APRIL 2019 NARFE Magazine by NARFE

APR

’19

COVER STORY

FEDERAL

WORKFORCE ENGAGEMENT:

GETTING THE RIGHT MIX

STATE TAX ROUNDUP

Volume 95 • Number 4

Federal Employee Program

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AP R

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WASHINGTON WATCH

Law Ends Shutdown Back Pay Uncertainty

GAO Study Assesses Alternative Consumer Price Indexes for COLA Calculations

Federal Retiree Wins in Supreme Court

Everyone Can Be a NARFE Advocate

10 NARFE Bill Tracker COLUMNS

From the President

40 Managing Money

COVER STORY EMPLOYEE ENGAGEMENT—GETTING THE RIGHT MIX: Ev Chasen explores how some federal workplaces have found the recipe for “best workplace” success.

DEPARTMENTS

16 Questions & Answers 42 For the Record 44 NARFE News 50 Member Perks

STATE TAX ROUNDUP: This comprehensive guide can help you understand your tax liability in retirement.

52 The Way We Worked

APR

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On the Web

COVER STORY

FEDERAL

WORKFORCE ENGAGEMENT:

VISIT US ONLINE AT:

GETTING THE RIGHT MIX

STATE TAX ROUNDUP

www.narfe.org LIKE US ON FACEBOOK:

NARFE National Headquarters FOLLOW US ON TWITTER:

@narfehq

Volume 95 • Number 4

ON THE COVER

Illustration by GRAPHEK W W W. N A R F E . O R G

APRIL 2019 | Volume 95 | Number 4

EDITORIAL DIRECTOR Helen Mosher COMMUNICATIONS ASSISTANT Precious Dorch-Robinson GRAPHIC DESIGN GRAPHEK, Beth Bedard EDITORIAL BOARD Kenneth J. Thomas, Kathryn E. Hensley, 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 individuals who have trouble seeing or reading the print edition. For more information, contact the National Federation of the Blind NFB-NEWSLINE® service at 866-5047300 or go to www.nfbnewsline.org. ON DIGITAL AUDIO: Issues of NARFE Magazine are also available in audio format through the National Library Service for the Blind and Physically Handicapped (NLS). For availability, call 202-727-2142 or your local NLS service provider. The Association, since July 1970, has been classified by the IRS as a tax-exempt labor organization [not a union]; however, dues and gifts or contributions to the Association are not deductible as charitable contributions for income tax purposes.

National Active and Retired Federal Employees Association NATIONAL OFFICERS KENNETH J. THOMAS, President; natpres@narfe.org KATHRYN E. HENSLEY, Secretary/Treasurer; natsectreas@narfe.org EXECUTIVE DIRECTOR BARBARA SIDO, execdir@narfe.org

REGIONAL VICE PRESIDENTS

REGION I James C. Risner (Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont) TEL: 207-540-6233 EMAIL: rvp1@narfe.org REGION II Kathleen Adams (Delaware, District of Columbia, Maryland, New Jersey and Pennsylvania) TEL: 302-697-6650 CELL: 302-561-5660 EMAIL: adamskhawaii@aol.com 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 Robert L. Helfrich (Illinois, Indiana, Michigan, Ohio and Wisconsin) TEL: 317-501-1700 EMAIL: rvp4@narfe.org

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

REGION V Cindy Reneé Blythe (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota) TEL: 785-256-1450 EMAIL: mrsdocbusyb@yahoo.com

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:

TO REACH A FEDERAL BENEFITS SPECIALIST:

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”

EMAIL fedbenefits@narfe.org NARFE HEADQUARTERS

606 N. Washington St. Alexandria, VA 22314 703-838-7760 Hours of operation: Monday-Friday, 8 a.m.-5 p.m. ET

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 © 2019, 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 Magazine, but at the same time we will not undertake to guarantee the reliability of our advertisers.

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From the President

GET RESULTS: CROSS THE AISLE

very American benefits from the work of federal employees every day. This became even more important and

obvious in the wake of the longest government shutdown in U.S. history, when 800,000 federal employees missed two consecutive paychecks during a 35-day stalemate.

Shutting down the government to achieve a legislative end is not about getting the “YES” vote and building consensus. Americans expect federal employees to place the needs of this nation above their own and to be able to carry out their daily work of accomplishing the government’s mission. It is important to remember that NARFE repeatedly has crossed the aisle and worked with elected officials from both parties to achieve a positive resolution to government shutdowns, pay-freeze legislation and changes to retirement benefits, among others. Ask anyone, and they will tell you that the political climate is becoming more partisan. As a cautionary note, NARFE members should remember that this association is political, not partisan. This is a small, yet important,

NARFE’s Mission Statement To support legislation and regulations beneficial to federal civilian employees and annuitants and potential annuitants under any federal civilian retirement system and to oppose those detrimental to their interests. To promote the general welfare of federal civilian employees and annuitants and potential annuitants, to advise and assist them with respect to their rights under retirement, health and other employee and retiree benefits laws and regulations, and to represent their interests before appropriate authorities. To cooperate with other organizations and associations in furtherance of these general objectives.

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distinction. The reality is that NARFE members must meet with their elected officials on both sides of the aisle, as personal outreach can influence decisions on earned federal benefits. Members of Congress know that NARFE is a nonpartisan, honest broker that delivers unbiased positions and accurate information for the benefit of good governance. That rapport gives NARFE access to meetings, briefings and opportunities to provide perspective on pending legislation. While NARFE is a nonpartisan organization, it recognizes that elected officials have party affiliations. Knowing that members of Congress increasingly vote along party lines, NARFE highlights legislators and policymakers that actually cross the aisle on votes. In today’s political climate, that is not always an easy thing to do. It is vital that NARFE members speak to their elected officials on issues or concerns, regardless of the official’s party. Members of Congress are responsible to their constituents; therefore, they must hear from them. NARFE members cannot limit their engagement to legislators who share their party affiliation—that is a luxury NARFE cannot afford. NARFE continues working to secure, preserve and advocate for the earned pay and benefits of federal employees, retirees and annuitants. NARFE remains a nonpartisan organization, and it is important that the organization’s members are nonpartisan as well when working on NARFE’s behalf. Remember, the issues that NARFE faces impact people regardless of their political party. Please go cross that aisle.

KENNETH J. THOMAS NARFE NATIONAL PRESIDENT natpres@narfe.org

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Washington Watch

LAW ENDS SHUTDOWN BACK PAY UNCERTAINTY

mid the longest government shutdown in American history, reaching 35 days, lawmakers and the president were able to put into law a pivotal piece of

bipartisan legislation on January 16: the Government Employee Fair Treatment Act of 2019, S. 24. Authored by Sen. Ben Cardin, D-MD, S. 24 guaranteed furloughed employees retroactive pay after the shutdown and also stipulated that the 800,000 affected Feds, both excepted and furloughed, were to be made whole as promptly as possible once appropriations were restored rather than wait until the next scheduled pay day. Missed paychecks wreak havoc on the lives of federal employees, hitting those who live paycheck to paycheck the hardest. Although this legislation did not provide pay during the appropriations lapse, it at least provided some assurance during a time of great uncertainty and financial pressure. This landmark legislation’s guarantee of back pay not only applied to the recent shutdown, but also all future shutdowns. NARFE applauds Sen. Cardin and all those who supported this legislation. In doing so, they have ended the days of worrying if shutdowns 6

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will result in no pay at all for hardworking federal employees who cannot afford to miss paychecks due to needless political nightmares brought on by dysfunction between Congress and the White House. Despite Congress historically providing back pay, it previously was not guaranteed. S. 24 reduces the unnecessary stress of furloughed federal employees wondering if being locked out of their jobs through no fault of their own would deny them the ability to provide for themselves and their families. NARFE worked with its allies in Congress to advance the legislation. — BY SAMUEL BARTELS, ADVOCACY ASSISTANT

MYTH vs. REALITY Myth: Government shutdowns only affect the pocketbooks of federal employees. Reality: While government shutdowns put severe and disproportionate financial pressure on federal employees and their families, shutdowns also have farreaching consequences for the U.S. economy as a whole and the finances of non-federal employees in communities across the country. According to the Congressional Budget Office (CBO), the 35-day partial government shutdown diminished gross domestic product (GDP) by $3 billion in the fourth quarter of 2018 and by $8 billion in the first quarter of 2019. Shutdowns slow overall economic activity through the loss of affected federal employees’ and contractors’ contributions to GDP, the delay in federal spending on goods and services, and the reduction in aggregate demand which dampens private-sector activity. The economic repercussions of government shutdowns can snowball out of control and needlessly hurt all Americans.

GAO STUDY ASSESSES ALTERNATIVE CONSUMER PRICE INDEXES FOR COLA CALCULATIONS

he Government Accountability Office (GAO) published a study juxtaposing the effects of calculating annual cost-ofliving adjustments (COLAs) to federal retirement program benefits with alternative consumer price indexes (CPIs). The agency looked at how a switch from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is currently used to calculate COLAs, would change retirement benefits and program costs. GAO compared the hypothetical COLAs of competing CPIs based on historical and assumed future inflation rates between 2003 and 2033. COLAs protect annuity recipients from the eroding effects of inflation. COLAs to Social Security, the Civil Service Retirement System and the Federal Employees Retirement System are currently calculated according to fluctuations in the CPI-W. Two alternatives to the CPI-W include the Consumer Price Index for the ACTION ALERT!

