitant, last agency of employment, grade, monthly annuity and total annuity contributions.
Referred to the House Committee on Oversight and Government Reform narfe, October 2017
H.R. 1251: CPI-E Act of 2017/ Requires Social Security and Rep. John Garamendi, D-CA many federal retirement programs to use the Consumer Price Index for the elderly Cosponsors: 44 (D), 1 (R) (CPI-E) to calculate cost-ofliving adjustments (COLAs) to retirement benefits.
Referred to the House Committees on Ways and Means, Veterans’ Affairs, Oversight and Government Reform, and Armed Services narfe, May 2017
H.R. 1205 / S. 915: Social Security Fairness Act of 2017 / Rep. Rodney Davis, R-IL Cosponsors (H.R. 1205): 120 (D), 44 (R) Cosponsors (S. 915): 10 (D), 4 (R), 1 (I)
Repeals both the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP).
Referred to the House Committee on Ways and Means (H.R. 1205), and the Senate Committee on Finance (S. 915) narfe, May 2017
H.R. 20: The Government By the People Act of 2017 / Rep. John Sarbanes, D-MD
Reforms campaign finance Referred to three laws to put small donors on par House committees with wealthier donors. Provides a tax credit or contributions and government matching contributions.
Cosponsors: 156 (D), 1 (R)
Referred to the House Committee on Oversight and Government Reform, and Committee on Rules
The Access to Insurance for All Americans Act, H.R. 1408, has been removed from the tracker. The legislation has failed to garner any cosponsors and is unlikely to be considered by the House of Representatives. 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 Institute staff. NARFE does not provide legal, financial planning or tax advice or assistance.
EMPLOYEES SERVICE COMPUTATION DATE
Q
As a federal employee, can I use the Service Computation Date (SCD) that is reflected on my Statement of Earnings and Leave (SEL) when calculating the length of service that will be used in the computing of my future annuity from the Office of Personnel Management (OPM)? This SCD matches up with the one on my SF-50, “Notification of Personnel Action,” in my Official Personnel Folder (OPF).
A
Keep in mind that your agency uses different SCDs to compute length of service for different purposes. The SCDs on your SEL and your SF-50 are leave SCDs, which are used by your agency payroll office to determine whether you are accruing four, six or eight hours of annual leave per pay period. Retirement SCDs are used for computing length of service for retirement eligibility and computation purposes. The rules that govern retirement SCDs are not the same as the 16
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rules that govern leave SCDs. For this reason, retirement SCDs are sometimes different than leave SCDs. For retirement planning purposes, it is recommended that you contact your agency retirement office to confirm your retirement SCD. If it is different from your leave SCD, ask them to explain.
RETIRING BY AGE 50
Q
As a special group employee (younger than age 50), if I complete my
20 years of special group service and transfer to a non-special group position covered under the regular Federal Employees Retirement System (FERS), will I still be able to retire from federal service when I reach age 50 (without returning to a special group position)? Secondly, what if I had 25 years of special group service before transferring to a non-special group position? Thirdly, if I make this transition, will I also be allowed to continue federal service beyond my mandatory retirement age of 57? And if so, if I continued non-special group service under FERS and separated on/after my 62nd birthday, how would my annuity be calculated?
A
Yes to your first question. For your second question, with 25+ years of special group service, you could separate at any age (younger than 50, if desired).
Yes to the third question. For the last question: 1.7 percent factor x 20 = 34 percent for the first 20 years of special group service and 1.1 percent x remaining years and months of creditable federal service (both special group beyond 20 years and non-special group service). Add the two percentages to determine the total percentage, then multiply the total percentage by your high-three years average salary to compute the annual amount of your unreduced pension.
DIVORCE AND WIDOWER BENEFITS
Q
I’m divorced after 15 years of marriage, never remarried and still working as a federal employee under the Civil Service Retirement System (CSRS). I’m approaching my normal retirement age of 66 for Social Security. My former spouse remarried, but died several years after our divorce. I recently heard that I might be entitled to a widower benefit from Social Security based on her work record even though she passed away after we divorced. Is this true? Because I’m a CSRS employee and affected by the Government Pension Offset (GPO), will I be able to collect the widower benefit from Social Security?
A
Even though you are still working, once you reach your full retirement age (sometimes called your normal retirement age) for Social Security, the earnings test
that typically prevent workers from claiming Social Security at a younger age no longer applies. Although your former spouse died years after your divorce, you are potentially eligible for a widower benefit based on her Social Security work record because you were married to her for more than 10 years and you didn’t remarry before the age of 60, even though she did. Keep in mind that you will not be subject to the GPO until you retire from federal service under CSRS. While you continue your federal career beyond age 66, feel free to collect 100 percent of the widower benefit she earned for you. However, once you retire from federal service, be prepared for the GPO to significantly reduce your widower benefit from Social Security. In most cases, your widower benefit will probably be reduced to $0, and the only benefit you would expect from Social Security once you’re retired under CSRS is any Social Security you may have earned based on your own work record (subject to the Windfall Elimination Provision – WEP). Collect what you can while you can.
HIGH-THREE YEARS AVERAGE SALARY
Q
I'm a special group employee and receive LEAP (Law Enforcement Availability Pay) or AUO (Administratively Uncontrolled Overtime), which has a nice impact on the high-three years average salary that the Office of Person-
nel Management (OPM) will use when computing my annuity. If I transfer to a non-special group position and lose LEAP or AUO, how would this affect my highthree average salary?
A
Your high-three years average salary can never decrease. In other words, if you take a lower-paying federal job and never return to the salary levels you previously reached as a special group employee, your high-three years average salary would be what it was before transferring to the non-special group position.
FERS-RAE AND LEAVING FEDERAL SERVICE
Q
I never had any federal service (civilian or military) until I was hired as a federal employee in November 2013 under the Federal Employees Retirement System-Revised Annuity Employee (FERS-RAE). I'm currently looking at a private-sector job opportunity and I might leave federal service before I'm vested with five years under FERS-RAE. What should I consider before I leave?
A
There is much to consider but this answer will stay within the realm of your federal pension. If it's not too much of a strain on your career opportunity, you may want to consider leaving after you get your five years of FERS-RAE service under your belt. Once you're vested under FERS-RAE, as long as you don't take a refund of the contributions you paid into FERS W W W. N A R F E . O R G
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Questions & Answers
upon separation, you would have a deferred annuity waiting for you at age 62. Also, if you decide to return to a retirement-covered position with the federal government before age 62, you would return to your FERS-RAE vested retirement coverage. Otherwise, if you leave before you're vested
under FERS-RAE and return to a retirement-covered position later, you would be given FERS-Further Revised Annuity Employees (FRAE) coverage and would be required to contribute more of your basic pay to earn service credit toward the same annuity. Also consider reading
the article in the January 2018 issue of narfe magazine (p. 34) in regards to separation from federal service to continue a career in the private sector. Contact the NARFE Federal Benefits Institute to discuss how leaving federal service midcareer might affect other federal benefits.
Focus on Federal Benefits HOW IS YOUR ANNUITY FUNDED? The Civil Service Retirement and Disability Fund (CSRDF) is the bucket of money that the Office of Personnel Management (OPM) uses to pay federal civilian pensions for those under the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS). OPM also uses this fund to pay monthly survivor benefit payments to eligible widows/ widowers and/or children. Federal employees who have retirement-covered positions have a mandatory percentage of their basic pay contributed to the CSRDF each pay period. The agency also makes a mandatory contribution into the CSRDF on the employee’s behalf each pay period. The amounts of these employee/agency contributions depend on the employee’s retirement coverage (i.e., CSRS, FERS, special group, etc.). The CSRDF is similar to Social Security because by law, 100 percent of its assets must be invested in special issue U.S. Treasury Bonds or other bonds backed by the full faith and credit of the United States government.
