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For Active and Retired Federal Employees

RETIREMENT LIFE

JANUARY 2011, Volume 87, Number 1

LEGISLATIVE REPORT 8 14 14 16 18 20 22 24

What NARFE Anticipates in the 112th Congress Bill Expanding Telework Goes to White House NARFE: Add Feds to Senior Relief Bill Medicare Fairness Bill Introduced Register Now for NARFE’s Legislative Conference Civics 101: Historic GOP Gains; Chambers Split NARFE’s Accomplishments, 111th Congress

COLUMNS 6 Message From the National President

36 Managing Money 38 Live Well

NARFE’s Legislative Program, 112th Congress

COVER STORY 28

40 46 50 51 54

Cover design by Jim Richards

The Fiscal Commission: For feds, a plan by the commission’s co-chairs would cut retirement and health benefits, freeze pay for three years and reduce the work force by 10 percent.

SPECIAL SECTION 32 New National Executive Board

NARFE Resources

DEPARTMENTS

Leg.Conference Registration . . .19

Questions & Answers

Membership Application . . . . . .47

NARFE News

Dues Withholding . . . . . . . . . . .49

Out & About

Alzheimer’s Coupon . . . . . . . . .50

Letters

NARFE Member Perks . . . . . . .52

For the Record: TSP Investments, COLA Chart

visit us online at www.narfe.org

NATIONAL OFFICERS JOSEPH A. BEAUDOIN, President natpres@narfe.org Editor Margaret M. Carter Assistant Editor Donna J. St. John Graphic Designer Beth Bedard Contributing Designers Charlene Gridley Jim Richards Editorial Board: Joseph A. Beaudoin Paul H. Carew Elaine Hughes Charles W. Saylor Editorial Office NARFE, Attn: NARFE magazine 606 North Washington St. Alexandria, VA 22314-1914 Phone: 703-838-7760 Fax: 703-838-7781 E-mail: rl@narfe.org National Headquarters NARFE Telephones Open 8 a.m.-4:45 p.m. (ET) Monday-Friday Telephone: 703-838-7760 Fax: 703-838-7785 E-mail: hq@narfe.org Toll-free phone numbers (specific use only) Member Records: 800-456-8410 Recruitment & Retention: 800-627-3394 Legislative Hotline: 877-217-8234 Advertising Sales Warren Berger Media People Inc. 122 East 42nd Street, Suite 725 New York, NY 10168 212-779-7172, ext. 223 E-mail: wberger@mediapeople.com Web site: www.narfe.org 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.

NARFE for the Visually Impaired On the Telephone: This publication can be heard on the telephone by persons who have trouble seeing or reading the print edition. For more information, contact the National Federation of the Blind NFB-NEWSLINEÂŽ service at 866-504-7300 or go to www.nfb newsline.org. On Tape: Issues of NARFE magazine are also available on cassette through the National Library Service for the Blind and Physically Handicapped. To find out about availability in your area, call 800-424-8567 and ask for the Reference Section.

PAUL H. CAREW, Vice President natvp@narfe.org ELAINE HUGHES, Secretary natsec@narfe.org CHARLES W. SAYLOR, Treasurer nattreas@narfe.org

REGIONAL VICE PRESIDENTS REGION I Gilbert W. Blaisdell (Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont) 3 Larnards Court Amesbury, MA 01913-3309 Tel: 978-388-1830 E-mail: narf1568@comcast.net REGION II Ronald P. Bowers (Delaware, District of Columbia, Maryland, New Jersey and Pennsylvania) 404 Kilree Road, #301 Timonium, MD 21093-7599 Tel: 410-308-0420 E-mail: narferbowers@msn.com REGION III Donald Stewart (Alabama, Florida, Georgia, Mississippi, Puerto Rico, South Carolina and Virgin Islands) 531 Sevilla Ave. Coral Gables, FL 33134-5714 Tel: 305-442-6388 E-mail: dejs33149@aol.com REGION IV Paul E. Johnson (Illinois, Indiana, Michigan, Ohio and Wisconsin) P.O. Box 234, 7183 Main St. Wadesville, IN 47638-0234 Tel: 812-306-5137 Fax: 812-673-4989 E-mail: pejohnson@tds.net REGION V Richard G. Thissen (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota) P. O. Box 485 Lake Ozark, MO 65049-0485 Tel: 573-365-5679 Fax: 573-964-5074 E-mail: rthissen99@msn.com

REGION VI Jerome S. Smith (Arkansas, Louisiana, Oklahoma, Republic of Panama and Texas) 5900 Raleigh Drive Tyler, TX 75703-5636 Tel: 903-534-5849 E-mail: retiredjer@aol.com REGION VII Betty Lucero-Turner (Arizona, Colorado, New Mexico, Utah and Wyoming) 4437 Turnberry Crescent Pueblo, CO 81001-1175 Tel: 719-583-0910 E-mail: blturner2311@aol.com REGION VIII Helen L. Zajac (California, Guam, Hawaii, Nevada and Republic of Philippines) 106 Cottonwood Drive Vallejo, CA 94591-5659 Tel: 707-644-7565 Fax: 707-644-5019 E-mail: hlz17@aol.com REGION IX Lanny G. Ross (Alaska, Idaho, Montana, Oregon and Washington) 7450 Illahee Road, NE Bremerton, WA 98311-9431 Tel: 360-692-9741 Fax: 360-662-0384 E-mail: lannyjean@comcast.net REGION X William F. Martin (Kentucky, North Carolina, Tennessee, Virginia and West Virginia) 294 Tyler Point Lane Bumpass, VA 23024-4633 Tel: 540-872-3345 Fax: 540-872-3445 E-mail: narfe2065@hughes.net

Volume 87, Number 1. 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. Non-member subscription rate $45.Postmaster:Send address change to: NARFE Attn:Member Records,NARFE 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. Contents of this magazine are copyrighted ÂŠ 2011. Advertisements in the magazine are not endorsements of products and/or services by NARFE, unless officially stated in the ad. We shall accept advertising on the same basis as other reputable publications: that is, we shall not knowingly permit a dishonest advertisement to appear in NARFE, but at the same time we will not undertake to guarantee the reliability of our advertisers.