Elderly (CPI-E) and the Chained Consumer Price Index for All Urban Consumers (Chained CPI-U). NARFE’s position is that the CPI-E more accurately accounts for the spending habits of seniors by examining this population. Medical expenses are increasing in price more rapidly than other goods, and seniors spend a greater portion of their budget on health care than the general population does. Meanwhile, the Chained CPI-U accounts for changes in behavior, such as consumers’ choices to buy cheaper goods and services to adapt to increasing prices. Unsurprisingly, GAO found there would be minor reductions in benefits and program costs each year under the Chained CPI-U, and there would be minor increases in benefits and program costs each year under the CPI-E. But over a period of 30 years, GAO found some beneficiaries of federal retirement programs could see substantial differences in their total retirement income due to the accumulation of incremental

APRIL

Did you participate in a congressional meeting at LEGcon19 or in your home district/state recently? Summarize the meeting using the Congressional Meeting or Event Feedback form on NARFE’s Legislative Action Center (found at www.narfe.org/legislation). This ensures NARFE headquarters and field activities complement one another.

annual changes. Switching to an alternative CPI would have the largest effect on the most vulnerable beneficiaries with lower incomes and those who receive benefits the longest. GAO estimated that a household in the lowest 20 percent of income could expect about a 6 percent decrease in total retirement income over 30 years under the Chained CPI-U and a 4 percent gain in total retirement income over 30 years under the CPI-E relative to the current index. Households in the highest 20 percent of income, meanwhile, would only experience about a 1 percent change in total retirement income over 30 years with either alternative CPI. Seniors living on fixed incomes already purchase lowerpriced goods, which breaks the core assumption supporting the Chained CPI-U. Both the Chained CPI-U and the current CPI-W misrepresent seniors’ spending habits, and instead rely on the spending trends of the working population. Both of these indexes fail to account for the substantial amount seniors spend on health care compared to the general population. NARFE supports calculating annual COLAs based on the CPI-E, which would accurately measure inflation’s impact on retirees. — BY SAMUEL BARTELS, ADVOCACY ASSISTANT W W W. N A R F E . O R G

Washington Watch

FEDERAL RETIREE WINS IN SUPREME COURT

n mid-February, the Supreme Court of the United States issued a unanimous decision to reverse West Virginia’s discriminatory taxation of a former U.S. Marshal’s federal retirement annuity in Dawson v. Steager. NARFE weighed in on the case in support of the petitioner, retired federal marshal James Dawson, submitting an amicus curiae, or “friend of the court,” brief last summer. The amicus brief argued that an unfavorable decision would risk setting a precedent for unfair tax treatment for more than 2.6 million federal annuitants nationwide, causing serious hardship to those annuitants. The Court agreed, and this ruling made clear that states may not grant special tax treatment to some of its current and former employees without providing the same tax treatment to similarly situated federal employees and retirees. Dawson was a Deputy U.S. Marshal before receiving a presidential appointment to be the U.S. Marshal for the Southern District of West Virginia. He began receiving a federal annuity under the Federal Employees Retirement System (FERS) after retiring, and sought a tax exemption from the state for all of his FERS annuity income. West Virginia law allows state law enforcement retirees to exempt from state income taxation all benefits received from four West Virginia

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The Supreme Court had “little difficulty concluding that West Virginia’s law unlawfully ‘discriminates’ against Mr. Dawson.” retirement plans. However, West Virginia law only allowed Dawson to exempt a portion of his FERS annuity from state taxation. Dawson challenged the West Virginia State Tax Department’s denial of the full exemption on the grounds that the denial violated federal law prohibiting discriminatory tax treatment against federal retirees. He initially won in the state’s trial court, but the tax department appealed, and the decision was reversed by the Supreme Court of Appeals of West Virginia. After the reversal, Dawson appealed the case to the Supreme Court of the United States, and it was argued before the Court in December 2018. In the 9-0 decision, written by Associate Justice Neil Gorsuch, the Court held that the West Virginia law unlawfully discriminates against Dawson, as prohibited by federal statute, 4 U.S.C. § 111. It found that a state violates that statute when it treats retired state employees differently than it does retired federal employees and “no significant differences between the two classes” (as previously held in Davis v. Michigan) justify the differential treatment. The Supreme Court had “little difficulty concluding that West Virginia’s

law unlawfully ‘discriminates’ against Mr. Dawson.” In a statement, NARFE President Ken Thomas said, “This decision prevents states from carving out one exemption after another for its own employees, only to shift that tax burden to federal employees and retirees.” This ruling is a win for NARFE, the federal community and the fight against states’ tax discrimination against federal retirement benefits. —BY ROSS APTER, POLITICAL ASSOCIATE

Legislative Resources • Legislative Hotline: A weekly update of legislative news, compiled by the NARFE Advocacy Department staff, distributed via email and available by phone (tollfree) at 800-456-8410, option 4 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.

EVERYONE CAN BE A NARFE ADVOCATE

ere you unable to join NARFE at LEGcon19 in March? Never fear. Even if you didn’t participate in LEGcon19 advocacy trainings and attend NARFE’s day on Capitol Hill, everyone can be an advocate. It can be as simple as making a phone call or sending an email to a congressional office. NARFE advocacy is a yearround effort. NARFE members are encouraged to use NARFE’s Legislative Action Center to send a message, call or tweet their legislators and attend congressional meetings, town halls and events with fellow federation members to spread the NARFE message. Use the following tips to effectively address your concerns with legislators: Be brief. Pick the topic or policy issue that you feel strongly about and elaborate on a few points that are succinct, but include enough information to explain your concerns. Need help? Use NARFE’s issue briefs and fact sheets for supporting facts. Keep your message focused and personal. Make your message stand out among many by adding the most important information in the beginning. If possible, give an example of how the issue affects you and/or your state. Use NARFE’s state-specific fact sheets to include information about the federal community in your state. Know your facts. Be accurate and honest in your communications. You can hurt your credibility and NARFE’s by

offering inaccurate or misleading information. Review NARFE’s fact sheets and issue briefs to learn more about NARFE’s legislative priorities before you contact a member of Congress or his/her congressional staff. Be timely. Contact your legislator when an issue is being debated in Congress and while there is still time for him/her to consider and act on your request. Read NARFE’s Legislative Hotline sent every Friday that Congress is in session and respond quickly to NARFE’s calls to action. Learn about your legislator’s position on NARFE issues. Personalizing your letter to reflect the viewpoint of the elected official can be very effective. Check to see if your member is already a cosponsor of the legislation you want him/her to support or oppose, and check his/her website for information on

previous statements made. Say thank you. Like everyone else, elected officials appreciate a “thank you” for a job well done. If a legislator voted in favor of NARFE’s position in the past, express your thanks. If your legislator did not support NARFE’s position, let him/her know that you are aware of that, and explain why you think he/ she should be supportive of the federal community. It might make a difference next time. Do not be negative. Coming off as condescending, rude or threatening will only alienate your legislator and hurt NARFE’s image and legislative agenda. Be polite and remember the golden rule. If you have questions about how you can advocate on behalf of the federal community, contact advocacy@narfe.org. — BY MOLLY CHECKSFIELD, GRASSROOTS PROGRAM MANAGER W W W. N A R F E . O R G

Washington Watch

narfe bill tracker THE NARFE BILL TRACKER IS YOUR MONTHLY GUIDE TO THE CONGRESSIONAL LEGISLATION THAT NARFE IS FOLLOWING. CHECK BACK EACH ISSUE FOR UPDATES. ISSUE

BILL NUMBER / NAME / SPONSOR H.Res. 23: Rep. Susan Davis, D-CA Cosponsors: 47 (D) 14 (R)

H.Res. 33: Rep. Stephen Lynch, D-MA POSTAL REFORM

Cosponsors: 152 (D) 25 (R)

H.Res. 54: Rep. Gerald Connolly, D-VA Cosponsors: 94 (D) 35 (R)

H.Res. 60: Rep. David McKinley, R-WV Cosponsors: 75 (D) 11 (R)

FEDERAL COMPENSATION

FEDERAL ANNUITIES

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WHAT BILL WOULD DO

Expresses the sense of the Referred to the House House that the United States Committee on Oversight and Reform Postal Service should take all appropriate measures to ensure the continuation of door delivery for all business and residential customers. Expresses the sense of the House that Congress should take all appropriate measures to ensure that the United States Postal Service remains an independent establishment of the federal government and is not subject to privatization.

Referred to the House Committee on Oversight and Reform

Expresses the sense of the House that the United States Postal Service should take all appropriate measures to ensure the continuation of its six-day mail delivery service.

Referred to the House Committee on Oversight and Reform

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

Referred to the House Committee on Oversight and Reform

H.R. 1073/S. 426: Federal Provides a 3.6 percent federal Adjustment of Income employee pay raise in calendar Rates (FAIR) Act / Rep. year 2020. Gerry Connolly, D-VA / Sen. Brian Schatz, D-MI Cosponsors: (H.R. 1073): 23 (D) 0 (R) (S. 426): 18 (D) 0 (R)

H.R. 1254: The Equal COLA Act / Rep. Gerry Connolly, D-VA Cosponsors: 1 (D) 0 (R)

LATEST ACTION(S)

Referred to the House Committee on Oversight and Reform (H.R. 1073) Referred to the Senate Committee on Homeland Security and Governmental Affairs (S. 426)

Provide Federal Employees Retirement System (FERS) retirees with the same annual cost-of-living adjustment (COLA) as Civil Service Retirement System (CSRS) employees

Referred to the House Committee on Oversight and Reform

NARFE’s Position:

Oppose

Support

No position

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

ISSUE

BILL NUMBER / NAME / SPONSOR H.R. 141: Social Security Fairness Act of 2019 / Rep. Rodney Davis, R-IL

GPO/WEP

Cosponsors: 76 (D) 33 (R)

H.R. 51: Washington, D.C. Admission Act / Del. Eleanor Holmes Norton, D-DC DC STATEHOOD

Cosponsors: 197 (D) 0 (R)

WHAT BILL WOULD DO Repeals both the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP).

LATEST ACTION(S) Referred to the House Committee on Ways and Means

Would provide for the admission Referred to the House of the State of Washington, D.C. Committee on Overinto the Union. sight and Reform and the House Committee on Rules

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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 FAMILY COVERAGE UNDER FEGLI

I got married 11 months ago and missed the 60-day window to elect family coverage (Option C) under the Federal Employees’ Group Life Insurance (FEGLI) program. I currently have basic coverage under FEGLI, but can I use the Standard Form 2822 to make this election if my spouse is healthy, or do I have to wait for a FEGLI open season to make this election?

Unfortunately, in your case, the Standard Form 2822 only provides you with the potential flexibility of adding Options A and/or B to your FEGLI. It does not allow you to add Option C (family coverage). If the Office of Personnel Management (OPM) offers another FEGLI open season while you are employed, you could use this opportunity to add Option C at that time. Also, while federally

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employed, if you experience a qualifying life event (QLE) such as the adoption or birth of a child, you could elect to add Option C to your FEGLI within 60 days of any such QLE. These QLEs are listed in the instructions that accompany the Standard Form 2817. If your spouse is healthy and insurable, an alternative idea is to seek secure life insurance for your spouse in the private sector or open market.

LIMITS ON TSP CONTRIBUTIONS

Q A

What is the maximum amount that I can contribute to my Thrift Savings Plan (TSP) each year?