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When the trust fund needs cash to pay retirement benefits, it redeems the bonds and the Treasury disburses an equivalent dollar value of the payments to retired annuitants. Take a look at your Statement of Earnings and Leave (SEL) to review the employee/agency contributions each pay period and talk to your agency HR staff if you have any questions.
FERS-RAE
Congress passed a law, effective January 1, 2013, that requires new hires to pay more to get the same annuity, therefore allowing the federal government (i.e., the federal employee’s agency) to simultaneously back off on its share of the contribution into the CSRDF. FERS-RAE (Revised Annuity Employees) is a version of FERS for new employees hired in 2013 (or rehired in 2013 with less than five years of creditable or potentially creditable federal civilian service). FERS-RAE employees must pay more to get the same annuity as regular FERS employees. Instead of contributing .8
percent of their basic pay into FERS, FERS-RAE employees contribute 3.1 percent of their basic pay. FERS-RAE special group employees (i.e., law enforcement, firefighter, etc.) must contribute 3.6 percent.
FERS-FRAE
Effective January 1, 2014, Congress again increased the mandatory contribution to FERS, thus allowing the federal government (i.e., the federal employee’s agency) to back off even more on its share of the contribution into the CSRDF. FERS-FRAE (Further Revised Annuity Employees) is a version of FERS for new employees first hired after 2013 (or rehired after 2013 with less than five years of creditable or potentially creditable federal civilian service). FERS-FRAE employees must pay more to get the same annuity as regular FERS or FERSRAE employees. FERS-FRAE employees contribute 4.4 percent of their basic pay. FERS-FRAE special group employees must contribute 4.9 percent.
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Questions & Answers
RETIREES COMMUNICATING, GETTING INFORMATION FROM OPM
Q
As a federal annuitant, what are some of the best ways to obtain information or communicate with the Office of Personnel Management (OPM)?
A
It depends on the information you’re looking for and what you are trying to communicate. There is a lot of information about your retirement and certain changes you can make by using OPM’s Retirement
Services Online (RSO) at www. servicesonline.opm.gov. For annuitants who use the internet, this can be one of the best ways to obtain information or make certain changes with your retirement. However, until OPM expands the features of this online tool, there are certain things you cannot change or obtain using the RSO. Once you have your Civil Service Annuitant (CSA) number, you also can communicate with OPM’s Retirement Operations Center (ROC) by email at retire@ opm.gov. Be sure to include your CSA number with any communication you have with OPM. Never send your Social Security
number (SSN) via email. If you need to communicate with OPM using any document that includes your SSN, it’s best to use regular certified mail. In order to ensure proper handling of your information by regular certified mail, OPM recommends that you include your name, CSA number (or CSF number for survivor annuitants), current address, social security number, date of birth and a contact phone number. State what you are requesting and provide any documentation, if needed. The mailing address is: Office of Personnel Management, P.O. Box 45, Boyers, PA 16017.
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Questions & Answers
You could call OPM, but their phone lines are usually quite busy and wait times can be long. If you call OPM, it’s recommended that you call early and prepare to be on hold for a while. Call 888-7676738 or TTY: 855-887-4957 from 7:40 a.m. to 5 p.m. ET.
FERS SUPPLEMENT AND COLA
Q A
Does the FERS Annuity Supplement receive a cost-of-living adjustment (COLA)?
No. The FERS Annuity Supplement, payable to some retirees, does not
receive a COLA. However, the FERS spousal retirement annuity supplement, payable to a surviving spouse of a deceased annuitant, does receive a COLA.
FERS SPOUSAL SUPPLEMENT
Q A
I am a widower, age 56. Am I eligible for the FERS Spousal Supplement?
If a married FERS annuitant, who previously elected a spousal survivor benefit dies, and if the surviving spouse is not old enough for
widow/widower benefits from Social Security, the FERS Spousal Supplement is additional money payable from the Office of Personnel Management (OPM) to help bridge the gap until the surviving spouse reaches age 60 and qualifies for widow/widower benefits from Social Security. Although the regular survivor benefit elected may continue for the life of the surviving spouse, the FERS Spousal Supplement is only payable until age 60, regardless of whether or not the surviving spouse actually claims the widow/widower benefit from Social Security.
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To obtain an answer to a federal benefits question, NARFE members should call 800-456-8410 and select option 2 for the Federal Benefits Institute; send the question by postal mail to NARFE Headquarters, ATTN: Federal Benefits; or submit it by email to fedbenefits@narfe.org.
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What’s YOUR Best Retirement Date? Social Security and Feds: What You Need to Know
April 26
TSP: Maximizing Your Retirement Savings
May 24
How Much Do YOU Need for a Secure Retirement?
Not a member? Join NARFE today to access all NARFE Federal Benefits Institute resources and events: www.NARFE.org/Join
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NARFE Federal Benefits Institute www.NARFE.org/Institute 24
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Cover Story
CYBER-AWARENESS FOR THE FEDERAL COMMUNITY If you don’t know much about cybersecurity, you’re not alone. Here’s how to protect your data. By David Tobenkin
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In 2015, the Office of Personnel Management (OPM) announced two separate but related cybersecurity incidents involving personnel and background investigation records that affected the data of approximately 22.1 million federal government employees, contractors and others. In 2013, all of Yahoo’s users (around 3 billion) were subjected to data breaches. In May through July 2017, 143 million American consumers were subjected to a data breach of credit reporting agency Equifax. Cybersecurity data breaches have reached the point where only a very small percentage of the population can say they have not been affected by one. W W W. N A R F E . O R G
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“There is probably no one with a credit card and a Social Security number who has been engaging in the economy in a meaningful way whose information has not been breached,” says Josephine Wolff, a professor of public policy and computing security at the Rochester Institute of Technology in Rochester, NY. She has had her personal information stolen from companies more than once. Responding to past and potential future breaches is a challenge faced by everyone. Unfortunately, Internet users are asked to take an increasing number of steps to protect themselves and there is not always a great deal of clarity, given the rapid race between cyber attackers and cybersecurity experts who try to keep the public safe. This article will examine approaches to keeping cybersecurity protection and reaction steps by individuals manageable. These approaches are directed at non-federal workplace activities and systems, given that federal employment-related cybersecurity activities are governed by precise federal agency requirements that must be followed.
SIZING UP THE CHALLENGE “I think that all these breaches mean two things going forward,” Wolff says. “First, don’t panic and overreact. Even with so many people being breached so many times, it is not productive to stop using online services or credit cards. The other extreme, not doing anything about it, is often not the right response either because there are reasonable things that can and should be done to reduce the risks. The key is finding a balance and not letting this take over your life.” A good example is the Yahoo breach, Wolff says. While some data breaches identify which personal information has been breached, Wolff says the general rule of thumb is to assume that nearly all personal information that a company says might have been breached was stolen. The key to responding to the Yahoo breach, she says, is to change Yahoo account passwords and make sure that, if you used that same password for any other accounts, to change those passwords as well. That 28
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is a relatively manageable and measured response to many similar types of cyber breaches. Cybersecurity threats differ and have changed over time. A first generation of breaches in 20062008 sought credit cards numbers. With the advent of increased credit card protection offered and other anti-fraud steps by credit card companies, the target evolved to become Social Security numbers and other key personal information along with medical records. This information was used to facilitate identity theft to set up phony credit card accounts, loans, tax returns and phony health insurance claims. Some breaches, possibly including the OPM breaches, appear to have been perpetrated by state-sponsored actors interested in accessing sensitive government information for espionage and potential blackmail value. The latest generation of threats is ransom-ware, in which malicious code is inserted into victims’ computers to lock them up and require them to pay for code to access their computers and their contents, such as the 2016 and 2017 Petya and WannaCry ransomware incidents.