JANUARY 2011 | NARFE

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A Message From the National President

Looking Back ... Looking Ahead

his is the first column of a new year, and I thought I’d take the opportunity to look back as we conclude 2010 and look ahead as we begin 2011. First, let me express my appreciation – and the appreciation of NARFE – to those who left office at the end of October 2010. I especially want to thank the three Headquarters officers – former President Margaret L. Baptiste, former Secretary Nathaniel L. Brown and former Treasurer Richard C. Ostergren. I have known each of them for many years and served with them at Headquarters for the past two. Their service to our Association has been invaluable. I’d also like to salute and thank for their NARFE service four members of the National Executive Board (NEB) who did not seek re-election: Augie Stratoti (Region I), Robert S. Harrell (Region III), Jerry D. Hatfield (Region VI) and Martha L. Leiker (Region VII). On page 32 of this issue of NARFE magazine, you will find a photo of the new NEB, which will work with you and for you for the next two years. As National President, I’d like to welcome each of them, especially those newly elected. Here at NARFE Headquarters, they are: National Vice President Paul H. Carew, National Secretary Elaine Hughes and National Treasurer Charles W. Saylor. In the field, new regional vice presidents (RVPs) are: Gilbert W. Blaisdell (Region I), Ronald P. Bowers (Region II), Donald Stewart (Region III), Jerome S. Smith (Region VI), Betty Lucero-Turner (Region VII) and William F. Martin (Region X). They join these RVPs who were re-elected at the National Convention: Paul E. Johnson (Region IV), Richard G. Thissen (Region V), Helen L. Zajac (Region VIII) and Lanny G. Ross (Region IX). I look forward to working with each of them during the next two years. As we look at the tasks ahead, perhaps the most daunting is working with the new 112th Congress, which convenes this month. We hope that we will have a Congress that is NARFE-friendly. But friendly or not, you can be cer-

tain that we will be working to continue to protect your earned benefits in 2011 and beyond. The results of the November midterm elections certainly changed the face of both houses of Congress, especially in the House of Representatives. Be assured that we, at Headquarters, are already in contact with these new members to solidify our relationship. NARFE will be facing a number of challenges in the months to come. As this issue of the magazine went to press, we were especially concerned by the proposal of the chairmen of the National Commission on Fiscal Responsibility and Reform – the “Fiscal Commission” – that could adversely affect NARFE members. (Please see p. 28 for our Cover Story on the Fiscal Commission.) In November, we used e-mail and telephone to urge members to contact their senators and representatives and oppose the Fiscal Commission co-chairs’ plan to cut their earned federal civil service retirement and health benefits, to freeze federal pay for three years and to reduce the federal work force by 10 percent. If you haven’t signed up for the “Rapid Response Team” by sending us your e-mail address so that we can quickly contact you, please consider doing so. Go to the Legislation Home Page on the NARFE Web site and sign up. Once again, I’d like to address our retention problem. For those members whose memberships are up for renewal and are either considering dropping their memberships because of the dues increase or would like to avoid the increase passed at the 2010 National Convention, here’s a money-saving tip for you. If you prepay your 2011 dues prior to March 1, you can renew at the 2010 rate – an $11 savings. Let me close by wishing all of you a healthy and happy New Year.

YOU CAN be certain that we will be working to continue to protect your earned benefits in 2011 and beyond.

Joseph A. Beaudoin natpres@narfe.org

JANUARY 2011 | NARFE

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LEGISLATIVE REPORT

What NARFE Anticipates in 112th Congress LeadershipWill Change in Key

s the 112th Congress made plans to convene on January 3, NARFE National President Joseph A. Beaudoin predicted a challenging two years ahead for the Association and its members. “We obvi-

ously have our work cut out for us in the need to educate lawmakers in a difficult fiscal atmosphere,” Beaudoin said. “Our earned retirement and health benefits have been viewed by some as ‘low-hanging fruit’ in the effort to balance the budget. The situation is exacerbated by antigovernment rhetoric that obscures the facts about federal employment and retirement. But we are up to the task.”

In the 2010 midterm congressional elections, the balance of power shifted in favor of Republicans, who took decisive control of the House of Representatives and reduced the Democrats’ majority in the Senate from 59 to 53 of 100 seats. During the 2010 campaigns, many candidates exploited the recession, fears about spending and the CATO Institute’s and Heritage Foundation’s flawed reports alleging that federal worker pay and benefits are overly

For coverage of the Fiscal Commission, please see p.28. 8

generous to unfairly attack federal employment and compensation. For example, in a September speech to a Cleveland, OH, audience, incoming House Speaker John A. Boehner, R-OH, said: “It’s just nonsense to think that taxpayers are subsidizing the fattened salaries and pensions of federal bureaucrats who are out there right now making it harder to create private-sector jobs.” In November, Boehner said, “There ought to be a freeze on the hiring of new federal employees, and, frankly, we ought to freeze the pay. The average federal worker makes twice as much as the average private-sector worker.” The Office of Personnel Management announced in October that the

House Panels ■ The 112th Congress will be

sworn in on January 3.In total, one-fifth of the new Congress will be freshmen. ■ The freshman class includes

25 military veterans – three in the Senate and 22 in the House of Representatives, according to Congressional Quarterly. ■ CQ also reports that the

average age of members of the 112th Congress is 62, compared with 63 in the 111th. Six percent of the House are under 40 years of age;for the Senate,2 percent. ■ For the first time,the country

will have a Democratic president,a Democraticcontrolled Senate and a Republican-controlled House at the same time.

LEGISLATIVE HOTLINE Toll-free! (24 Hours): 877-217-8234 Legislative Action Center: www.narfe.org JANUARY 2011 | NARFE

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Legislative Report pay advantage enjoyed by private-sector workers over federal employees grew to 24 percent in 2010, two percentage points higher than in 2009. Beginning several months prior to the elections, incoming Majority Leader Eric I. Cantor, R-VA, began encouraging visitors to his Web site to vote on five specific proposals to cut federal spending. Rep. John A. Boehner Cantor hosts the site at http://republican whip.house.gov/YouCut. In July, a proposal to cut federal civilian retirement annuities by basing them on the highest five years of salary – instead of the highest three years – was ranked as the second most popular reduction option on his Web site. In May, Cantor’s site proposed to deny federal workers a modest Rep. Eric I. Cantor 1.4-percent pay raise in 2011. Their leaders’ statements to the contrary, key majority members like Rep. Frank R. Wolf, R-VA, have worked for decades on a bipartisan basis on behalf of federal workers and annuitants. Most recently, Wolf and 13 of his Republican colleagues, including Reps. Shelley Moore Capito, WV; Robert J. Wittman, VA; Brian P. Bilbray, CA; Steven C. LaTourette, OH; Thaddeus G. McCotter, MI; and Dave Reichert, WA, demonstrated their support for the federal family by voting for federal worker telework legislation on November 18 (see story, p. 14). Now in the minority, the House Democratic Caucus in November selected Rep. Steny H. Hoyer, D-MD, as Minority Whip. Historically, Hoyer has played a significant role in NARFE’s legislative accomplishments since he was first elected to the House in 1981.