The maximum amount that Civil Service Retirement System (CSRS) and Federal Employees Retirement System (FERS) employees can contribute to the TSP each year is determined by the Internal Revenue Service (IRS) and is referred to as the “elective deferral limit.” The IRS elective deferral limit only applies to the employee’s contributions, not the agency/ service automatic or matching contributions for FERS employees. The combined total of any Roth and/or tax-deferred traditional contributions in 2019 cannot exceed the total

of the elective deferral limit of $19,000. Employees that have reached the year of their 50th birthday or later can simultaneously establish an additional catch-up contribution not to exceed $6,000 in 2019. This means that some employees are allowed to contribute as much as $25,000 in 2019. Since FERS employees receive an agency match only during pay periods in which they contribute to TSP, they can opt to contribute the maximum amount the IRS allows in any given year without giving up any agency match. It’s recommended that they take the elective deferral limit and divide it equally among the number of pay periods for which they expect to receive pay. Otherwise, if a FERS employee reaches the limit too soon, the only agency contribution they will receive for the remaining pay dates of the year will be the agency automatic 1 percent contribution. Because there is no agency match on catchup contributions, FERS employees can feel free to have deductions withheld for catch-up contributions as much as they can afford each pay period. They can do this as long as their regular contribution reflects that the IRS elective deferral limit is scheduled to be reached prior to the end of the year.

Refer to the following TSP Fact Sheet for additional details: www.tsp.gov/PDF/ formspubs/tspfs07.pdf.

FEHB AND POSTPONED FERS ANNUITY

If I separate under the Federal Employees Retirement System (FERS) at my minimum retirement age (MRA) with just over 10 years of service and opt to postpone collecting my annuity to avoid the permanent reduction for early age, then my unreduced annuity is waiting for me from the Office of Personnel Management (OPM) at age 62. However, if I decide to postpone claiming my annuity until 66 or 67, can I still have my Federal Employees Health Benefits (FEHB) coverage when I claim my annuity from OPM? I’m asking because I expect to be working at a company that provides health insurance at no cost for several years following my separation from federal service. Plus, I may not need Medicare Part B at age 65 if I’m still covered by employment health insurance through a private-sector employer.

Yes, as long as you were covered by the FEHB program for the last 5 years of your federal career leading up to the date

of your separation. Since you are eligible for an immediate retirement upon separation from federal service, OPM will allow you to reinstate your FEHB coverage when you eventually decide to apply for your postponed annuity. If you don’t file for your annuity at age 62 and decide to claim it later, although your previously unpaid annuity would be paid retroactively in a lump sum, the FEHB wouldn’t be effective until you file your application. In other words, OPM won’t charge you for health-insurance premiums retroactive to age 62 if you file for your retirement at age 67, even though they will pay you for 5 years of retroactive annuity.

RETIREES SOCIAL SECURITY RESTRICTED APPLICATION

My father just reached his full retirement age (FRA) for Social Security last month. Instead of applying for his own benefit, he told Social Security that he only wanted to claim 50 percent of my mother’s benefit. He said this allows his work record to continue to grow with delayed credits and when he reaches age 70, he can switch over to his work record and claim his maximum benefit from Social Security for the W W W. N A R F E . O R G

Questions & Answers

rest of his life. Is this something that I can also do later in life when I reach my full retirement age?

Your father is able to file a restricted application with Social Security because he was born before January 2, 1954. This essentially allows him to claim 50 percent of his spouse’s primary insurance amount from Social Security while simultaneously allowing his own benefit to grow. This also has the possibility of increasing his spouse’s future widow benefit from Social Security if the benefit he waits to draw is larger than the benefit his spouse is drawing. Your father would be giving away money if he wasn’t claiming something from Social Security now that he’s reached his FRA and is eligible for this type of claim. However, in your case, you would not be allowed to file a restricted application because you were born on or after January 2, 1954. In your case, if the following conditions apply: • You are married to someone who also pays Social Security taxes when you apply for Social Security; • You are eligible for a benefit based on both your record and your spouse’s record; and • You are not widowed Social Security will automatically give you the higher of the two work records. They call this “deemed filing,” which essentially means when

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someone files for Social Security, if they are entitled to a potential benefit from more than one work record, they are deemed to have applied for both at the same time. They automatically give you the higher of the two benefits. You can no longer ask for the lesser of the two and allow the other benefit to grow and switch over later. However, if you are widowed by the time you qualify for Social Security, you can ask for a benefit from one record while allowing the other to continue to grow if applicable. Nothing has changed this rule, yet. This rule also applies to former spouse benefits. If your marriage lasts for 10 or more years, you can qualify for former spouse benefits if you are unmarried when you qualify for Social Security. Even if your former spouse predeceases you, you could still qualify for a former spouse widow/widower benefit if you haven’t remarried before the age 60. If you haven’t done so already, take a look at the Social Security webinar that was presented by the NARFE Federal Benefits Institute in March of 2018: www.narfe.org/member/ FederalBenefitsInstitute. You might also find the following Social Security white paper useful: www.narfe.org/pdf/ Social_Security_wp.pdf.

MEDICARE COVERAGE FOR MY WORKING SPOUSE

I’m retired from federal service, and my working spouse is still covered under my Federal Employees

Health Benefits (FEHB) plan. She will be reaching the age of 65 later this year. Recently, someone told her that if she is still working, she has the option to delay her enrollment for Medicare without any penalty until she stops working. Is this true?

In your spouse’s case, since she is not covered by her employer’s health insurance plan or your employer’s health insurance plan, it is not true that she will avoid the late enrollment penalty for Medicare Part B if she delays enrollment. Under Medicare rules, your FEHB is no longer considered “employer health-insurance coverage” now that you have retired from federal service. Unless she can get some health insurance through her employer, it’s recommended that she consider her Medicare options during the sevenmonth initial enrollment period (IEP) that surrounds her 65th birthday. There are many options to consider, especially if her current work income would push her into a higher Medicare Part B premium due to the Income Related Monthly Adjustment Amount (IRMAA). We brief ly described the IRMAA for 2019 in the January issue of NARFE Magazine, p. 16. You can contact us at the Federal Benefits Institute if you would like to discuss this specific situation in further detail. (See our contact information on p. 21.)

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Questions & Answers

COST-OF-LIVING ADJUSTMENTS

Where can I find more information about any upcoming cost-ofliving adjustment (COLA) for my federal civil service annuity, as well as the historical COLAs?

Each issue of NARFE Magazine has COLA information in its “For the Record” column, and additional information is posted each month to www.narfe. org/COLA. For the historical COLAs, check out NARFE’s issue brief titled “Civil Service COLA History,” available at www.narfe. org/legislation/?fa=issueBriefs.

The Congressional Research Service releases annual updates each October. Use the following link to keep up with any changes published each year: www.fas.org/ sgp/crs/misc/94-834.pdf.

OFFSET TO MY SPOUSE’S SURVIVOR BENEFIT

My spouse has a larger Social Security benefit than I do. I elected the maximum survivor benefit for my spouse when I applied for my CSRS Offset retirement with OPM years ago. Although my annuity from OPM has been reduced (offset) due to my eligibility for Social Security, if

my spouse outlives me, will her survivor benefit from OPM also be reduced due to the same offset that has been applied to my annuity?

Based on the information that you shared, it is unlikely that your spouse’s survivor benefit from OPM would be reduced or offset the way your annuity currently is. It is more likely that your surviving spouse will be eligible to receive 55 percent of your unreduced annuity with no offset. The reason for this is that she will not be claiming anything from your Social Security work

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record as a widow if the benefit she is claiming based on her own Social Security work record is higher than yours. For example: $5,000 U nreduced Monthly Annuity -$477.50 Reduction for Maximum Survivor Benefit -$1,000 Offset Amount $3,522.50 Reduced Monthly Annuity (gross) $2,750 G ross Monthly Survivor Benefit Amount Payable to Spouse (i.e. 55 percent of your unreduced annuity)

However, the situation is different if she becomes widowed before she attempts to claim a benefit from Social Security based on her own work record. For a detailed discussion of this particular exception, reach out to the Federal Benefits Institute at NARFE using the contact information below. 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.

NARFE at Your Service At NARFE headquarters, experts are available to answer questions and to assist in helping with a variety of benefit matters. Call NARFE at:

800-456-8410, Option 2

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

Cover Story 22

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Federal Workforce

Engagement Getting the Right Mix

Great places to work in federal government have certain ingredients in common. By Everett A. Chasen

It’s a tale of two governments, says Max Stier, president and chief executive officer of the Partnership for Public Service. “One part of our government has agencies with committed leaders who are fostering high and improving levels of employee engagement. The other part of our government is handicapped by a lack of leadership that has led to static or declining employee engagement.”

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

So, what exactly is employee engagement? The Office of Personnel Management (OPM) describes it as “an employee’s sense of purpose that is evident in their display of dedication, persistence and effort in their work or overall attachment to their organization and its mission.” It’s difficult to measure objectively, but OPM’s annual Federal Employee Viewpoint Survey (FEVS) is one source of measurable data. The Partnership for Public Service uses FEVS responses, as well as those of employees from 12 other agencies who completed surveys with similar questions during a comparable time frame, to create the annual “Best Places to Work in the Federal Government” (www.bestplacestowork. org). These rankings include the views of more than 847,000 civil servants from 488 different federal organizations on a wide range of workplace topics and offer key insights into employee engagement at federal agencies. The partnership’s mission is to identify opportunities to make government work better, offer solutions to fix government where it is broken, and collaborate with people inside and outside government to bring about change. In publishing the rankings, the Partnership aims to help agencies meet the challenges involved in driving sustainable employee engagement. The rankings, which have been published annually since 2003, are determined by index scores for each agency that measure employee engagement. The scores are derived from three FEVS questions and are calculated by averaging the percentage of positive responses to questions in 10 categories. These include effective leadership, the match between employee skills and the agencies’ missions, and work-life balance. Data from the FEVS also was weighted to represent all federal employees on demographic characteristics including age, gender, race, supervisory status, agency size and occupation. The survey results have a margin of error of plus or minus 1 percent. The statistical model used by the partnership is based on the same methodology used in CFI Group’s American Customer Satisfaction Index. Engagement scores are weighted according to a proprietary formula the partnership developed together with the former Hay Group (now Korn 24

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Ferry) in 2007. Regression analysis determines the categories with the most influence on overall engagement scores.

“BEST PLACES TO WORK” WINNERS AND LOSERS

Employee ratings in the survey had a maximum score of 100 points. Overall, federal employees rated their leadership at 56.4. The match between their skills and the mission of their agencies was rated at 77.3; their satisfaction with their pay ranked at 59.9; and their opportunities for training and development at 61.0. Other governmentwide scores included 67.8 for teamwork, 63.8 percent for innovation and 60.1 for diversity support. Federal employees rated their work-life balance at 61.4, and their opportunities for performance-based rewards and advancement at only 47.1. For the seventh consecutive year, the National Aeronautics and Space Administration (NASA) has been crowned “The Best Place to Work in the Federal Government.” Among the agencies, NASA’s overall score of 81.2 was an improvement of 0.3 points above its 2017 score. This placed NASA more than 10 points ahead of the Department of Health and Human Services, the agency that finished second in the large agency category. Rounding out the “top five” in large agencies were the Department of Commerce, the Department of Transportation, and the Intelligence Community. The Federal Trade Commission led the pack among midsize agencies, followed by the Federal Energy Regulatory Commission and the Securities and Exchange Commission. In the small agency category, the Federal Mediation and Conciliation Service finished first, with a score of 87.2—the highest score achieved by a federal agency of any size. They were followed by the U.S. International Trade Commission and the Congressional Budget Office. Agencies with 15,000 or more employees are included in the large agency category. Those with 1,000 to 14,999 employees are considered midsize agencies, and those with 100 to 999 employees are small agencies. A number of agencies did poorly in 2018. In the large agency category, the lowest overall

ranking was achieved by the Department of Homeland Security, whose score of 53.1 was nearly 30 points lower than NASA’s. The Department of Education placed lowest in the midsize agency category, and the Export-Import Bank of the United States scored only 36.8 in the small agency group—the lowest score of any government agency.