“
The key is finding a balance and not letting this take over your life.” — JOSEPHINE WOLFF
Different types of threats mean different strategies should be employed to respond, Wolff says. For credit card protection, swift reporting to credit card companies and use of new credit card numbers may be key. For more general identity theft actions, blocking perpetrators from exploiting stolen information by proactively freezing credit and pre-empting their potentially harmful actions, such as by filing for federal tax returns electronically before they do, may help. For ransom-ware threats, the best general cybersecurity step may be to back up key files as soon as possible, thereby limiting the harm caused by lack of access to such information. People who suspect they are a victim of a federal crime can submit a complaint or contact their local
FBI field office, and cybercrime can be reported directly to www.IC3.gov online. In addition to cybersecurity information available on OPM’s Cybersecurity Resource Center website (www.opm.gov/cybersecurity) and from employees’ home agencies, the Federal Trade Commission (FTC) maintains extensive guidance on its website regarding cybersecurity best practices. A good place to start is the following website location: www.consumer.ftc.gov/topics/privacy-identityonline-security. In addition, the U.S. Department of Homeland Security’s United States Computer Emergency Readiness Team also provides information and tips on cybersecurity issues at these locations: www.us-cert.gov/ncas and www.us-cert.gov/ security-publications.
DISCONNECTING FROM THE E-WORLD While minimizing participation in the electronic economy, such as banking in person at a branch rather than online, might seem like a way of reducing potential harm, Wolff disagrees. “I’m an advocate of people taking action to gain control of their electronic presences, particularly for key financial relationships, like those with banks,” Wolff says. “If you do not set up your online bank account or your online IRS account, there is the danger that someone else will gain control of them and exploit them and you will not be aware.”
“
I’m an advocate of people taking action to gain control of their electronic presence...” — JOSEPHINE WOLFF
of the FTC’s identity theft program. Heightened efforts may include taking time to create more challenging passwords, monitoring and changing them more often and monitoring activity in such accounts more closely. Such efforts are far beyond what is needed for an online presence for more basic and less sensitive services, such as magazine subscriptions or transactions with the local flower shop. Monitoring communications from financial services or key agencies like the IRS closely and on a timely basis also is important since such communications may relate to detection of fraud and recommended responses. Another important step is visiting these agency and organization websites. Many offer agency- or organization-specific cybersecurity tips, guidance on how to confirm that information purporting to be from them actually is from them, and guidance on how to securely use online services that they provide. The Thrift Savings Plan, for example, provides extensive guidance on security measures that the agency employs and offers suggestions for users at www.tsp.gov/sitehelp/content/security/ index.html and Social Security online account security information is available at www.ssa.gov/myaccount/verifyandprotectid.html.
PRIORITIZING EFFORTS A key aspect of keeping consumer cybersecurity efforts manageable is to prioritize efforts on the most important websites, relationships and actions. An obvious one is key financial relationships, such as those with banks and government agencies (particularly those providing data or benefits for annuitants). Also among the highest priority accounts to focus on are email accounts because email accounts link to many other accounts, including sensitive financial accounts, notes John Krebs, manager W W W. N A R F E . O R G
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CREDIT ACCESS AND MONITORING Wolff notes that one of the most powerful cyberdefense weapons of consumers is use of a credit freeze to restrict access to credit reports, making it more difficult for identity thieves to open new accounts in their names, as most creditors need to see credit reports before they approve a new account. Whether this makes sense for a given individual may depend upon how burdensome a freeze will become, Wolff notes. For many consumers who need access to credit only occasionally, locking and unlocking such credit reports may be practical step but not so for those who use credit more frequently, such as business owners. A somewhat less severe step is placing a fraud alert on your files. A fraud alert warns creditors that you may be an identity theft victim and that they should verify that anyone seeking credit in your name really is you. The FTC urges consumers to check annual credit reports from the three credit monitoring agencies, Equifax, Experian and TransUnion, for free by visiting annualcreditreport.com. The agency notes that any accounts or activity that you don’t recognize could indicate identity theft and recommends visiting the FTC’s IdentityTheft. gov to find out what to do. The FTC says consumers also should monitor existing credit card and bank accounts closely for charges they don’t recognize. The FTC also offers tips on use of identity theft protection at www.consumer.ftc.gov/ articles/0235-identity-theft-protection-services. Federal employees should take advantage of protections offered to victims of the OPM data breach. In 2016, Congress extended identity theft protection for those affected to 10 years, through fiscal year 2026. There is no deadline to enroll within that period. Protection includes identity monitoring, credit monitoring, identity restoration service and identity theft insurance. OPM and its cybersecurity contractors provided information on the types of information compromised, protections offered and steps that should be taken by those affected. The FTC also 30
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provided information on steps to take depending on the types of information that were compromised: www.consumer.ftc.gov/blog/2015/06/ opm-data-breach-what-should-you-do. Those who have actually suffered identity theft should go to www.identitytheft.gov and file an identity theft complaint with the FTC. Identity theft victims receive a customized recovery plan that includes step-by-step guidance. In addition, individuals can learn more about steps to take if their information is lost or stolen at www.identitytheft.gov/Info-Lost-or-Stolen.
PASSWORDS In June, the federal National Institute of Standards and Technology (NIST) released new guidelines for digital identity guidelines that supplanted previous advice on passwords and identity protection (https://pages.nist.gov/800-63-3/sp800-63-3.html). Many of the new guidelines relate to the fact that past organizational efforts to improve security by demanding more difficult and more frequently changed passwords may actually have reduced security. People prompted to change their passwords frequently tend to make only small changes to them and those that rely on composition rules like use of special characters and upper- and lowercase letters tend to make passwords harder to remember.
An important criterion in the safety of passwords is often their length, rather than their complexity, with the longer the better. — NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY
Wolff and the NIST document say an important criterion in the safety of passwords is often their length, rather than their complexity, with the longer the better. The FTC states that a password with a minimum of 10-12 characters and a mix of letters, symbols and numbers is harder to hack. To generate a longer password, the FTC recommends using a passphrase, such as one based on the rock band KISS’s anthem: “I want to rock and roll all night and party every day.” Better yet, it states, is layering in mandatory numbers, symbols or cases, making “iW2r+ran+ped!” How can the legion of passwords be remembered in a safe manner? One strategy is to secure a master list of passwords and take extreme steps to protect it, such as a heightened password to unlock a list for the others. Another is to use a password manager computer application that stores key information online with encryption protection, such as services offered by the Dashlane and 1Password password managers. These services can facilitate storage and use of more complex passwords, since they can be entered and recalled securely. Wolff says although these managers have value, the compromise or loss of access to that one key password or the data stored could create significant risks for users. Increasingly, two-factor identification procedures are becoming the gold standard for protection. This includes a password sent by the user as well as a separate password or code sent by the provider or that is generated by a fob or key. “I use twofactor identification for my high-value accounts,” Wolff says. For key online accounts, users may wish to ask whether two-factor identification is possible. The Social Security Administration in June 2017 began requiring my Social Security online account holders to use two-factor authentication to access their accounts.