HOUSE GOVERNMENT REFORM COMMITTEE The new House leadership plans to change the name of the committee with jurisdiction over all federal civil service law from the Committee on Oversight and Government Reform to the Committee on Government Reform and Oversight. Rep. Darrell E. Issa, R-CA, will replace Rep. Edolphus Towns, D-NY, as chairman. Rep. Darrell E. Issa Issa said that he plans to devote considerable attention to oversight of the Obama administration. And the new chairman has signaled interest in holding oversight

STORY HIGHLIGHTS ■ Having gained a majority in the House in the

November elections,Republican members now assume leadership roles. The new House leadership has signaled that federal employees and retirees will be targets of their budget-cutting efforts. ■ House committees of key interest to NARFE will have new chairs,including the Government Reform Committee and the Budget Committee. ■ Senate committees probably will have fewer changes in leadership. hearings into the Postal Service’s financial problems. On October 29, former Government Reform Committee Chairman and NARFE champion Thomas M. Davis III told Government Executive magazine: “Darrell will be pro-federal employee, but he will not be pro-union.” Issa will be “a friend to federal executives in giving them the right tools they need to get the job done,” Davis added. That means pay reform would likely be on the new chairman’s agenda. Given NARFE’s nonpartisan status, the Association is in a strong position to represent the interests of federal workers and annuitants with Issa and other new majority leaders. At press time, Rep. Jason Chaffetz, R-UT, was next in line to become chairman of the Subcommittee on the Federal Workforce. However, Chaffetz could exercise his seniority rights to choose a subcommittee with a different jurisdiction or leave the Government Reform and Oversight Committee to serve on another panel. In addition, it was unclear if subcommittee jurisdictions would be shifted by Issa. Rep. Jason Chaffetz During the 111th Congress (20092010), Chaffetz introduced legislation that would have required the government to fire federal workers if the Internal Revenue Service placed a tax lien on them. Chaffetz has said, “I believe we’re paying too many people [federal workers] too much money.” In November, he told Washington-based WTOP radio that he would freeze federal pay and cut it by 10 percent. Chaffetz also supports a cut in the size of the federal work force, but says it could be achieved through consolidation and attrition. Chaffetz is interested in postal reform and would reduce the Postal Service’s expenses by closing 150 of 300 distribution centers and a significant number of post offices. Chaffetz’s staff told federal-postal coalition representatives in November that silence from federal and postal emJANUARY 2011 | NARFE

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Legislative Report ployees and retirees will be taken as approval for his civil service proposals. “We know that there can be a difference between ‘heat of the moment’ campaigning and the practicality of governing,” said NARFE’s Beaudoin. “NARFE stands ready to work with members of Congress from both sides of the aisle. And it is our intention to educate lawmakers, particularly freshman members, about the value federal workers add to the daily lives of all Americans. We also want to set the record straight about earned federal civil service wages, retirement and health benefits.”

HOUSE BUDGET COMMITTEE Rep. Paul Ryan, R-WI, will be the new chairman of the House Budget Committee. He is the author of several substitute budget resolution amendments that have included instructions to cut federal civilian retirement and health benefits – most recently in 2009, when he proposed $10 billion in reductions over 10 years. In his “Roadmap for America,” the new chairman suggested that Medicare Rep. Paul Ryan and Medicaid be privatized by giving beneficiaries vouchers to buy health insurance on the private market. Ryan also supports the partial privatization of Social Security. A long-time NARFE ally, Rep. Chris Van Hollen Jr., D-MD, was selected by his Democratic colleagues in November to be the ranking member on the Budget Committee. The House Budget Committee would be on the front lines of Congress’ response to spending-cut and revenueraising recommendations made by the National Commission on Fiscal Responsibility and Reform. All or part of the commission’s suggestions could be included in the budget resolution, which sets Congress’ fiscal roadmap for the annual budget process. Usually, the budget resolution is considered in April, but it could be taken up earlier, particularly if a Republican majority follows the lead of their predecessors who took control of the House in 1995.

SENATE CHANGES Changes in the Senate will be less dramatic than in the House since Democrats will retain control, albeit with a slimmer majority – 53 out of 100 senators. Sen. Joseph I. Lieberman, I-CT, will remain chairman of the Senate Committee on Homeland Security and Governmental Affairs, which has jurisdiction over federal civil service law.

BREAKING NEWS

NARFE Disappointed in Pay-Freeze Proposal

ARFE President Joseph A. Beaudoin reacted with disappointment to President Obama’s call for a two-year pay freeze for civilian federal workers. “We understand the purpose of shared sacrifice. But federal employees and their families once again are being singled out,” said Beaudoin. “This action comes at a time when the federal government can ill afford to put recruitment and retention at risk.Indeed,freezing or cutting pay sends the wrong signal to the best and brightest workers federal agencies will need in these difficult times.” Sen. Susan M. Collins, R-ME, will continue to be the full committee’s ranking minority member. Both Lieberman and Collins have been supportive of the federal-postal community. Another NARFE friend, Sen. Daniel K. Akaka, D-HI, is likely to remain as chairman of the Senate Subcommittee on the Federal Workforce. However, Akaka could exercise his seniority rights to choose a subcommittee with a different jurisdiction, or subcommittee jurisdictions could be shifted, with Akaka’s subcommittee no longer overseeing federal civil service law. The outgoing subcommittee ranking member and federal-friendly lawmaker Sen. George V. Voinovich, R-OH, has retired. The new ranking member would likely be one of the current Republican members of the committee, including Sens. Collins; Lindsey Graham, R-SC; John McCain, R-AZ; John Ensign, R-NV; or Tom Coburn, R-OK.

SENATE BUDGET COMMITTEE Like its House counterpart, the Senate Committee on the Budget will play a key and early role in deciding whether to include all or part of the Fiscal Commission’s recommendations in the annual budget resolution. Sen. Kent Conrad, D-ND, is remaining as the Budget Committee chairman. However, outgoing ranking member Sen. Judd Gregg, R-NH, is retiring and is likely to be replaced by Sen. Jeff Sessions, R-AL. In the event that Senate Republicans look for an alternative to Sessions, Sens. Mike Crapo, R-ID; Ensign; John Cornyn, R-TX; Graham; and Lamar Alexander, R-TN, are next in line.