“Overall, according to the partnership, the federal government lags ‘well behind’ the private sector when it comes to employee engagement.” Among 415 agency subcomponents (subagencies, bureaus, divisions, centers and offices within agencies that have at least 100 employees), the two highest scores, both 95.0, were achieved by the Federal Energy Regulatory Commission’s Office of the General Counsel and by the Office of the Inspector General for the Tennessee Valley Authority. The lowest score of 13.7 was awarded to the Domestic Nuclear Detection Office of the Department of Homeland Security. A complete list of the agencies and subcomponents for which data are available can be found at bestplacestowork.org. The Partnership for Public Service noted that the 488 agencies and subcomponents surveyed were the most in the history of the rankings. It specifically cited improvements made by the Securities and Exchange Commission, which has improved its score by 26.1 points since 2012 and moved up in the midsize agency rankings from 19th place six years ago to third place in 2018. The National Transportation Safety Board also has improved its score steadily for the past five years. 26

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Several agencies saw negative trends continue. The Environmental Protection Agency’s score fell for the second year in a row, dropping 6.0 points to 57.5 in 2018. The Department of State fell from eighth place in 2017 to 14th place in 2018, dropping 3.3 points to a rating of 60.7. A precipitous decline in the midsize agency category was recorded by the Consumer Financial Protection Bureau (CFPB), which fell 25.2 points for a score of 51.7. CFPB is ranked 26th of 27 midsize agencies. Overall, according to the partnership, the federal government lags “well behind” the private sector when it comes to employee engagement. According to data provided by employee research firm Mercer|Sirota, the 2018 employee engagement score for private-sector employees is 77.1, 14.9 points higher than the governmentwide Best Places to Work score of 62.2. Employee engagement declined at 59.1 percent of federal organizations included in the rankings, while 39.6 percent registered increases, and 1.3 percent remained the same. In the previous three years, more than 70 percent of federal organizations experienced gains in how employees viewed their jobs and workplace-related issues. A sharp drop in employee satisfaction also occurred in what normally are the three strongest drivers of employee engagement: effective leadership, the match between employee

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skills and agency missions, and pay. In 2018, fewer than 50 percent of federal agencies registered increases in these three areas. This compares unfavorably to 2017, 2016 and 2015, when more than 70 percent of agencies and subcomponents experienced improvements on these issues. Only 46.4 percent of federal organizations showed improvement in 2018 compared to 75.8 percent in 2017, representing a 29.4 percentage point difference.

WHAT FEDERAL AGENCIES CAN DO TO IMPROVE

The Partnership for Public Service hopes that job seekers will use their Best Places to Work website as a resource—but that they also will understand there are many other factors to take into consideration when thinking about applying for a job. The survey is also useful for agencies trying to improve. The organization offers a number of resources, events and other assistance to help federal managers better understand their data and build a tailored plan to improve employee engagement. A 2013 publication, “Ten Years of the Best Places to Work in the Federal Government Rankings,” provides managers with several case studies on ways federal agencies improved employee satisfaction and commitment. Strategies for success listed in the pamphlet include: • Holding executives accountable for using employee survey data and using the data as a measure of their success; • Establishing effective working relationships with employee unions; • Designing and executing short-term activities to act on employee feedback that can contribute to longer-term culture change; • Committing to shared organizational values and aligning agency activities and employee interactions to those values; • Using multiple communication methods to connect employees to the mission, the agency and their co-workers; and • Developing employees through leadership, technical training and mentoring. “The leadership deficit should be of great concern to the White House, Congress and the American public,” says Stier. “It also should serve 28

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“Having a highly motivated and engaged workforce is critical to a well-functioning government and the success of our country.”

as a wake-up call for federal leaders across the government whose agencies have low or falling employee engagement scores.” Stier hopes federal government leaders will use the rankings and data as alerts to signs of trouble, and as a road map to better manage what the partnership calls government’s “most important asset”—its employees. Good federal leaders, he believes, not only focus on policy, but also place an emphasis on creating workplace conditions that foster improved government effectiveness and performance. They understand that the government competes with the private sector for the best talent, and it should endeavor to meet or exceed the employee engagement levels that are found in the best private-sector companies. One quote from the Best Places to Work report effectively summarizes the overall takeaway for agencies. “The 2018 data show an urgent need for federal agencies to improve the employee work experience—from training and developing leaders to ensuring employees have a positive work environment and the resources they need to do their jobs,” it says. “Having a highly motivated and engaged workforce is critical to a wellfunctioning government and the success of our country.” — EVERETT A. (EV) CHASEN IS A WRITER AND COMMUNICATIONS CONSULTANT IN THE WASHINGTON, DC AREA. HE IS RETIRED FROM THE FEDERAL GOVERNMENT AFTER 35 YEARS OF SERVICE.

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WiFi Capable. Callers do not need special equipment or a captioned telephone in order to speak with you. Finally… a phone you can use again. The Hamilton CapTel phone is also packed with features to help make phone calls easier. The keypad has large, easy to use buttons. You get adjustable volume amplification along with the ability to save captions for review later. It even has an answering machine that provides you with the captions of each message.

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Do you get discouraged when you hear your telephone ring? Do you avoid using your phone because hearing difficulties make it hard to understand the person on the other end of the line? For many Americans the telephone conversation – once an important part of everyday life – has become a thing of the past. Because they can’t understand what is said to them on the phone, they’re often cut off from friends, family, doctors and caregivers. Now, thanks to innovative technology there is finally a better way.

STATE TAX ROUNDUP

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TAX YEAR

TAX SEASON IS UPON US,

and throughout the country, millions of people are combing through tax documents looking for any break they can find. Fortunately for NARFE members, some of that work is done for you. Welcome to the latest edition of the State Tax Roundup. This informational guide can help ensure that you do not overlook any potential savings.

The NARFE team looked through every state’s tax code and placed relevant information in its comprehensive guide in the pages that follow to help make this tax season just a little bit easier. Be sure to share the roundup with fellow members, and tell other friends about it as well, so they can see how NARFE can work for them. Every state is a little bit different, but those differences can add up in the long run. If your state is not considered tax friendly, especially to retirees, options are available for you and your NARFE federation to take action. Take a deep look at the roundup and spot the differences among the states. It may inspire you to take action and work with your state legislators to enact change.

GET TO KNOW YOUR STATE’S TAX SITUATION You will notice that there are nine states with no personal income tax. In addition to those nine states, nine more exempt the total amount of civil service annuities from state income tax. An even deeper look reveals that five more states exempt certain civil service annuities from taxation. Just because your state does not fall into the aforementioned categories, do not assume that your state is not tax friendly. There are deductions and other exemptions to take into account. Of course, we cannot forget about other types of taxes, such as sales and property taxes. Every state is a little different, but NARFE members should take some time to understand their state’s taxes. Members may find opportunities to take action and drive change to reduce their overall tax burden.

THINGS TO CONSIDER

When was the last time that your state adjusted its income tax exemption? The issue of “bracket creep”—when

taxes increase over time because of inf lation—is not just an issue for tax brackets. It affects any issue defined by fixed dollar amounts, including income tax exemptions. There have been instances where states have gone decades without adjusting their income tax exemption. That exemption’s real value decreases with every passing year because of inflation, which essentially raises taxes on people without any change through legislation. For perspective, since 2010, inflation has risen by more than 15 percent, based on the Bureau of Labor Statistics’ Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI‑W). This index is used to determine costof-living adjustments to Social Security benefits and federal annuities. In less than a decade, costs have risen substantially, but have the states made any adjustments to reflect the changing times? Again, inflation can affect any issue defined by fixed dollars, so it also is wise to examine any tax breaks and their potential impact on a certain adjusted

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

2018 TAX YEAR

STATE TAX ROUNDUP

gross income. Look through the State Tax Roundup (which continues on p. 34) to see the latest information available on your state, including when it last adjusted its tax threshold. It may get you thinking.

TAKING ACTION ON TAXES

So you looked up your state in the roundup, read the tax information and did a little research into your state’s tax history. You may have found something that you want changed, and you are feeling inspired. You

Changing your state’s taxes can take time, but NARFE members should not falter. NARFE members have seen tax wins in states like Indiana, New Jersey, Missouri and Kansas.

and many other NARFE members in your state are thinking the same thing: It is time to take action. Luckily, NARFE has the infrastructure in place to start a grassroots movement, which is an added bonus of being a NARFE member. Each federation should have a state legislative chair that oversees state issues of concern to its members. Check your federation’s website to see if that person is listed. 32

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NARFE members can work on a wide variety of issues at the state level, many of which involve taxes. Need help making the next move? Check out the State Advocacy Toolkit on the grassroots page under the Advocacy department at www.narfe.org. Changing your state’s taxes can take time, but NARFE members should not falter. NARFE members have seen tax wins in states such as West Virginia, Indiana, New Jersey, Missouri and Kansas. Several federations, such as Iowa and Maryland, are working actively to improve their state taxes for seniors. Shortened state legislative sessions mean there is less time to take action in a given year, but that should not discourage you. It just means that you need to be prepared when heading into the legislative session to take action.

TAKE A LOOK

We hope you find this year’s State Tax Roundup useful and informative--and do note that it’s presented as information only, not tax advice. Again, you can share this information with your friends so they too can see the work and benefits that NARFE provides to its members. Taxes can change year to year, so do not miss out on any potential savings. Be sure to look not only at your state, but at others as well. You may be enlightened by the other tax situations present throughout the country—it may lead you on a path of action. NARFE exists as a resource for its members and will continue to advocate for all federal workers and retirees. If you have any questions about the State Tax Roundup, let NARFE know so we can be of assistance. —ROSS APTER, POLITICAL ASSOCIATE

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STATE TAX TREATMENT

States With No Personal Income Taxes ALASKA FLORIDA NEVADA

NEW HAMPSHIRE1 SOUTH DAKOTA TENNESSEE2

New Hampshire: Taxes interest/dividend income at 5% if it exceeds $2,400 (single) or $4,800 (couple). $1,200 exemption for residents age 65+ (see p.37).