WHO CAN YOU TRUST? Phishing schemes designed to lure information out of the unwary and use them for identity theft and access to financial resources are growing
increasingly sophisticated. Such schemes may mine information about you to target efforts to get you to give them passwords or other key information, relying upon information that may have come from earlier breaches.
“
The most important thing is don’t ever click on links in emails and then put in passwords or other sensitive information in the pages to which you are directed.” — JOSEPHINE WOLFF
“The most important thing is don’t ever click on links in emails and then put in passwords or other sensitive information in the pages to which you are directed,” Wolff notes. “Very few reputable organizations seek information from you that way. Go directly to the website of the company and sign in there to see if the message is valid.” The use of higher quality browsers can also facilitate more security features (see the TSP website at https://www.tsp.gov/sitehelp/content/ browser/index.html). The TSP notes, for example, that if users using high-quality browsers visit their website and attempt to access their accounts using a high-security browser, the color green will appear in one of several forms on the screen, which TSP says is a “a sure indication that you are NOT on a bogus TSP website.” See www.tsp.gov/sitehelp/content/security/bewareOfPhishing.html.
SECURE ENVIRONMENTS AND SYSTEMS There are some obvious steps to maintain secure internet environments. The FTC advises to keep your software – including your operating system, the web browsers you use to connect to the interW W W. N A R F E . O R G
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net, and your applications – up-to-date to protect against the latest threats. Most software can update automatically, so set yours to do so. The FTC notes that personal information should only be provided over encrypted websites. To determine if a website is encrypted, look for “https” at the beginning of the web address. That means the site is secure. If you plan to communicate wirelessly at home, the FTC recommends using encryption on your router, which scrambles the information you send into a code so that it’s not accessible to others. Some types of encryption are stronger than others and it is often necessary to turn the encryption function “on” with routers. More information is available at www.ftc. gov/tips-advice/business-center/guidance/ small-business-computer-security-basics.
external hard drive backup,” Wolff says. “If your house floods, you still have the cloud backup and if something happens with the cloud, such as the bankruptcy of the provider, you are protected through the external hard drives.” With all such cases and devices it is important to monitor the location, accessibility and security of data over time. Wolff notes that someone who stored their data on the prevalent storage device of 30 years ago, floppy disks, and put them in a vault would have a hard time today finding devices able to read them. Printing out key files for a smaller collection of key data can provide an additional, third check.
“
I like having both a cloud and external hard drive backup.” — JOSEPHINE WOLFF
KEEPING DATA FOR THE LONG HAUL Keeping a backup of data is a key cybersecurity step. However, it’s not easy to keep data secure for very long, given the combined risks of physical destruction, loss through moves, forgetting where it is, and the depredations of young children, pets and contractors in a residence. While a debate rages over whether storing information on the cloud (e.g., use of the internet to provide storage and services through a network of servers), on external hard drives or other portable physical storage devices is best, the answer may be all of the above. “I like having both a cloud and
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Some readers may continually ask whether the cybersecurity efforts described in this article are worth the effort. Wolff says that even if users do not care about the potential for harm to themselves, they should take cybersecurity action in the interests of society as a whole. “Taking cybersecurity steps really is a civic duty,” Wolff says. “One example is botnets, in which people’s computers are hijacked and used for malevolent actions by perpetrators. Everyone should want to prevent that even if they themselves are not the direct target.” —DAVID TOBENKIN IS A FREELANCE WRITER BASED IN THE GREATER WASHINGTON, DC, AREA.
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Ebb Tide
When a Loved One Lacks Capacity to Manage Federal Benefits By Marc S. Levine, Esq.
One of the hardest things to do is help a loved one – spouse, partner, parent, sibling or friend – adjust to the loss or diminishment of capacity. Just admitting that we could ever be faced with losing our own ability to make decisions is difficult to grasp. Sometimes loss of capacity happens like a lightning bolt. Other times it is a slow, imperceptible and inexorable process.
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A year ago, I wrote an article about estate planning for federal employees that talked about how having a power of attorney and a health care directive are vital and integral parts of being prepared for incapacity – perhaps the most important part of estate planning. Without comprehensive planning, including one or more powers of attorney and a health care directive, taking care of a loved one can become an endless run through a maze of courts, banks and a vast array of state and government agencies, all doubting that you have the right to speak for the incapacitated person. A power of attorney (POA) puts you firmly in control of as much of a person’s legal and financial life as possible, putting you in the right position to be given control over the aspects of their life that a POA, or a court order, cannot control. With a comprehensive POA, you – not the court or an attorney – can have control over investments, bank accounts, assets and financial parts of your loved one’s life. You also have control of your loved one’s legal life, letting you deal with IRS, title companies and government benefits. Even in the instances where a POA does not control, being the agent under the POA and being the health care agent, puts you in the best possible position to be appointed as the representative to deal with other benefits. Without a POA and health care directive, you must pay an attorney to act in your loved one’s interests or go through an entire court proceeding before being able to help. The best way to be prepared is to plan, sign the documents and collect the forms ahead of time. It can be difficult to broach the subject at a time when a loved one is just dealing with a diagnosis of dementia or Alzheimer’s disease. As an estate planing attorney, I have seen time and again that when clients have open and frank conversations about their future and sometimes present needs, the burden on the family is reduced. What do you do once you realize that your loved one needs help, and needs you to be able to help them? Our focus here is on how you can interact on your loved one’s behalf in regard to a number of federal employee benefits, as well as some general 36
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federal benefits, and discuss what gives you power to help when your loved one is no longer competent to do it for themselves.
Federal Employee Benefits Retirement Annuity
We are going to start with the benefit every federal employee has – their annuity. The rules regarding the impact of incapacity on the Civil Service Retirement System (CSRS) and Federal Employees Retirement System (FERS) are the same. Whoever is named as the CSRS/FERS beneficiary will stay the beneficiary once the employee is incapacitated, because CSRS/FERS treats the right to designate a beneficiary of these plans as a personal right that can be exercised only by the employee, former employee or retiree. No one else, regardless of their status (POA, spouse, court-appointed guardian) may designate a beneficiary for the employee. The real issue for someone caring for an incapacitated loved one is usually not the beneficiary designation, but day-to-day dealings. While the Office of Personnel Management (OPM) will follow the instructions of a court-appointed fiduciary (usually called a guardian or conservator), they will not follow the instructions of a spouse, loved one or even an agent under a valid POA. OPM clearly states that “OPM does not recognize power of attorney filings.” Instead, OPM requires that person to apply to become the representative of the retired employee to receive and control the payments. The process for appointing the representative payee (RP) begins with completing Form RI 20-7, “Representative Payee Application.” Once appointed, the RP is responsible for acting for the benefit of the employee or retiree by using the payments for the best interest of the beneficiary, authorizing the correct withholding of federal income tax from the annuity, and selecting the federally sponsored health benefit coverage for the annuitant, when applicable. The RP will have to account for use of the funds, the conversion and use of excess funds and be responsible for payments which may be received after the annuitant dies.
Federal Employees’ Group Life Insurance
An important, but underused, benefit under the Federal Employees’ Group Life Insurance (FEGLI) is the option for the Living Benefit. A Living Benefit is a lump-sum payment to a terminally ill employee or retiree who has a documented medical prognosis with a life expectancy of no more than nine months. On a number of occasions, individuals who were cash-poor were able to use this benefit to make things much easier for themselves and their family in their final months. Employees can choose a full or partial Living Benefit. Annuitants can elect only a full Living Benefit. The Living Benefit is equal to the Basic Life insurance amount, plus any extra benefit for persons under age 45. The form, which is not available online, can be obtained through the Office of Federal Employees’ Group Life Insurance (OFEGLI).