By Dan Adcock,Legislative Director,and Alan Lopatin,Legislative Counsel JANUARY 2011 | NARFE

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Legislative Report

Bill Expanding Telework for Feds Goes to White House for Signature

n November 18, the House passed and sent to President Obama a bill that will expand opportunities for federal employees to work from outside of the office, from home or

elsewhere. H.R. 1722, the Telework Enhancement Act of 2010, will require executive branch agencies to establish policies allowing eligible employees to telework. The legislation defines telework as “a work flexibility arrangement under which an employee performs the duties and responsibilities of such employee’s position, and other authorized activities, from an approved worksite other than the location from which the employee would otherwise work.” The bill was introduced March 25, 2009, by Reps. John P. Sarbanes, D-MD; Gerry E. Connolly, D-VA; Danny K. Davis, D-IL; Stephen F. Lynch, D-MA; James P. Moran, D-VA; C. A. “Dutch” Ruppersberger, D-MD; and Frank R. Wolf, R-VA. The vote in the House was 254-152, with 240 Democrats and 14 Republicans voting in favor of the bill, and three Democrats and 149 Republicans voting against the measure. The Senate passed the bill on September 29 by unanimous consent. During the House debate, bill sponsors argued that by expanding telework, the bill would boost productivity; im-

STORY HIGHLIGHTS ■ The House has passed and sent to President

Obama a bill to expand telework opportunities for federal employees. ■ Executive branch agencies must establish policies allowing eligible employees to work from“an approved worksite other than the location from which the employee would otherwise work.” ■ President Obama is expected to sign the bill. prove the recruitment and retention of federal employees by increasing the flexibility of their work schedules; save overhead costs for office space; lower absenteeism; reduce commuting costs, traffic congestion and pollution; and improve the ability of the federal government to maintain operations in the case of emergency or inclement weather. Agencies will be required to establish a telework policy and determine employee eligibility within 180 days of the bill becoming law. At press time, President Obama was expected to sign the legislation into law. Prior to the House vote, NARFE joined other federal and postal employee and retiree organizations in a letter urging all 435 representatives to vote for the legislation.

By John Hatton,Legislative Specialist

NARFE: Add Feds to Senior Relief Bill

t press time, the House was supposed to take up legislation in December that would provide a one-time $250 payment to Social Security recipients, veterans and individuals with disabilities (recipients of disability insurance under Social Security). On October 14, outgoing House Speaker Nancy Pelosi, D-CA, announced that the bill, H.R. 5987, the Seniors Protection Act, would be considered during the lame-duck session before the end of the 111th Congress (2009-2010). The payment was proposed in anticipation of the official news delivered on October 15 by the Bureau of Labor Statistics that there will be no cost-of-living adjustment (COLA) in 2011 as a result of economic conditions.

STORY HIGHLIGHTS ■ In the lame-duck session,the House planned to take

up legislation to grant seniors a $250 payment in lieu of a Social Security COLA in 2011. ■ NARFE and its coalition partners kept up pressure on Congress to include relief for public service retirees,including federal retirees,who are not eligible for Social Security benefits and who also will not get a 2011 COLA. They said it was a“matter of equity.”

Unfortunately, the bill left out more than one million federal, state and local government retirees who are not JANUARY 2011 | NARFE

Legislative Report eligible to receive Social Security benefits. By way of precedent, during the consideration of the American Recovery and Reinvestment Act of 2009, retired public employees were initially excluded from a $250 payment to Social Security recipients, but later – with the assistance of Sens. John F. Kerry, D-MA, and Max Baucus, DMT, and through NARFE’s efforts – a $250 refundable tax credit for public service retirees was included in the legislation that became law in February 2009. On October 15, NARFE asked members to write and call

their lawmakers to ensure that all federal, state and local government retirees were included in the legislation. In a joint letter initiated by NARFE, 16 public service employee/retiree organizations urged the House leadership in November to ensure that the Seniors Protection Act included equivalent relief for federal, state and local government retirees who are not eligible to receive Social Security. They said that “offering relief to all older Americans – retirees of both the private and public sectors – is a matter of equity.”

By Dan Adcock,Legislative Director

Medicare Fairness Bill Introduced

he Medicare Premium Fairness Act, S. 3950, a bill introduced November 17 by Sen. John F. Kerry, D-MA, would protect all Medicare beneficiaries – including federal civil service annuitants who are not eligible to receive Social Security – from an increase in their Part B premium in 2011, when they will not receive any cost-of-living adjustment (COLA). NARFE built support for the bill by encouraging 20 organizations representing more than 31 million federal, state and local government workers and retirees to endorse the legislation. The Centers for Medicare & Medicaid Services announced in November that most Medicare beneficiaries will continue to pay the same $96.40 premium they have paid since 2008. Under present federal law, about 73 percent of Medicare beneficiaries are not required to pay — or are “held harmless” — for the increase in Part B premiums in any year when they receive no Social Security COLA. However, more than a million public service retirees not eligible for Social Security benefits will pay $115.40 a month in 2011. “This bill is about equity for all Medicare beneficiaries because, without it, federal, state and local government retirees who are not Social Security-eligible would have to pay the Part B rate hike in a no-COLA year, while Social Security

Phone Numbers to Know

ARFE members should keep this information by their telephones: CapitolToll-free:866-220-0044 NARFE Legislative HotlineToll-free:877-217-8234

STORY HIGHLIGHTS ■ Sen.John Kerry has introduced a bill that would

protect all Medicare beneficiaries from an increase in Part B premiums in 2011. ■ Under current law, most Medicare beneficiaries are not required to pay for the increase in any year they do not receive a Social Security COLA.But public service retirees are not covered by this law. ■ NARFE encouraged 20 other organizations to push for Kerry’s bill,and the Association asked for speedy enactment of the legislation to allow time to make processing adjustments. beneficiaries would not,” said NARFE President Joseph A. Beaudoin. “We applaud Sen. Kerry for taking the lead on this important legislation.” Similar legislation passed the House by a vote of 406-18 in September 2009 but stalled in the Senate. “We urge the Senate to speed consideration of Sen. Kerry’s bill to ensure that the Centers for Medicare & Medicaid Services has enough time to adjust its processing systems to prevent federal annuitants and other retirees from paying the premium increase before it becomes effective in January 2011,” added Beaudoin. At press time, S. 3950 was being considered in the lameduck session of the 111th Congress (2009-2010), and its prospects were uncertain. For the latest developments on this and other important bills, NARFE members should consult the NARFE Legislative Hotline. The weekly Hotline is available by e-mail to members who include their e-mail address in their membership record; on the NARFE Web site at www.narfe.org; and by phone toll-free at 877-217-8234.