TEXAS WASHINGTON WYOMING

2 Tennessee: Taxes certain interest/dividend income at 6% if it exceeds $1,250 (single) or $2,500 (couple). Individuals age 65+ have additional means-based exemption (see p. 39).

States Exempting Total Amount of Civil Service Annuities* ALABAMA HAWAII ILLINOIS

KANSAS LOUISIANA MASSACHUSETTS

MISSISSIPPI NEW YORK PENNSYLVANIA

* In addition, the five states listed below exempt certain federal civil service annuities from taxation. Some exemptions depend on the taxpayer’s age or dates of government service. KENTUCKY: Amount attributable to service prior to Jan. 1, 1998, is exempt. See p. 36 for taxation of annuities attributable to service on or after Jan. 1, 1998. MICHIGAN: Full exemption only applicable to taxpayers born before 1946. See p. 36 for taxation of federal (and other) pension income for taxpayers born in 1946 and later. NORTH CAROLINA: Annuities not taxed if the individual had five years of federal government service as of Aug. 12, 1989. 34

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If otherwise, see p. 38. OKLAHOMA: CSRS annuities excluded from taxation. Taxpayers with annuities with both FERS and CSRS components may exclude the portion attributable to CSRS service. OREGON: Annuities not taxed if individual retired before Oct. 1, 1991. Those who retired after Oct. 1, 1991, are taxed only on that portion of the annuity attributable to federal government service after Oct. 1, 1991.

2018

TAX YEAR

FEDERAL ANNUITIES Other Exemptions ALABAMA: SS, federal retirement, military retirement and state pension income are exempt. Income from all defined-benefit pension plans is exempt. Income on accounts like an IRA or 401(k) will be taxed as regular income. ARIZONA: SS is exempt. Up to $2,500 total of military, civil service, and Arizona state and local government pensions are exempt. Additional personal exemption for all residents age 65+. ARKANSAS: SS and military retirement benefits are exempt. Exempts up to $6,000 in federal retirement, in-state and out-ofstate state or local government and private pension income. IRA distributions can be included as part of the exemption if the taxpayer is age 59Â˝+. Out-ofstate government pensions also

Key to Abbreviations AGI=Adjusted Gross Income CSRS=Civil Service Retirement System FERS=Federal Employees Retirement System HH=Head of Household IRA=Individual Retirement Account MFJ=Married Filing Jointly MFS=Married Filing Separately QW=Qualified Widow(er) RR=Railroad Retirement* SS=Social Security *Federal law does not permit states to tax Railroad Retirement income. Exemption is not noted in roundup except where it affects provisions.

This roundup of state tax treatment of federal annuities and other tax information is presented for informational purposes only and does not constitute professional tax advice. NARFE has taken all reasonable efforts to ensure that the information contained in this roundup is accurate at the time of publication; however, NARFE cannot guarantee the completeness or accuracy of this information and is not responsible for any errors or omissions. Please consult a tax professional for advice in preparing tax returns. The information also is available on the NARFE website, www.narfe.org.

qualify for the exemption. CALIFORNIA: SS is exempt. Additional $118 personal exemption for residents age 65+. All private, public and military pensions are taxed. COLORADO: SS income that is not taxed by the federal government is exempt. $24,000 pension/annuity exemption for all taxpayers age 65+. $20,000 pension/annuity exemption for all taxpayers between the ages of 55 and 64. The same exemption applies to SS and other qualifying retirement income (including federal civil service annuities, military retirement and all out-of-state pensions). CONNECTICUT: SS is exempt if federal AGI is below $50,000 if single and AGI of $60,000 or less if MFJ. Military retirement pay is exempt. All out-of-state government and federal civil service pensions are fully taxed. DELAWARE: SS is exempt. Taxpayers age 60+ may exclude $12,500 of investment and qualified pension income, including federal civilian, military and out-of-state government pensions as well as IRAs and 401(k)s, and qualify for an additional tax credit of $110. Taxpayers under age 60 may exclude $2,000. Taxpayers age 65+ are entitled to an additional standard deduction of $2,500 (if not

itemizing). Single or MFS taxpayers age 60+ as of Dec. 31, 2018, or totally disabled, may exclude $2,000 if earned income is less than $2,500 and AGI is $10,000 or less. If MFJ and both spouses are age 60+ as of Dec. 31, 2018, or totally disabled, may exclude $4,000 if earned income is less than $5,000 and AGI is $20,000 or less. DISTRICT OF COLUMBIA: SS is exempt. For taxpayers age 62+, DC or federal government survivor benefits are exempt. Other retirement income is not exempt. State government and public pensions are taxed. For those born before Jan. 2, 1954, standard deductions increase by $1,300 for MFJ/MFS/QW and $1,600 for S/HH. GEORGIA: SS is exempt. Taxpayers who are age 62-64, or permanently and totally disabled regardless of age, may exclude $35,000 of retirement income. For taxpayers age 65+, the retirement income tax exclusion is $65,000. Retirement income includes income from pensions and annuities, interest income, dividend income, net income from rental property, capital gains income and income from royalties. Up to $4,000 of the maximum allowable exclusion may be earned income. HAWAII: SS is exempt. Federal retirement, military retirement, state or county retirement system W W W. N A R F E . O R G

pension income, and distributions from exclusively employer-funded pensions are exempt. Out-of-state government pensions are exempt. IRA and 401(k) distributions are treated as they are for federal taxes. Distributions to employer-funded pensions to which an employee also contributed are partially taxed. Additional personal exemption of $1,144 per person age 65+. IDAHO: SS is exempt. Retirement benefits deduction available for CSRS annuitants who established CSRS eligibility prior to 1984 and are age 65+, or 62+ and disabled, in the amount of $33,456 (if single) or $50,184 (if MFJ) minus SS and RR received. Deduction includes workers under the Foreign Service Retirement and Disability System (FSRDS). Retirement benefits deduction also available for military retirees. Persons using MFS status are not eligible for the retirement benefits deduction. Extra standard deduction for persons age 65+. ILLINOIS: SS and income from any qualified employee benefit plan are exempt (including federal government plans). Pension or retirement savings accounts like 401(k) plans, an IRA, or a traditional IRA that has been converted to a Roth IRA are exempt. Extra personal exemption for persons age 65+. INDIANA: SS is exempt. Taxpayers age 60+ may exclude as much as $5,000 of military retirement income. Taxpayers age 62+ may deduct up to $16,000 from a federal civil service annuity minus the total amount of any SS or RR benefits. Taxpayers age 65+ can take additional personal exemption of $1,000. Additional personal exemption of $500 if federal AGI is less than $40,000 for residents age 65+. 36

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IOWA: SS and military retirement benefits are exempt. Taxpayers age 55+ may exclude up to $6,000 (S, HH, QW) or $12,000 (MFJ or MFS) of pension or annuity income (including civil service annuities), self-employed retirement plan income, deferred compensation, IRA benefits or other retirement plan benefit income. Additional $20 exemption credit for those age 65+. KANSAS: SS is exempt if federal AGI is $75,000 or less. Federal, military and in-state/local pensions are exempt. Additional $850 deduction for those age 65+ ($700 each if MFJ or MFS). KENTUCKY: SS is exempt. Federal civilian and military retirement annuities attributable to service prior to Jan. 1, 1998, are excluded. Annuities attributable to service after Jan. 1, 1998, are included as pension income, of which taxpayers may exclude up to $31,110. An additional credit of $40 for each individual age 65+. LOUISIANA: SS is exempt. Federal retirement annuities are exempt. In addition, persons age 65+ may exclude up to $6,000 of annual retirement income from their taxable income, $12,000 if MFJ. MAINE: SS and military retirement benefits are exempt. May deduct from federal AGI $10,000 of eligible pension income, including federal civil service annuity income. Except for military retirement pay, the $10,000 deduction must be reduced for SS and RR benefits. MARYLAND: SS is exempt. If age 65+ or totally disabled, you may exclude up to $30,600 in pension income, under certain conditions. Additional $1,000 exemption for residents age 65+. Military retirement subtraction

up to $15,000 if 55+; $5,000 for those under age 55. To qualify for this subtraction, you must have been a member of an active or reserve component of the U.S. military, an active duty member of the commissioned corps of the Public Health Service, the National Oceanic and Atmospheric Administration, the Coast and Geodetic Survey, or a member of the Maryland National Guard, or the memberâ&#x20AC;&#x2122;s surviving spouse or ex-spouse. MASSACHUSETTS: SS, federal civil service and military pensions are exempt. Tax reciprocity with state and local governments that do not tax pension income from Massachusetts public employees. Additional exemption of $700 for individuals age 65+. MICHIGAN: SS and military pensions are exempt. Other pension and retirement benefits are taxed differently depending on the age of the taxpayer. Federal, state and local pensions are exempt for individuals born before 1946, as are private pension and retirement benefits up to $51,570 if filing single or MFS, or $103,170 if MFJ. Taxpayers born between 1947 and 1952 are able to deduct public and private retirement benefits up to $20,000 (S) or $40,000 (MFJ). Taxpayers born after 1952 cannot deduct retirement income. However, once taxpayers reach 67 years of age, they can take a standard deduction of $20,000 (S) or $40,000 (MFJ) from all income sources, subject to conditions that depend on whether they were born before or after 1952. Additional deductions exist for SS-exempt employment based on age and retirement date.