What do you do once you realize that your loved one needs help, and needs you to be able to help them? How do you apply for this on behalf of your loved one? Someone other than the employee/ retiree can apply only if, among other things, their physician certifies they are physically or mentally incapable of making an election and they have a POA or a court order authorizing them to elect the Living Benefit. Unlike the Living Benefit, an agent under your POA may not sign your death benefit designation form. One way to work around OPM’s unwillingness to allow an agent under a POA to change beneficiary designations is by assigning the FEGLI ownership to a revocable living trust. A revocable
living trust is a trust created by the employee or retiree while they are alive and competent to control the trust and ownership of the policy. If the employee or retiree is no longer competent, then the successor trustee takes over. Because the FEGLI benefit is now owned by the revocable trust, the new trustee can make necessary changes to the FEGLI account. Note that the Living Benefit may not be available once the assignment is made unless the FEGLI benefit is assigned back to the employee or retiree.
Thrift Savings Plan
Usually the most liquid part of an employee’s or retiree’s assets, the Thrift Savings Plan (TSP) is vital to the person trying to pay for, or manage, their loved one’s new situation. For many federal employees or retirees, it is vital they have someone who can access this asset as they become incapacitated. A TSP participant may use a POA to authorize someone to act on their behalf with the TSP. Unlike OPM and other government agencies, the TSP allows leeway in using a POA. The easiest way to invoke a POA is to use the TSP Form OC 01-10, “Special Power of Attorney.” When that form is fully utilized, the agent can make a withdrawal, take a TSP loan or change a beneficiary designation, but only on behalf of and for the benefit of the participant. The form specifically allows the agent under the TSP Special Power of Attorney to obtain information, borrow or withdraw funds, or take any other actions relating to the TSP account. Some of my clients have concerns about giving broad and immediate powers to one person. The TSP allows you to use a different form so that the powers vested in the TSP Special Power of Attorney are incorporated in the more customized powers of attorney that we help our clients prepare. Clients can then limit the power of the agent, appoint a backup agent(s) and specify that power over the TSP can become effective only after a specific event has occurred, such as incapacity, which is known as a “springing POA.” The TSP’s pamphlet on “Court Orders and Powers of Attorney” (available at www.tsp.gov/PDF/formspubs/tspbk11.pdf) states that a springing POA is W W W. N A R F E . O R G
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allowed as long as it is submitted with evidence that the event it describes has already occurred. The TSP also is very specific on how a court appointed guardian is allowed to act on the behalf of the participant. It is important to confirm that any court order appointing the guardian or conservator grants broad powers to cover all actions related to the TSP.
Unpaid Compensation and Accrued Leave
Your unpaid compensation (i.e., last paycheck) and accrued leave is usually due at your death. As noted above, OPM does not recognize a valid POA, so someone will need to be appointed as your RP to deal with any issues related to these benefits.
time to create a POA and/or revocable trust can be essential... Taking the
(RP). The RP for the SSA is very similar to the representative for OPM. How does the SSA determine a RP is needed? Generally, the SSA presumes that an adult is capable of managing his or her own benefits. If the SSA receives information that they are not, then the SSA will begin to gather evidence to determine if a RP needs to be appointed. In order to be considered as the RP for your loved one, even your spouse, you must complete form SSA-11, “Request to be Selected Payee.” The SSA-11 is a detailed form requiring personal information about you, your loved one, their incapacity and their living arrangements. In almost all cases, SSA will require that the payee application be completed face-to-face at a SSA office and not through mail or email. The SSA determines the duties and responsibilities of the RP, which can include but are not limited to: reporting changes which could affect the beneficiary’s eligibility for benefits, saving money left over in an interest-bearing account for the beneficiary’s future needs, completing written reports and accounting for use of funds. Once you are named as a RP, the SSA Frequently Asked Questions page (www.ssa.gov/payee/faqrep.htm) is a vital and important day-to-day resource on how you are required to act.
Medicare
General Federal Benefits
Although there are limitations in the way a POA or court guardianship can be used to control these benefits, taking the time to create a POA and/or a revocable trust can be essential to setting up the person who will be able to apply to the government to coordinate all of these issues.
Social Security Benefits
The hard truth is that the Social Security Administration (SSA) and the Treasury Department do not recognize POAs for negotiating federal payments. If you have a POA for someone who is incapable of managing his or her own benefits, you must still apply to serve as his or her representative payee 38
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Medicare is a program that you may enroll in through Social Security. Like the SSA, Medicare does not accept the use of a regular POA document to negotiate and manage the Medicare account. If the person has not lost capacity, he or she may give you authorization so that you can access the Medicare information without his or her presence. This authorization will give you the ability to obtain information about Medicare eligibility, claims and premium payments, but it will not permit you to make changes to the account. There are a number of ways to obtain this authorization. The person can call 1-800-Medicare to complete the authorization over the phone, or log in to his or her My Medicare account and authorize Medicare to share the information with you online. Finally,
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the person can complete the CMS-10106, “Authorization to Disclose Personal Health Information.” It is possible, but unclear, whether an agent under a POA can sign this form. If a beneficiary is incapacitated and you would like to make changes to the account for them, you must apply to serve as the RP using the SSA-11. If you are named as a RP under Social Security, you do not need to acquire a separate appointment for Medicare, as it should apply to both. The Medicare CMS 1696, “Appointment of Representative” form permits someone to appoint you as a representative for him or her in an appeal, if there is a disagreement with a payment decision from Medicare. This form does not permit you to manage the person’s account.
Veterans Benefits
The Department of Veterans Affairs (VA) will not permit a POA or court order to allow an agent to manage the beneficiary’s account. If a beneficiary is unable to manage his or her financial affairs, a statement must be obtained from a doctor noting this. The statement must be sent to the VA office, which will begin the process of appointing a fiduciary in a program called the Fiduciary Hub. The Fiduciary Hub will give the beneficiary 60 days’ notice to appeal the determination that he or she is unable to manage his or her personal financial affairs. If the beneficiary does not agree to the appointment of the fiduciary, then he or she must find a doctor to sign a statement that the beneficiary is competent and able to manage his or her financial affairs. If the beneficiary does not object, he or she can waive the 60 days’ notice and name a fiduciary, such as his or her spouse, child, etc. Once a determination has been made that the beneficiary requires the appointment of a fiduciary, a field examiner visits the beneficiary and the possible appointee. Most times the field examiner will appoint the person that has been named by the beneficiary, but only after a thorough background investigation. Once appointed, the fiduciary must set up a custodial account in the name of the beneficiary and file a budget with 40
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the VA office. The fiduciary will be required to respond to all audits and investigations into the finances of the beneficiary. Unfortunately, there is no shortcut to help manage a beneficiary’s affairs if they are incapacitated, and being the SSA’s representative will not guarantee that you will be appointed by the VA. The beneficiary can share information with a third party (i.e., a spouse, child, etc.) by completing the VA Form 21-0845, “Authorization to Disclose Personal Information to a Third Party,” which gives the VA permission to share certain information, such as current benefits, claim status and current address. Filling out this form will not give you the ability to make any changes to the beneficiary’s account, but it will help you keep track of your loved one’s benefits.