By Dan Adcock,Legislative Director

JANUARY 2011 | NARFE

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Legislative Report

he election results are in, the Fiscal Commission’s recommendations have been released, pressures continue on the economy and high unemployment persists. All of this leaves the newly sworn-in Congress overwhelmed with suggestions. Now is the time for the federal community to step up and begin educating members of Congress about federal benefits programs. The 2011 NARFE Legislative Training Conference is a prime place to begin. The conference will be Saturday, March 5, through Tuesday, March 8, at the Hyatt Regency Crystal City in Arlington, VA. The biannual conference will brief NARFE members on the issues facing the federal community, NARFE’s legislative agenda and the overall political process in Washington. The conference will include plenary sessions with multiple guest speakers and break-out training sessions, all designed to help NARFE members become first-class advocates and advocacy trainers. Participants will spend the final day of the

conference, March 8, on Capitol Hill speaking with their members of Congress. The conference registration fee is $175, which includes three buffet breakfasts, two full lunches, one buffet dinner (full dinner), training materials and transportation to and from the U.S. Capitol on Tuesday. Register by completing the form on the opposite page and returning it to NARFE Headquarters or by going online to www.narfe.org/legislation. The 2011 NARFE Legislative Training Conference daily room rate will be $159 plus 10.25 percent state and local occupancy taxes, for a total of $175.30 (single- and doubleroom occupancy). Call the Hyatt Regency Crystal City at 888-421-1442 to make a room reservation or go to the NARFE Web site for a link to online room reservations. Be sure to specify that it is for the National Active and Retired Federal Employees Association Legislative Training Conference. To guarantee the NARFE rate, please make your reservation no later than February 8. ■

JANUARY 2011 | NARFE

March 5-8, 2011

Registration must be returned by February 8, 2011.

Registration Form Name:

J Mr.

J Mrs.

J Miss

_______________________________

J Ms.

Membership #_____________________________

________________________

Last

___________________________

First

Middle

Name as you would like it on badge: __________________________________________________________ Federation or chapter officer title for your badge (choose only one title): ________________________________________________________________________________________ Home address: ____________________________________________________________________________ ___________________________________________ Cell Phone: _________________________________ Phone number:_______________________________ E-mail address:______________________________ Notify in case of emergency: ________________________________________________________________ Name

Phone number

Address: _________________________________________________________________________________

$175 registration fee is not refundable. Please complete registration form and return with check made payable to NARFE, or charge to your credit card. Mail to: NARFE Conference, Budget & Finance 606 North Washington St. Alexandria, VA 22314-1914 Please Note: Conference meals and events are for registered attendees. Registered attendees may bring guests to NARFE-provided meals for a separate fee. Will you have a guest(s) (who is not registering) attend any meals? J Yes J No Name of Guest(s)____________________________ __________________________________________ Please add the amount of $175 per guest to your registration check or charge. NARFE | JANUARY 2011

J Charge to my credit card $____________ J MasterCard

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For Internal Planning Purposes Only-This is NOT a Reservation. Do you plan to ride the NARFE-provided bus to Capitol Hill on March 8th? J Yes J No Do you plan to return to the hotel from Capitol Hill on the bus later that afternoon? J Yes J No Desired Return Time:* J 12:30 PM J 2:30 PM

J 3:30 PM

*These times will not necessarily be offered.

Legislative Report CIVICS 101:

THE INFORMED CITIZEN

Historic GOP Gains; Chambers Split

STORY HIGHLIGHTS

t press time, three House races were still undecided. Republicans gained six Senate seats by winning currently Democratic seats in Arkansas, Illinois, Indiana, North Dakota, Pennsylvania and Wisconsin. Republicans gained at least 63 House seats – possibly two more – easily enough to “control” the majoritarian House of Representatives. Only two congressional districts saw incumbent Republicans defeated (HI1 and LA-2). In only one other race – the open seat in Delaware – will there be a first-term Democrat.

members should be among the first to congratulate and meet with their member-elect. Offer to help in the transition from candidate to lawmaker. Send an open-ended invitation to address a group of chapters. Be flexible as to when and where. Remember: Most freshman members of Congress know little or nothing about federal worker or retiree issues.

HISTORIC MAGNITUDE

STATES ELECTING NEW MEMBERS

If the net gain for Republicans in the House is 65, it would be the third largest seat change for the party out of power in midterm elections since 1914. The only larger swings in the House were the 76-seat gain by Democrats in 1922 and the 81-seat gain by Republicans in 1938. The six Senate seat gain ranks in eighth place. Until they are sworn in, the first-time winners will divide their time between Capitol Hill and their districts. Many will retain a campaign office, Web site and phone number. NARFE

Listed below are the 42 states that elected someone other than the incumbent. Many were seats left open by the retirement, primary defeat or run for other office of the incumbent. These incumbents are listed in parentheses. Names that are all in CAPITALS denote the winner. Names in BOLD CAPITALS indicate a party takeover. An asterisk denotes the 20 members defeated in their first bid for reelection. The three UNDECIDED House races are in italics.

AL-02* Bobby Bright (D) vs MARTHA ROBY (R) AL-05* (Griffith) Steve Raby (D) vs MO BROOKS (R) AL-07 (Davis) TERRI A. SEWELL (D) vs Don Chamberlain (R) AR-01 (Berry) Chad Causey (D) vs RICK CRAWFORD (R) AR-02 (Snyder) Joyce Elliott (D) vs Tim Griffin (R) AR-03 (Boozman) David Whitaker (D) vs STEVE WOMACK (R) AR Senate Blanche L. Lincoln (D) vs JOHN BOOZMAN (R) AZ-01* Ann Kirkpatrick (D) vs PAUL GOSAR (R) AZ-03 (Shadegg) Jon Hulburd (D) vs BEN QUAYLE (R) AZ-05 Harry Mitchell (D) vs DAVID SCHWEIKERT (R) CA-11 Jerry McNerney (D) vs David Harmer (R) UNDECIDED CA-19 (Radanovich) Loraine Goodwin (D) vs JEFF DENHAM (R) CA-20 Jim Costa (D) vs Andy Vidak (R) UNDECIDED CA-33 (Watson) KAREN BASS (D) vs James Andion (R) CO-03 John Salazar (D) vs SCOTT TIPTON (R) CO-04* Betsy Markey (D) vs CORY GARDNER (R) CT Senate (Dodd) RICHARD BLUMENTHAL (D) vs Linda McMahon (R) DE-AL (Castle) JOHN CARNEY (D) vs Glen Urquhart (R) DE Senate (Kaufman) CHRISTOPHER COONS (D) vs Christine O’Donnell (R) FL-02 Allen Boyd (D) vs STEVE SOUTHERLAND (R) FL-05 (Brown-Waite) Jim Piccillo (D) vs RICHARD NUGENT (R) FL-08* Alan Grayson (D) vs DAN WEBSTER (R) FL-12 (Putnam) Lori Edwards (D) vs DENNIS ROSS (R) FL-17 (Meek) FREDERICA WILSON (D) vs Roderick Vereen (R) FL-22 Ron Klein (D) vs ALLEN WEST (R) FL-24* Suzanne Kosmas (D) vs SANDY ADAMS (R) FL-25 Joe Garcia (D) vs DAVID RIVERA (R) FL Senate (LeMieux) Kendrick Meek (D) vs Charlie Crist (I) vs MARCO RUBIO (R)

■ Here is a listing of the districts and states in which

new members of Congress were elected.