2018

TAX YEAR

MINNESOTA: Certain types of military pensions or other military retirement pay may be subtracted from taxable income. To claim this subtraction, the qualifying income must be included in federal taxable income. Taxpayers 65+ may be eligible for subtraction, based on income. MISSISSIPPI: SS and retirement income from federal, state and private retirement systems are exempt, along with qualified retirement income. Additional exemption of $1,500 for residents age 65+. MISSOURI: Military retirement income exempt. Taxpayers with AGI under $85,000 (single, HH, MFS, QW) or $100,000 (MFJ) may exempt the greater of $6,000 or 100 percent of any federal, state or local pension income, up to a maximum of $37,720 per taxpayer. Taxpayers with AGI exceeding the limitation may qualify for a partial exemption. Taxpayers with AGI under $25,000 (single, HH, QW) or $32,000 (MFJ) or $16,000 (MFS) may exempt $6,000 of private pension income. Taxpayers with AGI over these limits may be eligible for a partial exemption. Taxpayers age 62+ or disabled with an AGI under $85,000 (single, HH, MFS, QW) or $100,000 (MFJ) may exempt 100 percent of the taxable amount of SS or SS disability benefits. Taxpayers with AGI exceeding the limitation may qualify for a partial exemption. MONTANA: Taxpayers with AGI $34,820 or less may exclude $4,180 of pension income; for AGI above $34,820, the pension income exclusion is reduced $2 for every $1 exceeding that limit. Additional exemption if age 65+. Taxpayers age 65+ may exempt $800 ($1,600 if

MFJ) of interest income reported as federal AGI. NEBRASKA: Out-of-state government pensions are fully taxed. Taxpayers with AGI less than or equal to $58,000 MFJ or $43,000 for all other returns may deduct SS income. Military retirees may make a one-time election within two calendar years after the date of their retirement from the military. Military retirees can choose to exclude 40 percent of their military retirement benefit income for seven consecutive taxable years or can exclude 15 percent of military retirement benefit income for all taxable years beginning with the year the retiree turns 67. NEW HAMPSHIRE: SS is exempt. A 5 percent tax is applied only to interest and dividend income exceeding $2,400 ($4,800 for joint filers). Residents age 65+ qualify for $1,200 exemption for taxable dividends and interest. NEW JERSEY: SS and military pensions are exempt. Taxpayers age 62+ may exclude all or part of their

taxable pensions, annuities and IRA withdrawals if their gross income for the entire year before subtracting any pension exclusion does not exceed $100,000. The maximum amount excluded depends on filing status. For 2018, MFJ can exclude up to $60,000; S, HH, or QW, can exclude up to $45,000; and MFS, can exclude up to $30,000. Under certain conditions, additional amounts from retirement plans may be eligible for exclusion if both employee and employer contributed to the plans. Additional $1,000 personal exemption for residents age 65+. NEW MEXICO: Retirement benefits are taxed. Taxpayers age 65+ may qualify for income-dependent retirement tax exclusion of up to $8,000 if federal AGI is less than $28,500 (S), $51,000 (MFJ, HH, QW) or $25,500 (MFS). If age 100+, exempt from state income tax if centenarian is single. If MFS or MFJ, both must be 100+ for total exemption, or centenarian may exempt half of community income and all of his/her separate income.

SALT Changes Now in Effect

ast yearâ&#x20AC;&#x2122;s federal tax overhaul includes a change in your ability to deduct state and local taxes (SALT) from your federal taxes. The federal tax overhaul limits state and local tax deductions to no more than $10,000 of combined income, property and sales tax payments. This will be a big change for tax filers who previously itemized because of the SALT deduction. The change sets a cap for taxpayers who itemize and take the deduction, and as a result, you could have to pay more in federal taxes. Before the tax overhaul, those living in states with higher taxes benefited the most from this deduction, with many households deducting greater than $10,000. With this cap in place, individual households will have to weigh the new standard deductions ($12,000 for single filers and $24,000 for married couples) to determine whether it is best to itemize or not. W W W. N A R F E . O R G

NEW YORK: SS and state and federal pensions, including military and civil service, are exempt. An additional pension and annuity income exclusion of up to $20,000 is available to persons age 59½+. Out-of-state government pensions can be deducted as part of a $20,000 exemption. NORTH CAROLINA: SS is exempt. Pursuant to the North Carolina Supreme Court’s decision in Bailey v. State of North Carolina, the state may not tax certain retirement

benefits received by federal civil service and military retirees or retirees of the state of North Carolina and its local governments if the retiree has five or more years of creditable service as of Aug. 12, 1989. NORTH DAKOTA: Retirement income and out-of-state government pensions are fully taxed. OHIO: SS and military pensions are exempt. General retirement-income credit available starting at $25 if qualifying retirement income is at least $501; the credit tops out at $200

if qualifying retirement income is $8,000 or more. Residents age 65+ are entitled to a $50 tax credit per return. Taxpayers who served in the military and receive a federal civil service retirement pension are eligible for a limited deduction if any portion of their federal retirement pay is based on credit for their military service. These retirees can deduct the percentage (in terms of years of service) of the amount of their federal retirement pay that is attributable to their military service.

How High Are Sales Taxes in Your State? Combined State and Average Local Sales Tax Rates, Jan. 1, 2019

Note: City, county and municipal rates vary. These rates are weighted by population to compute an average local tax rate. Three states levy mandatory, statewide, local add-on sales taxes at the state level: California (1.25%), Utah (1.25%) and Virginia (1%). We include these in their state sales tax. The sales taxes in Hawaii, New Mexico and South Dakota have broad bases that include many services. Special taxes in local resort areas are not counted here. Salem County, NJ, is not subject to the statewide sales tax rate and collects a local rate of 3.3125%. New Jersey’s average local score is represented as a negative. DC’s rank does not affect states’ ranks, but the figures in parentheses indicate where it would rank if included.

Source: Sales Tax Clearinghouse, Tax Foundation calculations, State Revenue Department websites. Full report available at www.taxfoundation.org/sales-tax-rates-2019/ Credit: ©2019 Tax Foundation. Distributed under Creative Commons CC-BY-NC 4.0. Reprinted with permission.

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2018

TAX YEAR

Some Ohio municipalities tax federal but not state pensions. OKLAHOMA: SS is exempt. Each individual may exclude 100% of retirement benefits received from CSRS, including survivor benefits, paid in lieu of SS to the extent that these benefits are included in the federal AGI. Retirement benefits paid under FERS do not qualify for this exclusion. However, for retirement benefits containing both a FERS and a CSRS component, the CSRS component will qualify for the exclusion. Individuals may exclude their FERS retirement benefits or other qualifying retirement income up to $10,000. Individuals may exclude the greater of 75% of their military retirement benefits or $10,000. Additional personal exemption of $1,000 for age 65+ and federal AGI is $15,000 or less (single), $25,000 or less (MFJ), $12,500 or less (MFS), or $19,000 or less (HH). OREGON: SS is exempt. Federal pension income of those individuals who retired before Oct. 1, 1991, are not taxed. Those who retired after Oct. 1, 1991, are taxed only on that portion of the annuity attributable to government service after Oct. 1, 1991. TSP withdrawals made after retirement are eligible for subtraction based on dates of service. If the taxpayer moves money from a TSP to another type of account, the account loses its character and future withdrawals would not be eligible for subtraction. Taxpayers age 62+ may qualify for retirement income credit if household income is below $22,500 (or $45,000 if MFJ). Additional standard deduction if age 65+ of $1,200 (single, HH), $1,000 each spouse age 65+ (MFJ, MFS and QW).

PENNSYLVANIA: SS, TSP, federal civil service, military retirement benefits and other employersponsored retirement plan benefits are exempt. Distributions from a 401(k) plan, IRA, and Thrift Savings Plan if age 59Â˝+ are exempt. RHODE ISLAND: SS is only exempt for MFJ with federal AGI of $102,400 or less; $81,900 or less for single taxpayers. These income thresholds also apply to exempting up to $15,000 of qualified pension or retirement income for those age 65+. SOUTH CAROLINA: If under age 65, may deduct $11,700, but increases by $2,900 each year until it is fully phased in at $17,500 in 2020. SS is exempt. If below age 65, may deduct $3,000 of qualified retirement income (including federal retirement plans and military retirement). If 65+, may deduct $10,000 of qualified retirement income. All individuals age 65+ are entitled to a $15,000 (single) or $30,000 (MFJ) senior deduction from income, reduced by any deduction claimed for qualified retirement income. TENNESSEE: SS is exempt. Tax only applies to certain interest and dividend income, not wages, salary or pension income. An exemption of $1,250 ($2,500 if MFJ) is allowed against total taxable interest. Anyone age 65+ is exempt if total annual income from all sources is $37,000 or less ($68,000 or less for MFJ); those age 100+ are exempt regardless of income. UTAH: Taxpayers age 65+ may be entitled to a retirement credit of up to $450 ($900 MFJ). Taxpayers under age 65, born before Jan. 1, 1953, and with eligible retirement income may qualify for a credit up to 6 percent of eligible retirement income with a cap of $288. The

credit is phased out at 2.5 cents per dollar of modified AGI over $16,000 (MFS), $25,000 (single) and $32,000 (MFJ). VERMONT: SS only exempt for single filers making less than $45,000 a year ($60,000 MFJ); partially exempt with income up to $55,000 ($70,000 MFJ). All other retirement benefits are fully taxed. VIRGINIA: SS is exempt. Taxpayers age 65+ may claim an age deduction: Those born on or before Jan. 1, 1939, may claim an age deduction of $12,000. Those born between Jan. 2, 1939, and Jan. 1, 1951, will have the $12,000 deduction reduced by $1 for every $1 that federal AGI exceeds $50,000 (single) or $75,000 (MFJ, MFS). Additional personal exemption of $800 if age 65+. WEST VIRGINIA: Residents can exempt $2,000 of civil and state pensions. Additional exemption for military pension income up to $22,000. Taxpayers age 65+ may exclude the first $8,000 (S) or $16,000 (MFJ) of remaining nonexempt income. WISCONSIN: SS and military retirement benefits are exempt, as is retirement pay related to service with the Coast Guard or the respective commissioned corps of the National Oceanic and Atmospheric Administration or the Public Health Service. CSRS/FERS pay is exempt if the individualâ&#x20AC;&#x2122;s account was established prior to 1964 or if the individual is receiving payments from the system as a beneficiary of such an account. If age 65+, may exempt up to $5,000 of retirement income if federal AGI is less than $15,000 (S) or $30,000 (MFJ or MFS). Additional personal exemption of $700 and a deduction of $250 if age 65+. W W W. N A R F E . O R G

Managing Money

DEALING WITH INCAPACITY

n effective estate plan deals with far more than death. In fact, a properly designed estate plan also will provide the framework to ensure you’re taken

care of if you become incapacitated and can no longer make financial or healthcare decisions on your own. Last December, I hosted a NARFE webinar, “Worry-Free Estate Planning for Feds,” on estate planning. The webinar covered the key power of attorney documents necessary to help deal with incapacity. Another key thing to keep in mind, however, is that certain federal benefits do not recognize the typical power of attorney. As such, additional documentation is required to ensure that someone capable will be able to step in and help. Many married couples mistakenly believe their spouse will automatically be the person in charge of care and decision making, but that is not the case. Therefore, it is important for all, married or not, to have properly drafted documents to ensure that the person of choice is the one making legal, financial and health care decisions on the other’s behalf. It is best to have two different documents to provide authority over decision making—one for health care decisions, and the second for legal and financial decisions. Depending on the state, hospital or website being 40

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used, a person’s health care document may be referred to as a health care directive, advance medical directive, health care power of attorney or some other name. But regardless of the name, when properly drafted, these documents all will provide the framework for authorizing an individual to make health care decisions on the incapacitated person’s behalf. The financial power of attorney comes in two flavors—a durable power of attorney or a springing power of attorney— and the difference has to do with when the power of attorney becomes effective. With respect to the durable power of attorney, as soon as a person signs it, that individual’s agent has immediate authority to act on the person’s behalf, even if the individual is still capable of doing so independently. On the other hand, a springing power of attorney is one that “springs” into effect when a person no longer is capable of making legal and financial decisions independently. The inability to act for oneself typically is based on two doctors certifying that