The key to caring for loved ones is to be prepared early. Begin a Dialogue Today
So where does that leave you? The key to caring for loved ones is to be prepared early. While your loved one is still competent, make sure you have the tools and information needed to help. Get a power of attorney, advance medical directive and, if appropriate, a revocable trust in place. Take a look at the forms referenced above ahead of time, to make sure you have access to the information you will need. Talk about a budget, know where their funds are, what their income is and their wishes for the future. Planning ahead can provide both of you with peace of mind. —MARC S. LEVINE ESQ. IS A PARTNER IN HANDLER & LEVINE, LLC, A BETHESDA, MD, FIRM CONCENTRATING IN ESTATE PLANNING.
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THERE’S MORE TO GIFTING THAN YOU THINK
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arents and grandparents often ask me about the best way to provide financial assistance to children and grandchildren. In most cases, the question
arises due to concerns about running afoul of the gift tax rules. While it’s true the tax code puts a limit on the how much money we may gift each year without incurring gift taxes, that’s only part of the story. According to the IRS, the general rule is that any gift is a taxable gift. However, certain exclusions apply. For starters, the annual gift exclusion allows us to give up to $15,000 (up from $14,000) per recipient per year. Married couples are entitled to an unlimited gift exclusion when giving to each other, and they may “gift split” and give twice as much ($30,000 total) to each recipient each year. Payments you make on someone’s behalf for tuition and medical expenses also will be excluded if your payments are made directly to the qualifying educational institution or medical care provider. Amounts you pay directly to qualifying institutions also do not count toward the annual gift exclusion. A contribution to a 529 plan is not considered direct payment of education expenses, but does qualify for the annual gift exclusion. This is important to remember if you plan
42
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on making other gifts to the 529 plan beneficiary in the same year. One nice benefit to 529 plans is a special rule that allows you to contribute five years’ worth of annual gift exclusions at one time. For example, you may contribute $75,000 ($150,000 for married couples) to a 529 plan for one beneficiary and elect to treat the contribution as if it were made over five calendar years. Don’t fret if you give, or want to give, more than the annual gift exclusion amount. Individuals have a $5.6 million lifetime gift exemption and a $5.6 million estate exemption (the amount you may pass estate tax-free at death). When a gift exceeds the annual gift exclusion, you may elect to use your lifetime gift exclusion (which also reduces your estate exemption) to avoid gift taxes. For example, if a mother gives her son $100,000, $15,000 is covered by the annual gift exclusion, and the remaining $85,000 is consid-
BY MARK A. KEEN,
CFP®
ered a taxable gift. The mother will be required to file IRS Form 709, a gift tax return, but rather than pay gift taxes, she may elect to use $85,000 of her lifetime gift exemption (also reducing her estate exemption), leaving $5,315,000 for future lifetime gifts or estate tax-free transfers. When it comes time to make a gift, the default gifting method for most is to simply write a check to the recipient. Sometimes, however, it’s to the donor’s advantage to give appreciated investment assets, such as stocks or mutual funds, rather than cash. The donor’s cost basis in the asset carries over to the recipient, so when the asset is sold, the gain and any associated tax becomes the responsibility of the recipient. Depending on income, a taxpayer’s capital gains tax rate will be 0, 15 or 20 percent. Additionally, the 3.8 percent Medicare surtax may add to these rates for taxpayers with income over $200,000 ($250,000 for couples filing jointly). If the recipient’s income qualifies for the 0 percent capital gains tax rate, it’s possible for them to sell an asset for a gain and still pay no tax on the sale. If it’s an investment you would still like to own, you could then repurchase the investment with the cash you
BENEFITS RESOURCES NARFE offers members a wide range of information on federal benefits. Visit www. narfe.org/federalbenefits and www.narfe.org/ FederalBenefitsInstitute.
would have otherwise gifted to the recipient. Your cost basis will “reset” based on the repurchase price, which means your taxable gain will be smaller if you sell the investment in the future. For example, if you gifted $10,000 of Apple stock, with a cost basis of $5,000 to your daughter, you could then use $10,000 in cash to repurchase the shares you just gifted. You’ll still own the same number of shares, but you’ve just increased your
basis to $10,000, reducing any gain you may incur if you sold the stock in the future. Gifting investment assets may not work if the recipient is a college-aged or younger child as the “kiddie tax” rules, which may cause unearned income to be taxed at the parent’s rate, apply to children under age 19 and full-time college students under age 24. Despite common belief, gift and estate tax laws allow us to give far more than the annual gift exclusion each year. If you have questions about taxable gifts, take a look at IRS Publication 559, Form 709, and the instructions for Form 709, which are available at www.irs.gov. 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.
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
mm
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
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43
2017
G FUND
F FUND
C FUND
S FUND
I FUND
DECEMBER
0.20%
0.48%
1.11%
0.47%
1.60%
NOVEMBER
0.19%
-0.11%
3.07%
2.90%
1.06%
OCTOBER
0.19%
0.07%
2.33%
1.41%
1.54%
YTD
2.33%
3.82%
21.82%
18.22%
25.42%
1 YEAR
2.33%
3.82%
21.82%
18.22%
25.42%
3 YEAR*
2.06%
2.54%
11.45%
10.12%
8.41%
5 YEAR*
2.08%
2.50%
15.85%
14.77%
8.07%
10 YEAR*
2.38%
4.27%
8.55%
9.37%
2.23%
L INCOME
L 2020
L 2030
L 2040
L 2050
DECEMBER
0.41%
0.57%
0.81%
0.92%
1.00%
NOVEMBER
0.62%
0.99%
1.55%
1.80%
2.03%
OCTOBER
0.54%
0.83%
1.27%
1.46%
1.63%
YTD
6.19%
9.86%
14.54%
16.77%
18.81%
1 YEAR
6.19%
9.86%
14.54%
16.77%
18.81%
3 YEAR*
3.86%
5.50%
7.41%
8.27%
9.05%
5 YEAR*
4.46%
7.44%
9.50%
10.68%
11.72%
10 YEAR*
3.80%
4.91%
5.85%
6.26%
N/A
2017
*ANNUALIZED
*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
TRENDS PRODUCE GAINS FOR ALL TSP FUNDS IN DECEMBER
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
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 APRIL 6,581 18,932 MAY 5,548 16,140 JUNE 6,141 14,530 JULY 10,070 17,091 AUGUST 7,136 17,125 SEPTEMBER 8,810 16,828 OCTOBER 8,850 18,860 NOVEMBER 5,572 19,294
60% 56% 51% 56% 61% 56% 54% 55% 55% 57% 57% 59% 58%
94 95 89 104 105 80 89 99 98 105 93 93 97
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 44
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Tax reform, continued economic growth and optimism about future corporate earnings continued as themes for December 2017. Global stock markets responded positively as U.S. markets made a number of new records and the C, S and I Funds all generated gains. The I Fund also was aided by the dollar’s decline. The F Fund profited in spite of the Federal Reserve raising its target Fed Funds rate for the third time this year as Treasury yield movement was mixed. All of the L Funds had positive results. —BY SEAN MCCAFFREY, DEPUTY CHIEF INVESTMENT OFFICER, THRIFT SAVINGS PLAN
COUNTDOWN TO COLA
T
he Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 0.04 percent in November 2017. To calculate the 2019 cost-of-living adjustment (COLA), the indices of July, August and September 2018 will be averaged and compared with the 2017 third-quarter average of 239.668. The percentage increase determines the COLA. November’s index, 240.666, is up 0.42 percent from the base. Benefits awarded under the Federal Employees’ Compensation Act (FECA) to individuals suffering work-related injuries or illnesses are adjusted according to each calendar year’s percentage change in the CPI-W. October’s index is 2.24 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 239.668
OCTOBER 2017
240.573
-0.15
0.38
NOVEMBER
240.666
0.04
0.42
DECEMBER JANUARY 2018 FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER
Donate to NARFE Programs Support Alzheimer’s Research
YOUR CHARITABLE CONTRIBUTION IS TAX-DEDUCTIBLE TO THE FULLEST EXTENT ALLOWED BY LAW.