By Christopher Farrell,Legislative Representative GA-07 (Linder) Doug Heckman (D) vs ROB WOODALL (R) GA-08 Jim Marshall (D) vs AUSTIN SCOTT (R) HI-01 COLLEEN HANABUSA (D) vs Charles Djou (R) ID-01* Walt Minnick (D) vs RAUL LABRADOR (R) IL-08 Melissa Bean (D) vs JOE WALSH (R) IL-10 (Kirk) Dan Seals (D) vs ROBERT DOLD, Jr. (R) IL-11* Deborah Halvorson (D) vs ADAM KINZINGER (R) IL-14 Bill Foster (D) vs RANDY HULTGREN (R) IL-17 Phil Hare (D) vs ROBERT T. SCHILLING (R) IL Senate (Burris) Alexi Giannoulias (D) vs MARK STEVEN KIRK (R) IN-03 VACANT Thomas Hayhurst (D) vs MARLIN A. STUTZMAN (R) IN-04 (Buyer) David Sanders (D) vs TODD ROKITA (R) IN-08 (Ellsworth) Trent Van Haaften (D) vs LARRY BUCSHON (R) IN-09 Baron P. Hill (D) vs TODD YOUNG (R) IN Senate (Bayh) Brad Ellsworth (D) vs DANIEL R. COATS (R) KS-01 (Moran) Alan Jika (D) vs TIM HUELSKAMP (R) KS-03 (Moore) Stephene Moore (D) vs KEVIN YODER (R) KS-04 (Tiahrt) Raj Goyle (D) vs MIKE POMPEO (R) KS Senate (Brownback) Lisa Johnson (D) vs JERRY MORAN (R) KY Senate (Bunning) Jack Conway (D) vs RAND PAUL (R) LA-02* CEDRIC L. RICHMOND (D) vs Anh Joseph Cao (R) LA-03 (Melancon) Jeff Landry (D) vs RAUL SANGISETTY (R) MA-10 (Delahunt) WILLIAM KEATING (D) vs Jeff Perry (R) MD-01*Frank Kratovil, Jr. (D) vs ANDY HARRIS (R) MI-01 (Stupak) Gary McDowell (D) vs DAN BENISHEK (R) MI-02 (Hoekstra) Fred Johnson (D) vs BILL HUIZENGA (R) MI-03 (Ehlers) Pat Miles (D) vs JUSTIN AMASH (R) MI-07* Mark H. Schauer (D) vs TIM WALBERG (R)

JANUARY 2011 | NARFE

MI-13 (Kilpatrick) HANSEN CLARKE (D) vs John Hauler (R) MN-8 James Oberstar (D) vs CHIP CRAVAACK (R) MO-04 Ike Skelton (D) vs VICKY HARTZLER (R) MO-07 (Blunt) Scott Eckersley (D) vs BILLY LONG (R) MO Senate (Bond) Robin Carnahan (D) vs ROY BLUNT (R) MS-01 Travis Childers (D) vs ALAN NUNNELEE (R) MS-04 Gene Taylor (D) vs STEVEN PALAZZO (R) NC-02 Bob Etheridge (D) vs RENEE ELLMER (R) ND-AL Earl Pomeroy (D) vs RICK BERG (R) ND Senate (Dorgan) Tracy Potter (D) vs JOHN HOEVEN (R) NH-01 Carol Shea Porter (D) vs FRANK GUINTA (R) NH-02 (Hodes) Ann Kuster (D) vs CHARLES BASS (R) NH Senate (Gregg) Paul Hodes (D) vs KELLY AYOTTE (R) NJ-03* John Adler (D) vs JON RUNYAN (R) NM-02*Harry Teague (D) vs STEVE PEARCE (R) NV-03* Dina Titus (D) vs JOE HECK (R) NY-01 Tim Bishop (D) vs Randy Altshuler (R) UNDECIDED NY-13* Michael McMahon (D) vs MICHAEL GRIMM (R) NY-19 John Hall (D) vs NAN HAYWORTH (R) NY-20* Scott Murphy (D) vs CHRIS GIBSON (R) NY-24 Michael Arcuri (D) vs RICHARD HANNA (R) NY-25* Dan Maffei (D) vs ANN MARIE BUERKLE (R) NY-29 VACANT Matthew Zeller (D) vs TOM REED (R) OH-01* Steve Driehaus (D) vs STEVE CHABOT (R) OH-06 Charlie Wilson (D) vs BILL JOHNSON (R) OH-15* Mary Jo Kilroy (D) vs STEVE STIVERS (R) OH-16* John Boccieri (D) vs JIM RENACCI (R) OH-18 Zachary Space (D) vs BOB GIBBS (R) OH Senate (Voinovich) Lee Fisher (D) vs ROB PORTMAN (R) OK-05 (Fallin) Billy Coyle (D) vs JAMES LANKFORD (R)