BY MARK A. KEEN,

CFP®

the individual no longer is able to do so independently. When dealing with the federal government, such as the Department of Veterans Affairs, the Social Security Administration (SSA) or other federal benefits, the standard power of attorney document may not work. For example, the SSA website states, “The Treasury Department does not recognize power of attorney for negotiating federal payments, including Social Security or SSI checks.” Instead, the SSA requires someone to apply to become a representative payee, which is the person the SSA appoints to receive and manage the Social Security benefits for someone who cannot manage, or direct the management, of benefits independently. The Thrift Savings Plan (TSP) does allow a power of attorney, but it requires its own specific language in order for the power of attorney to be acceptable. The TSP provides sample language, which may be incorporated into a broader power of attorney document that an attorney drafts for the individual. Alternatively, that person may use the TSP’s own “Special Power of Attorney” form to designate a power of attorney. The TSP’s language permits a person to elect three levels of authority when assigning a power of attorney. At the most

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

basic level, the employee simply is granting an agent the ability to obtain information only. In addition to information, the individual also may grant the agent the ability to borrow or withdraw funds. At the highest level, the individual is giving the agent unlimited authority to conduct business with the TSP. For more information on powers of attorney and the TSP, refer to the TSP booklet Court Orders and Powers of Attorney located on the TSP website at www.tsp.gov/PDF/formspubs/tspbk11.pdf.

It is important to note that the power of attorney and health care power of attorney documents provide the framework for decision making only while the individual is living. Once the person dies, any power of attorney document is no longer effective. And, unless the person has made alternate arrangements through other estate planning documents, such as a will or trust, a court will determine who then controls the individual’s assets. An effective estate plan deals with both death and incapacity. It is critical that individuals review their estate plan to ensure they have accounted for their specific circumstances, including any specific requirements regarding federal benefits. MARK A. KEEN, CFP®, IS PARTNER, KEEN & POCOCK, AND AN INVESTMENT ADVISER REPRESENTATIVE AND REGISTERED PRINCIPAL OF THE STRATEGIC FINANCIAL ALLIANCE, INC. (SFA). SECURITIES AND ADVISORY SERVICES ARE OFFERED THROUGH SFA.

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

2018-2019

G FUND

F FUND

FEBRUARY

0.20%

-0.06%

JANUARY

0.23%

1.07%

DECEMBER

0.28%

1.84%

YTD

0.43%

1 YEAR

2.93%

3 YEAR*

C FUND

S FUND

I FUND

3.21%

4.98%

2.55%

8.01%

11.64%

6.60%

-9.03%

-10.70%

-4.82%

1.00%

11.48%

17.20%

9.32%

3.32%

4.66%

6.96%

-5.05%

2.38%

1.89%

15.27%

16.83%

9.73%

5 YEAR*

2.29%

2.64%

10.70%

8.16%

2.43%

10 YEAR*

2.30%

3.96%

16.72%

17.75%

9.99%

*ANNUALIZED

2018-19

L INCOME

L 2020

L 2030

L 2040

L 2050

FEBRUARY

0.80%

1.06%

2.00%

2.36%

2.68%

JANUARY

1.83%

2.53%

4.92%

5.86%

6.67%

-1.31%

-2.18%

-4.64%

-5.61%

-6.45%

YTD

2.64%

3.62%

7.02%

8.36%

9.53%

1 YEAR

2.97%

2.76%

2.62%

2.47%

2.34%

3 YEAR*

4.69%

7.16%

9.64%

10.86%

12.02%

5 YEAR*

3.59%

4.73%

5.94%

6.48%

6.92%

10 YEAR*

5.08%

9.32%

11.27%

12.58%

N/A

DECEMBER

*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

2018

’19

For the Record

RETURNS REFLECT IMPROVED INVESTOR OPTIMISM

THRIFT SAVINGS PLAN FUND RETURNS

Claims Received

Inventory Monthly FYTD (Steady State Average Processing Average Processing is 13,000) Time in Days Time in Days

JANUARY 14,590 20,467 FEBRUARY 13,290 24,225 MARCH 7,767 18,730 APRIL 8,390 17,489 MAY 7,625 18,024 JUNE 9,397 18,198 JULY 8,281 18,334 AUGUST 8,826 17,513 SEPTEMBER 7,142 17,628 OCTOBER 9,012 19,729 NOVEMBER 7,510 19,162 DECEMBER 5,782 18,019 JANUARY 13,264 23,121

63 46 49 58 58 65 57 56 64 63 70 60 58

63 59 57 57 58 59 59 58 59 63 67 61 60

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/. l Source: OPM 42

| APR

2 019

ecent weeks’ positive investor sentiment driven by favorable reports about Federal Reserve policy, corporate earnings growth, and hope for a trade deal carried over to February. Global stocks increased as a result. In the United States, technology and industrial companies did best, while small company stocks overall did better than large company stocks. International stocks improved despite concerns about slower growth in Europe and China. The C, S, and I Funds, as well as the L Funds, achieved gains. The F Fund had a small loss as interest rates trended higher. —BY SEAN MCCAFFREY, CHIEF

INVESTMENT OFFICER, THRIFT SAVINGS PLAN

COUNTDOWN TO COLA

he Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased by 0.14 percent in January 2019. To calculate the 2020 cost-of-living adjustment (COLA), the indices of July, August and September 2019 will be averaged and compared with the 2018 third-quarter average of 246.352. The percentage increase determines the COLA. January’s index, 245.133, is down 0.49 percent from the base. Benefits awarded under the Federal Employees’ Compensation Act (FECA) to individuals suffering workrelated injuries or illnesses are adjusted according to each calendar year’s percentage change in the CPI-W. January’s index is 0.14 percent higher than the December 2018 base index of 244.786.

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 246.352

OCTOBER 2018

247.038

0.19

0.28

NOVEMBER

245.933

-0.45

-0.17

DECEMBER

244.786

-0.47

-0.64

JANUARY 2019

245.133

0.14

-0.49

FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER

Donate to NARFE Programs Support Alzheimer’s Research WRITE YOUR CHAPTER NUMBER ON YOUR CHECK; MAKE IT PAYABLE TO: NARFE-Alzheimer’s Research AND MAIL TO: Alzheimer’s Association 225 N. Michigan Ave., 17th Floor Chicago, IL 60601-7633

YOUR CHARITABLE CONTRIBUTION IS TAX-DEDUCTIBLE TO THE FULLEST EXTENT ALLOWED BY LAW. Enclosed is my NARFE-Alzheimer’s contribution: $______________ Every cent that is contributed is used for research. Please circle: Mr.

Mrs.

Miss

Ms.

Name:____________________________________________________ Address:__________________________________________________ City:______________________________________________________ State:_____________________________________________________

NARFE MEMBERS CONTRIBUTED FOR ALZHEIMER’S RESEARCH: $13 Million Fund

$13,012,034.73*

*Total as of January 31, 2019 100 percent of all contributed funds go to Alzheimer’s research. If you have any questions, write to: NATIONAL COMMITTEE CHAIR Olivia Williams, 22 Garden Springs Road Columbia, SC 29209 EMAIL: oeashf3@gmail.com

Give to the NARFE-FEEA Fund

MAKE CHECK PAYABLE TO: NARFE-FEEA Fund PLEASE MAIL COUPON AND CHECK TO: FEEA 1641 Prince St. Alexandria, VA 22314

ZIP:______________________________________________________ Chapter Number:___________________________________________ Credit Card Information:

MasterCard

VISA

Discover

AMEX

Card Number:______________________________________________ Expiration Date:_____(mm)/____ (yy) 3-Digit Security Code:______ Signature:_______________________________ Date:___ /___ /____ Name: (please print)________________________________________

YES!

I would like to help with my contribution.

The NARFE-FEEA Fund supports NARFE members during disasters; provides scholarships to their children, grandchildren and great-grandchildren; and funds other programs to support NARFE members at the direction of NARFE and FEEA.

Enclosed is my NARFE-FEEA Fund Contribution: $______________ Name:____________________________________________________ Address:__________________________________________________ City:______________________________________________________

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

State:_____________________________________________________ ZIP:______________________________________________________ Email:____________________________________________________ To make credit card or e-check contributions, visit www.feea.org/ givenarfe.

NARFE News

NARFE PHOTO CONTEST: LAST CALL Submit your photograph to the 2019 NARFE Photo Contest. Winning entries will be feature in the NARFE 2020 calendar.

FEDS HELPING FEDS: NEW NARFE-FEEA FUND CREATED

n recognition of the evolving needs of NARFE members related to merit scholarships and disaster assistance, NARFE has entered into an updated memorandum of understanding with the Federal Employee Education and Assistance Fund (FEEA) to establish a new unified fund called the NARFE-FEEA Fund. The new NARFE-FEEA Fund will support a variety of requests for NARFE member financial assistance. NARFE and FEEA will jointly determine annually, based on available funds and volume of requests, how to allocate assistance. The NARFE-FEEA partnership dates back some 20 years, says FEEA Executive Director Joyce Warner. “This new agreement allows us to be there for NARFE members in new ways,” says Warner. The need for a new agreement was underscored by the 35-day partial government shutdown of 2018-2019. FEEA and NARFE offered microgrants to furloughed and excepted workers affected by the shutdown. More than 400 NARFE members received

| A P R

2019

The new NARFEFEEA Fund will support a variety of requests for NARFE member financial assistance, including disaster relief, scholarships and government shutdown grants. assistance from this program, but NARFE members who wanted to contribute assistance were stymied because NARFE, as a 501(c)(5) organization, cannot accept charitable donations directly. FEEA helps NARFE by administering the fund and managing disbursements. As it is a 501(c)(3) organization, FEEA can accept charitable donations that are fully tax-deductible; as a recognized hardship grant provider, it can help with disaster relief grants in ways that NARFE alone cannot. “The NARFE-FEEA partnership works every day to provide help and hope for our federal family by

Photos must be horizontal in format and 8" x 10" or 81/2" x 11" in size. Each member is limited to five photo entries (no photos of children or pets, please.) The deadline is April 8, 2019. For complete details on requirements and how to submit your photograph, visit www.narfe. org/photocontest.

responding to loss due to floods, fires or serious medical situations,” says NARFE President Kenneth J. Thomas. “It will allow us to provide financial grants during government shutdowns, as well as much needed financial assistance for college scholarships.” The new partnership also makes sure that charitable gifts to NARFE are being used to the fullest extent possible. Previously, with two separate funds for merit scholarships and disaster grants, a surplus in either fund could not be allocated to other purposes. “We at FEEA don’t want to tie up money,” explains Warner. “We want this money to go to programs that help people. With the NARFEFEEA Fund, we can make a plan each year based on resources to meet the needs of NARFE members.” Going forward, FEEA-related fundraising by NARFE members, chapters and federations should be for the unified NARFE-FEEA Fund only; separate donations for the merit scholarship and disaster relief programs will no longer be accepted. To donate, use the form on p. 43 or visit www.feea.org/ givenarfe.