WRITE YOUR CHAPTER NUMBER ON CHECK; MAKE IT PAYABLE TO: NARFE-Alzheimer’s Research
Enclosed is my NARFE-Alzheimer’s contribution: $ Every cent that is contributed is used for research. Please circle: Mr. Mrs. Miss Ms. AND MAIL TO: Name: Alzheimer’s Association Address: 225 N. Michigan Ave., 17th Floor City: State: ZIP: Chicago, IL 60601-7633 Chapter Number: Credit Card Information: MasterCard VISA NARFE MEMBERS CONTRIBUTED FOR If you have any questions, write to: Discover AMEX ALZHEIMER’S RESEARCH: $13 Million Fund NATIONAL COMMITTEE CHAIR Card Number: Olivia Williams, 22 Garden Springs Road Expiration Date: (mm)/ (yy) Columbia, SC 29209 *Total as of November 30, 2017 3-Digit Security Code: 100% of all contributed funds go to Name: (please print) EMAIL: oeashf3@bellsouth.net
$12,481,741* Alzheimer’s research.
Signature
Join the Silver CIrcle CLIP THIS CONTRIBUTION FORM AND MAIL TO: NARFE Silver Circle 606 N. Washington St. Alexandria, VA 22314
•For a contribution of $25 or more, you will receive a Silver Circle pin, and your name will be listed in narfe magazine with other contributors. •For a contribution of $1,000 or more, your name will be placed on the “Wall of Fame” at NARFE Headquarters.
YOUR CHARITABLE CONTRIBUTION IS TAX-DEDUCTIBLE TO THE FULLEST EXTENT ALLOWED BY LAW.
/
Enclosed is my Silver Circle contribution: $ ID # (ID # may be found on your narfe magazine label or your NARFE membership card)
Name: Address: City: State: ZIP: Silver Circle contributions are NOT deductible for federal income tax purposes.
INSTALLMENT PLAN Wall of Fame 12-month installment plan
Give to the Scholarship and Disaster Funds
PLEASE MAIL COUPON AND CHECK TO: FEEA 1641 Prince St. Alexandria, VA 22314
/
All donations go to the NARFE General Fund to support NARFE programs and operations.
My check is enclosed
(Please make check payable to NARFE Silver Circle.)
Please charge my credit card Card type MasterCard VISA Discover AMEX Card Number: Expiration Date: (mm)/ (yy) Name: (please print)
Signature
MAKE CHECK PAYABLE TO: NARFE-FEEA Disaster Fund or NARFE-FEEA Scholarship Fund.
Date
YES!
Date
/
I would like to help with my contribution.
Scholarships are available to children, grandchildren and great-grandchildren of federal civilian retirees and current federal employees who are NARFE members. NARFE-FEEA Disaster Fund NARFE-FEEA Scholarship Fund
Amount: $ Amount: $
Name: Address: City: State: ZIP: To make credit card contributions, visit NARFE Scholarships at www.feea.org/givenarfeschol or NARFE Disaster Relief at www.feea.org/givenarferelief.
/
NARFE News
NARFE-FEEA SCHOLARSHIP NEWS
ALZHEIMER’S STAMP UNVEILED
T
he United States Postal Service (USPS) unveiled the first in a new series of stamps in the USPS Discretionary Semipostal Stamp Program on November 30, 2017, which will fund Alzheimer’s research through the National Institutes of Health (NIH) to help support the goal of finding a cure or effectively treating the disease by 2025. The issuance of this stamp will help raise funds and increase awareness of Alzheimer’s disease, which is the sixth leading cause of death in the United States, and the only cause of death among the top 10 causes that cannot be prevented, cured or even slowed. Today more
than 5 million Americans are living with the disease and that number is projected to reach as many as 16 million by 2050. NARFE member and Alzheimer’s advocate Kathy Siggins was recognized at the stamp unveiling ceremony for her dedication to following the discretionary semipostal program criteria in submitting the stamp suggestion. Siggins’ ongoing efforts to collaborate with USPS expedited the process of creating the Alzheimer’s stamp. NARFE is proud of her dedication and leadership in combatting this devastating disease. The dedication ceremony was well attended and comments were
The 2018 NARFE-FEEA Scholarship application is now available online. Twenty scholarships of $1,000 each are available to children, stepchildren, grandchildren, step-grandchildren, great-grandchildren or step-great-grandchildren of any NARFE member in good standing. The deadline for all applications is March 21, 2018. To fill out an application or for more information, visit www.narfe.org/home/articles. cfm?ID-1501. Winners will be announced in fall 2018 and published in the December issue of narfe magazine.
delivered by Rep. Elijah Cummings, D-MD, Postmaster General and Chief Executive Officer Meagan Brennan and others central to the introduction of the stamp. The Alzheimer’s stamp is now available nationwide for 60 cents. The price includes the first-class, single-piece postage rate in effect at the time of purchase plus an amount to fund Alzheimer’s research. NARFE applauds the efforts of Siggins and other advocates who made the introduction of this stamp possible. Above, Richard Thissen, NARFE president (right), joins Kathy Siggins, Alzheimer’s stamp originator.
NARFE KEEPS THE CONVERSATION GOING
A
re you taking advantage of all of NARFE’s channels of communication? Every member of NARFE receives a copy of narfe magazine in the mail each month. If you have an email address on file, you receive the association’s weekly electronic news digest, NARFE
46
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NewsWatch, in your inbox every Tuesday. But did you know that NARFE keeps the conversation going on Facebook and Twitter? • On Facebook, NARFE can be found
at NARFE National Headquarters. • NARFE’s Twitter handle is @narfehq. Don’t miss out on important breaking news from NARFE Headquarters. Like us on Facebook and follow us on Twitter to keep informed every day.
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Join NARFE Today!
The only organization dedicated solely to protecting and preserving the benefits of all federal workers and retirees, NARFE informs you of any developments and proposals that affect your compensation, retirement and health benefits, AND provides clear answers to your questions.
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.
NARFE MEMBER BENEFITS
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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. The opportunity to get involved at the local level by joining a chapter in your area. 1Q6
NARFE MEMBERSHIP APPLIC ATION q YES. I want to join NARFE for the low annual dues of $40. q Mr. q Mrs. q Miss q Ms.
____________________________________________________
Full Name
____________________________________________________
Street Address
____________________________________________________
Apt./Unit
____________________________________________________
City
State
ZIP
____________________________________________________
Phone
____________________________________________________
I am a (check all that apply) q Active Federal Employee q Active Federal Employee Spouse q Annuitant
q Annuitant Spouse q Survivor Annuitant
q Please enroll my spouse _______________________________________________
Spouse’s Full Name
_______________________________________________ Spouse’s Email
THREE EASY WAYS TO JOIN 1. Complete this application and mail with your payment to NARFE / Member Records / 606 N. Washington St. / Alexandria, VA 22314-1914
2. Join online at www.narfe.org. 3. Call 800-456-8410, Monday through Friday, 8 a.m. to 5 p.m. ET.
PAYMENT OPTIONS q Check, Money Order or Bill Pay (Payable to NARFE) q Bill me (NARFE membership will start when payment is received.) q Charge my: q MasterCard
q VISA q Discover
q AMEX
_________________________________________________ Card No. Expiration Date _____ /________ mm
yyyy
_________________________________________________ Name on Card _________________________________________________ Signature _________________________________________________ Date
TOTAL DUES $40 Annual Dues X ___________ = ___________ Per Person # Enrolling Total Dues Dues payments are not deductible as charitable contributions for federal income tax purposes. Looking to meet others in the federal community and participate in NARFE at a local level? Call 800-456-8410 to learn about a NARFE chapter in your area. Or, if known, add Chapter # to join now ________________
MAY WE THANK SOMEONE? If applicable, please provide the name, membership ID and chapter number of the member who introduced you to NARFE: _________________________________________________ Recruiter’s Name _________________________________________________ Recruiter’s Membership ID _________________________________________________ Recruiter’s Chapter Number
NARFE respects the privacy of our members. Personal information is used to provide content and relevant communications to our members, and will not be sold or rented to third parties without your express permission.