PA-03* Kathy Dahlkemper (D) vs MIKE KELLY (R) PA-07 (Sestak) Bryan Lentz vs PAT MEEHAN (R) PA-08 Patrick Murphy (D) vs MICHAEL FITZPATRICK (R) PA-10 Chris Carney (D) vs THOMAS MARINO (R) PA-11 Paul Kanjorski (D) vs LOU BARLETTA (R) PA Senate (Specter) Joe Sestak (D) vs PAT TOOMEY (R) RI-01 (Kennedy) DAVID CICILLINE (D) vs John Loughlin (R) SC-01 (Brown) Ben Frasler (D) vs TIM SCOTT (R) SC-03 (Barrett) Jane Dyer (D) vs JEFF DUNCAN (R) SC-04 (Inglis) Paul Corden (D) vs TREY GOWDY (R) SC-05 John Spratt (D) vs MICK MULVANEY (R) SD-AL Stephanie Herseth Sandlin (D) vs KRISTI NOEM (R) TN-03 (Wamp) John Wolfe (D) vs CHUCK FLEISCHMANN (R) TN-04 Lincoln Davis (D) vs SCOTT DESJARLAIS (R) TN-06 (Gordon) Brett Carter (D) vs DIANE BLACK (R) TN-08 (Tanner) Roy Herron (D) vs STEPHEN FINCHER (R) TX-17 Chet Edwards (D) vs BILL FLORES (R) TX-23 Ciro Rodriguez (D) vs FRANCISCO CANSECO (R) TX-27 Solomon Ortiz (D) vs BLAKE FARENTHOLD (R) UT Senate (Bennett) Sam Granato (D) vs MIKE LEE (R) VA-02* Glenn Nye (D) vs SCOTT RIGELL (R) VA-05* Tom Perriello (D) vs ROBERT HURT (R) VA-09 Rick Boucher (D) vs MORGAN GRIFFITH (R) WA-03 (Baird) Denny Heck (D) vs JAIME HERRERA (R) WI-07 (Obey) Julie Lassa (D) vs SEAN DUFFY (R) WI-08 Steven Kagen (D) vs REID RIBBLE (R) WI Senate Russell Feingold (D) vs RON JOHNSON (R) WV-01 (Mollohan) Mike Oliverio (D) vs DAVID MCKINLEY (R) WV Senate (Goodwin) JOE MANCHIN (D) vs John Raese (R)

Presenting NARFE’s

Limited Edition 90th Anniversary Book

ars of Service Celebrating 90 Ye 1 1921-201

Only $10

Order your copy of NARFE’s 90th Anniversary Book today! Clip and mail to: NARFE 90th Book, 606 N. Washington Street, Alexandria, VA 22314-1914 Name __________________________________________________________________ Address ________________________________________________________________ City __________________________________________State ______ZIP ___________

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____ x $10 = __________ (includes shipping & handling)

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NARFE | JANUARY 2011

Legislative Report NARFE’s

LegislativeAccomplishments IN THE 111TH CONGRESS ✔ Equity for Federal Retirees in Stimulus Bill: Ensures that federal, state and local government retirees who are not eligible for Social Security will receive a onetime, $250 per-person refundable tax credit for the 2009 tax year. ✔ Protection of Federal Benefits: Protects benefits by defeat of an amendment to the fiscal year 2010 House Budget Resolution that would have cut federal civilian retirement and/or health benefits by $10 billion over 10 years. ✔ Enactment of Several Civil Service Improvements in the Defense Authorization Bill: • Re-employing Annuitants: Allows federal agencies to re-employ federal retirees on a limited, part-time basis without offset of annuity. • Federal Employees Retirement System (FERS) Sick Leave: Permits FERS workers initially to credit half, and in 2014 all, of their unused sick leave toward retirement. • FERS Redeposit: Allows returning FERS employees, who previously left federal service, to repay a deposit to the Retirement Trust Fund, with interest, in order to be able to combine their past and new federal service for future annuity service. • Civil Service Retirement System (CSRS) Part-Time Service Fix: Permits certain CSRS workers to phase down to part-time status at the end of their careers without reducing their final annuity. • Locality Pay Equity: Provides locality pay that is creditable toward retirement for federal employees in Hawaii, Alaska and the U.S. Territories. • National Security Personnel System (NSPS): Ends the Department of Defense’s pay-for-performance personnel system, the NSPS, and restores employees to the federal General Schedule pay system. ✔ Enactment of Enhancements to the Thrift Savings Plan (TSP): • Automatic Enrollment and Immediate Contributions: Provides automatic TSP enrollment of, and immediate matching contributions for, newly hired federal employees.

• Roth Option: Adds a “Roth” option to the TSP, allowing participants to make after-tax contributions to the plan and withdraw their earnings tax-free upon retirement. • TSP Accounts Rights for Survivors: Ensures that surviving spouses have the same rights over their inherited accounts as any other TSP participant. ✔ Shielding the Federal Employees Health Benefits Program (FEHBP) in the Senate’s Health Care Reform Bill: • Safeguards: NARFE-drafted language would safeguard the FEHBP under a plan to have the Office of Personnel Management manage health plans for nonfederal civilians. • Threatening Amendments Dropped: Proposals were dropped that would have required federal workers to join health exchanges and that would have opened the FEHBP to nonfederal civilians without separate risk pools. ✔ House Approval of Medicare Part B Premium Protection Bill: Protects all Medicare beneficiaries, including government retirees who are not eligible to receive Social Security, from paying an increase in the 2010 Medicare Part B premium. The Senate still must approve this legislation. ✔ Obama Administration Endorsement of $250 Payment to Public-Sector Retirees: In lieu of a 2010 Social Security cost-of-living adjustment, the Obama administration supports providing a $250 payment to all older Americans, including federal, state and local government employees who are not eligible to receive Social Security. ✔ Defeat Attempts to Freeze Federal Worker Pay: NARFE helped to push back three attempts in the Senate (May 27, and June 17 and 23, 2010) and one in the House (May 28, 2010) to deny federal workers a modest 1.4-percent salary increase in 2011. ✔ Enactment of Expanded Telework Opportunities: Requires executive branch agencies to establish policies allowing eligible employees to telework. ■ JANUARY 2011 | NARFE

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Legislative Report

NARFE’S LEGISLATIVE PROGRAM FOR

ARFE’s Legislative Program is crafted by its members at a national convention held in the year immediately preceding the beginning of each new Congress. Through a resolution procedure originating at the local chapter level, the process culminates at the national convention with the adoption of specific legislative policy goals. Once approved, the goals become NARFE’s Legislative Program for the next Congress. Below is NARFE’s Legislative Program for the 112th Congress (2011-2012), adopted by delegates at the 31st Biennial National Convention held August 29-September 2, 2010, in Grand Rapids, MI. This Legislative Program is ordered into three categories to illustrate their priority as NARFE legislative goals. The first priority is to preserve the earned retirement benefits of annuitants and employees. The second is to provide enhanced benefits to a significant share of NARFE’s current and future membership. And the third encompasses other key positions. Legislative goals followed by an asterisk (*) require the introduction of legislation. Positions printed in italics are new to the Legislative Program for the 112th Congress. Under the NARFE Bylaws, the National President has the authority to execute Association policy, which includes the Legislative Program. Under this authority, the National President makes the final legislative policy and strategy decisions based on guidance from the Legislative Program and counsel from the legislative director, and considers the views of the National Executive Board and leaders and members of the Association. Such counsel and views take on particular importance when, in the absence of specific guidance from the Legislative Program, the National President must use judgment on what is in the best interest of federal workers and annuitants.