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FEDERATION ELECTIONS 2019 FEDERATION

DATE(S)

WEBSITE/CONTACT FOR MORE INFORMATION

Arizona

Through April 15, 2019

www.narfeaz.com Etta Bryant, 520-578-0848, narfeazfp@gmail.com

Colorado

June 27 to June 28, 2019

www.narfe-colorado.com Frank Impinna, 303-482-1747, impinna@gmail.com

Delaware

April 1 to April 30, 2019

www.narfe-de.org Tom Sutor, 302-354-4654, TomSutor@aol.com Larry Trombello, 302-430-7689, Trombello@comcast.net

Illinois

Through April 15, 2019

www.narfe.org/site/il Note corrected contact information: Linda Glasgow, 618-288-2260, glasgowljg43@aol.com

Indiana

May 18, 2019

www.narfe.org/site/in Linda Keithley, 812-981-8178, keitll15@aol.com

Maryland

March 26 to April 15, 2019

www.mdnarfe.org Larry Walton, 443-831-1791, lrwalto@yahoo.com

Minnesota

Through April 20, 2019

www.narfe.org/site/mn Earl O.Knutson, 320-220-4444, eoknutson@gmail.com

Mississippi

April 6, 2019

www.narfe.org/ms Jerry Janci, 662-412-2029, lettermanj@aol.com

Virginia

May 1 to May 31, 2019

www.vanarfe.org Leslie E. Ravenell, 804-224-3069, Nell8211@gmail.com

Need to publish your Federation Election information in NARFE Magazine? Please email Precious Dorch-Robinson, NARFE communications assistant, at probinson@narfe.org with the issues youâ&#x20AC;&#x2122;d like to run your announcement in. Deadline for June issue: April 15. Remember to provide your federation name, date(s) of your election and any website or contact information.

| A P R

2019

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Active and Retired Federal Employees ...

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

• • • • •

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.

(0219)

NARFE’s Dues Withholding Program What is dues withholding? It is a dues-payment method that gives NARFE members (retirees) the option of having their annual NARFE membership dues deducted from their annuities on a monthly basis. Advantages • Save 15% off your annual NARFE dues! • Sign up your spouse and double your savings! • You’ll never get another dues reminder from us! • Your monthly payment is affordable and convenient! • You may cancel your dues withholding at any time!

How does it work? One-twelfth of your total dues is automatically deducted from your monthly annuity. Your monthly deduction is determined by the following formula: (NARFE dues ÷ 12) + (Chapter dues - if applicable ÷ 12) = Total Monthly Deduction How do I sign up? Complete the Dues Withholding Application below. Send no payment. It may take 60 to 90 days before auto-deduction starts. Your membership starts as soon as your application is received.

To learn more about dues withholding, call 800-456-8410. Retirees, spouses of retirees and annuitant survivors are eligible for dues withholding.

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

– Mr.

Mrs.

Civil Service Annuity Number

– Miss

C S

Ms.

–

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

Full Name ______________________________________

NARFE MEMBERSHIP INFORMATION

Street Address __________________________________

NARFE Membership ID ____________________________________

Apt./Unit _______________________________________

NARFE Chapter # (If applicable) _______________________________

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

yyyy

YES. I Also Authorize My (NARFE Member) Spouse’s Dues To Be Withheld From My Annuity. (Additional annual dues of $34 and, if applicable, chapter dues to be withheld annually.) If YES, enter spouse’s information below. Spouse’s Name ___________________________________________ ________________________________________________________ Spouse’s Membership ID ___________________________________

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

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

______________________________

Signature of Annuitant or Survivor-Annuitant

Date

Dues payments and gifts or contributions to NARFE are not deductible as charitable contributions for federal income tax purposes. MAIL THIS FORM TO: NARFE, ATTN: Member Records, 606 N. Washington St., Alexandria, VA 22314-1914 www.narfe.org 800-456-8410 rr@narfe.org Do not send money with this form

DW-2 (04/18)

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.

PUT YOUR NARFE MEMBERSHIP TO WORK

Money-saving discounts that benefit you. For a complete list of Member Perks, visit www.NARFE.org/memberperks

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INSURANCE: NARFE Insurance Services 1-800-233-5764 www.narfeinsurance.com

Plans administered by Mercer Health offering life, short term recovery, pet, travel, vision and hospital insurance policies.

Nationwide

1-855-550-9216 Discover how Nationwideâ&#x20AC;&#x2122;s suite of insurance solutions can help protect your financial future.

TRAVEL: Choice Hotels International 1-800-258-2847 www.choicehotels.com

Receive 20% off of your next stay when you use the special rate id 00801967.

Alamo 1-800-462-5266

www.alamo.com

Drive Happy with Alamo, where NARFE members receive year-round discounts using contract id 262544.

Avis 1-800-633-3469 www.avis.com

Avis has 5,500 locations worldwide. Get discounted rate using the AWD number A701900.

MemberDeals 1-877-579-1201

www.memberdeals.com/narfe

WELLNESS: Lifeline

1-800-324-9906 www.lifelinescreening.com/narfe Call and mention code BKHN075 or go online to schedule your health screening appointment.

Brookdale Senior Living 571-483-1265 www.brookdale.com

Discounts on memory care, independent and assisted living communities, and more throughout the U.S. Offer good on new move-ins only.

PERSONAL SERVICES: Office Depot/Office Max 1-855-337-6811, ext. 2897 www.officediscounts.org/narfe

Save up to 80% on more than 93,000 products. Shop online or in any Office Depot or Office Max Store.

ID Shield

571-830-5489 www.legalshield.com/info/narfe Monitor your identity from every angle. NARFE Members receive a discounted rate of $8.95 for individuals or $18.95 for families.

Exclusive discounts on nationwide attractions and entertainment. W W W. N A R F E . O R G

The Way We Worked

TRIMMING CURRENCY In this 1907 photo, women workers trim national bank notes for the U.S. Bureau of Engraving and Printing. The woman operating the machine on the left is processing $5 notes, while the employee on the right works on $20 bills. In 1862, faced with a diminished male workforce as a result of the Civil War, the U.S. Treasury Department initiated the first organized effort to hire women. These workers were tasked with trimming the excess paper that surrounded the printed currency by using machines that cut away the unwanted border. Producing printed money today is a long, intricate process that involves multiple steps: Sheets of printed currency are gathered into 100-count stacks before passing through two separate automated guillotine cutters. PHOTO from the Records of the Public Buildings Service, 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 SHFG, visit www.shfg.org. 52

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DID YOU KNOW? In 1862, the Bureau of Engraving and Printing (BEP) was founded in the Treasury Department. The BEP was known for trimming, separating and signing sheets of U.S. Demand Notes (paper money or U.S. dollars) for the Federal Reserve. The BEP expanded its production of U.S. dollars and, in 1869, started engraving and printing the seals and faces on Federal Notes. In addition to printing U.S. dollars, this bureau produces ID cards, awards certifications and military commissions. Today, the BEP is the largest manufacturer of government security documents and has production sites in Washington, DC and Fort Worth, Texas. On the web: www.moneyfactory.gov

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Your life is active. Your life is Your life is active. active. You deserve You You deserve deserve hearing aids that hearing aids hearing aids that that can keep up. can keep can keep up. up.

Pay nothing on over 250 hearing aid styles! Pay nothing on over 250 hearing aid Pay nothing on over 250 hearing aid styles! styles! Access all the newest & best technology at HearUSA. Access all the newest & best technology at Access all the newest & best technology at HearUSA. HearUSA. HearUSA offers more than 250 styles of hearing aids HearUSA offers more than 250 styles of hearing aids HearUSA offers more than 250 styles of hearing from every major manufacturer, available withaids no from every major manufacturer, available with no from every major manufacturer, available with no out-of-pocket expense for NARFE members with Aetna, out-of-pocket expense for NARFE members with Aetna, out-of-pocket expense NARFE members Aetna, Blue Cross Blue Shieldforand GEHA health with insurance. Blue Cross Blue Shield and GEHA health insurance. Blue Crossmembers Blue Shield and GEHA insurance. All NARFE are entitled to thehealth HearUSA Affinity All NARFE members are entitled to the HearUSA Affinity All NARFE members are entitled to the HearUSA Affinity Partner Discount Program! Partner Discount Program! Partner Discount Program! With more than 30 years in hearing care, HearUSA has With more than 30 years in hearing care, HearUSA has With more than 301years in people hearingexperience care, HearUSA has helped more than million a better helped more than 1 million people experience a better helped more than 1 million quality of life through better people hearing.experience a better quality of life through better hearing. quality of life through better hearing.

NARFE Member Exclusive NARFE NARFE Member Member Exclusive Exclusive • NARFE members may be entitled • NARFE members may be entitled * • NARFE members may be entitled to 2 FREE hearing aids! to 2 FREE hearing aids!** to 2co-pay FREE hearing • $0 for manyaids! plans! • $0 co-pay for many plans! •• $0 co-pay60-Day for many plans! Risk-Free Trial • Risk-Free 60-Day Trial •• Risk-Free 60-Day Trialbatteries Free 3-year warranty, • Free 3-year warranty, batteries • Free 3-year warranty, batteries & follow-up care & follow-up care & follow-up care

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HearUSA is the exclusive Affinity Hearing Care Partner for NARFE members. HearUSA is the exclusive Affinity Hearing Care Partner for NARFE members. The hearing aidsHearUSA NARFE members want withAffinity the outstanding service HearUSA is known for every step of the way. is the exclusive Hearing Care Partner for NARFE members. The hearing aids NARFE members want with the outstanding service HearUSA is known for every step of the way. The hearing aids NARFE members want with the outstanding service HearUSA is known for every step of the way.

*This is not insurance and insurance benefits vary. Some restrictions apply. 1 year battery supply with purchase of hearing aids. Offer valid at participating HearUSA providers only. Call for details. *This is not insurance and insurance benefits vary. Some restrictions apply. 1 year battery supply with purchase of hearing aids. Offer valid at participating HearUSA providers only. Call for details. *This is not insurance and insurance benefits vary. Some restrictions apply. 1 year battery supply with purchase of hearing aids. Offer valid at participating HearUSA providers only. Call for details.