ALL NEW! NARFE’S PREMIER CONFERENCE AUGUST 26-28, 2018 • JACKSONVILLE, FLORIDA HYATT REGENCY JACKSONVILLE RIVERFRONT
Jacksonville, Florida sets the stage for FEDcon18 – the premier event celebrating the dedication of America’s civil servants.
REGISTRATION OPENS FEBRUARY 1st Save with early bird rates by registering before March 31st. Register online at www.narfe.org/FEDcon18.
FEDcon18 KEYNOTE SPEAKERS JUST ANNOUNCED!
HENRY WINKLER
Actor, author, director and producer
TAMMY FLANAGAN Rethinking Retirement Federal benefits expert and counselor, NARFE Institute presenter and Government Executive columnist
MARA LIASSON Political Update
National political correspondent for NPR and contributor to FOX News Channel
MIKE MASSIMINO Excellence in Civil Service Former NASA astronaut, Columbia University engineering professor
OVER 20 BREAKOUT SESSIONS covering NARFE Federal Benefits Institute, NARFE Advocacy, Leadership and Lifestyle. More details to be added soon. CHECK BACK OFTEN at www.narfe.org/FEDcon18 for conference updates!
NARFE, the National Active and Retired Federal Employees Association, provides legislative advocacy to protect and preserve the earned pay, retirement and benefits of federal employees, retirees and their survivors. NARFE provides expert education on and assistance with benefits for all members of the organization.
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. INSURANCE
MiniMoves 800-300-6683 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.
NARFE Insurance Services 800-233-5764 www.narfeinsurance.com Designed exclusively for NARFE members, plans administered by Mercer Health & Benefits Administration LLC: Group Term Life Insurance, Senior Age Whole Life Insurance, Senior Term Life Insurance, Group Hospital Income Insurance, Hospital Income and ShortTerm Recovery Insurance, and Pet Insurance.
MOVING SERVICES
Bekins Van Lines 800-456-6832 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. 50
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NEW
MiniMoves is America’s only national mover exclusively focused on small shipments; a piece, a room or a full condo. There’s no minimum weight charge. Our binding quote helps you plan your move with confidence. Member discount - $25 off 500 pounds; $50 off larger moves. Use code 1292.
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.
PRODUCTS
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 memo-
rable 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.
NEW
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
Verizon FiOS www.narfe.org/memberperks NARFE members can save up to $10 a month on a new qualifying Triple Play bundle with Verizon Fios Internet, TV and home phone service – savings of up to $120 per year. This exclusive onlineonly savings is only available to new Verizon customers or those upgrading to the Triple Play Package.
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.
Avis Car Rental 800-633-3469 www.avis.com Avis Car Rental is one of the world’s best-known car rental brands with approximately 5,500 locations in more than 165 countries. Avis has a long history of innovation in the car rental industry and is one of the world’s top brands for customer loyalty. Call or book your reservation now at Avis.com using the NARFE AWD number A701900.
Budget Car Rental 800-218-7992 www.budget.com Budget Car rental was founded in 1958 for the “budget-minded” renter. Today, with approximately 3,500 locations around the world, Budget is a leading rental car supplier now offering discounts to members of NARFE. Call or book your reservation now at Budget. com using the NARFE BCD number D871500.
Choice Hotels International 800-258-2847 www.choicehotels.com With 6,400 hotels in the United States and throughout the world, Choice Hotels® offers something for everyone. As a NARFE member, receive 20% off your next stay at participating hotels when you use Special Rate ID 00801967. This offer is subject to availability and cannot be combined with any other offer. Advance reservations required through phone number or website above; cannot be redeemed at individual hotels. Choice Hotels brands are: Comfort Inn, Comfort Suites, Sleep Inn, MainStay Suites and more.
WELLNESS
National 800-CAR-RENT www.nationalcarrental.com You Drive A Hard Bargain. Receive up to 20% off rentals at National Car Rental. To make a reservation, call National Car Rental at 1-800-CARRENT® and reference Contract ID 5282909. For complete terms and conditions, visit www.narfe.org/ memberperks.
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 Inn, Microtel Inns and Suites and more. Advance reservations required through phone number above; cannot be redeemed at individual hotels.
NEW HearUSA www.hearusa.com/narfe The Nation’s Most Trusted Name in Hearing Care. Choose from 250+ hearing aids from 11 manufacturers with $0 co-pay for many plans. Wireless. Bluetooth. Smartphone compatible. Nearly invisible. Risk-free 60-Day trial. Free follow-up care. Free 3-Year warranty. Call 1-855-845-2706 to see if you qualify for 2 FREE hearing aids.
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
Wyndham NEW Extra Holidays 800-428-1932 www.extraholidays.com Excellent service and the finest comforts are standards you can always rely on with Wyndham Extra Holidays. With more spacious floor plans than a regular hotel, you can enjoy a One-, Two- or Three-Bedroom suite with separate living areas and partial or fully equipped kitchens. Please use promo code 8000002694 when calling or booking online.
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. For a complete list of any restrictions, visit www.narfe.org/ memberperks. For new move-ins 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 these additional Member Perks on the NARFE website for more details!
W W W. N A R F E . O R G
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The Way We Worked
MONITORING THE WEATHER In this 1963 photo, Weather Bureau meteorologist Leonard Hand is consulting his weather monitoring devices at the Portageville, Missouri, Microweather Observation Station. The civilian Weather Bureau was created as part of the Department of Agriculture in 1890. Its mission was to provide basic weather service in support of federal agencies and the general public, including weather forecasting and collecting, and disseminating temperature, rainfall and climatic data for the United States. Today the National Weather Service continues to maintain a network of weather observation stations throughout the United States to support its mission. PHOTO from the Records of the U.S. Weather Bureau, National Archives, courtesy of the 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. 52
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DID YOU KNOW? The National Weather Service has moved around to a lot of agencies in its history. It started out as the United States Weather Bureau in the Department of War in 1870, the Department of Agriculture in 1890 and the Department of Commerce in 1940. It then became part of the Environmental Science Services Administration, renamed the National Oceanic and Atmospheric Administration (NOAA) on October 1, 1970. Visit www.noaa.org.
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IMPORTANT CONSUMER INFORMATION: Jitterbug is owned by GreatCall, Inc. Your invoices will come from GreatCall. 1Monthly fees do not include government taxes or assessment surcharges and are subject to change. Plans and services may require purchase of a Jitterbug Flip and a one-time setup fee of $35. 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. 2We 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 Personal 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 Personal Operator. Jitterbug, GreatCall and 5Star are registered trademarks of GreatCall, Inc. Copyright ©2018 GreatCall, Inc. ©2018 firstSTREET for Boomers and Beyond, Inc.
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