1: PRESERVING EXISTING BENEFITS ECONOMIC SECURITY: FEDERAL CIVIL SERVICE ANNUITIES

• NARFE shall continue efforts in strong support of costof-living adjustments (COLAs) for all federally administered retirement programs on a regular annual schedule, computed on the same basis and paid at the same time, regardless of age and/or income level. NARFE opposes across-theboard cuts not required in all federally administered retirement programs. • NARFE supports, and shall continue to evaluate, a Consumer Price Index (CPI) based on the objective analysis of Bureau of Labor Statistics (BLS) professionals, and opposes any politically arbitrary changes in the CPI. The BLS should establish a research program to develop an accurate measure for retirees. NARFE shall work toward and support changing the CPI-W to the CPI-U as the standard for determining the COLA. * • NARFE opposes any action that erodes the solvency of the Civil Service Retirement and Disability Fund (CSRDF) and supports providing full public disclosure of the fiscal stability and financial obligations of the fund. FEDERAL EMPLOYEES PAY

• NARFE supports full implementation of federal em-

ployee pay parity as reflected in the Federal Employees Pay Comparability Act of 1990 (P.L. 102-378). HEALTH SECURITY: THE FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM (FEHBP)

NARFE supports protecting the nation’s most efficiently administered and cost-effective employer-sponsored health insurance program, the FEHBP, for federal employees and annuitants. Toward that end: • NARFE will continue to participate actively in ongoing discussions with key Office of Personnel Management (OPM) officials and staff regarding the premiums, benefits, terms, conditions and marketing of FEHBP plans. NARFE opposes increases in the enrollee co-payment for purchase of prescription drugs in the FEHBP by federal annuitants who participate in Medicare; • NARFE supports legislation that would ensure that all FEHBP enrollees receive the same level of prescription drug coverage, by plan; * and • NARFE supports retaining the carry-over provisions in current law for Flexible Spending Accounts (FSAs) to ensure that FSAs are not used in conjunction with high-deductible catastrophic health insurance to form an alternative version of a Health Savings Account. * To protect the program, NARFE opposes: • Authorizing Health Savings Accounts, Medicare Savings JANUARY 2011 | NARFE

112

THE

Accounts, Medical Savings Accounts, and “customer-driven,” “consumer-driven” or “patient-directed” plans in the FEHBP; • Broadening participation in the FEHBP, unless separate risk pools are created; • Indexing flat payment by the U.S. government for FEHBP premiums; • Requiring federal agencies to pre-fund the government/employer’s share of post-retirement FEHBP premiums for their current employees; • Establishing separately rated health plans for Medicareparticipating retirees and survivors; and • Proposals that would encourage or force federal annuitants or workers into “cost-conscious” FEHBP plans, such as managed care and “customer-driven” options. ENSURING JOB SECURITY FOR FEDERAL WORKERS AFFECTED BY PRIVATIZATION

• NARFE opposes policies on contracting out of federal jobs that put employees at an unfair disadvantage in the competitive process. • NARFE opposes proposals that would privatize government functions that do not ensure the continued federal service of current employees. • NARFE specifically opposes contracting out the processing and maintenance of federal personnel records. PROVIDING LONG-TERM CARE

• NARFE shall actively participate in the ongoing development of the federal long-term care insurance program, including use of the plan’s economy of scale to make premiums and underwriting requirements more reasonable than similar products sold in the private market. • NARFE supports the guarantee of long-term care benefits for individuals presently eligible for Medicaid, adequate state and federal contributions to Medicaid to finance current and future program needs, standards of care and safety that all nursing homes must follow in order to receive reimbursement for any patient in their care, and current MedNARFE | JANUARY 2011

CONGRESS

icaid law that protects spouses of nursing home residents from becoming impoverished. NARFE opposes further limitations on, and supports easing, asset rules that prevent severely disabled persons from qualifying and receiving Medicaid long-term care benefits. * GUARANTEEING MEDICARE FOR CURRENT AND FUTURE GENERATIONS

NARFE supports: • Protecting Medicare’s guarantee of basic health security for older Americans at affordable and predictable prices; • Preserving the current Medicare fee-for-service program, including the ability to select the physician of your choice; and • Ensuring that the Medicare drug program does not require beneficiaries who receive such coverage through other insurance to pay additional premiums. * NARFE opposes: • Means-testing cost-sharing requirements; • Increasing the Medicare eligibility age; • Requiring home health care co-payments; • Proposals that would give private Medicare plans an unfair competitive advantage over the current Medicare feefor-service program and undermine the present program’s ability to share health care costs over a wide community of coverage, including the premium support demonstration program; * and • Schemes that limit the government portion or reduce its proportional share of Medicare premiums through a formula that does not accurately reflect the updated costs of providing health care to eligible beneficiaries. GUARANTEEING SOCIAL SECURITY FOR CURRENT AND FUTURE RETIREES

• NARFE opposes investment of the Social Security reserves in investments other than Treasury securities. • NARFE opposes replacing any portion of Social Security benefits with private individual accounts. • In addition, NARFE should be guided by the following seven Social Security principles to provide: 1. A benefit people can depend on; 2. Financial security for the disabled, survivors and dependents (i.e., social insurance); 3. Universal and fair coverage;

Legislative Report 4. Deliberate redistribution of benefits to lower income beneficiaries; 5. Efficient administration of the program (less than 1 percent overhead costs); 6. Benefits at no risk to the beneficiaries; and 7. Full cost-of-living adjustments (COLAs). PRESERVATION OF EMPLOYER-SPONSORED HEALTH INSURANCE

• NARFE supports enforcement of provisions in the Age Discrimination in Employment Act to ensure that, when provided, the same level of employer-sponsored health coverage be given to all retirees regardless of age.

2: ENHANCING EXISTING BENEFITS MAKING HEALTH CARE MORE AFFORDABLE

• The Association shall actively participate in efforts by the administration and Congress to contain FEHBP costs, including the development and implementation of initiatives to rein in skyrocketing prescription drug expenses, particularly the use of the federal supply schedule by FEHBP plans to purchase prescription drugs on behalf of enrollees. • The Association will educate its members on the effect of adding to or changing coverage, and the costs and benefits of requiring such benefit changes. • NARFE opposes the Office of Personnel Management’s decision to forgo the Medicare employer subsidy to which the FEHBP is entitled since plans provide annuitants age 65 and older with drug coverage that is greater in value than the Medicare Part D prescription drug program and will actively pursue the subsidy for the purpose of offsetting FEHBP premiums charged to the government/employer and all enrollees. ENSURING FAIR SOCIAL SECURITY BENEFITS FOR GOVERNMENT RETIREES

• NARFE supports the repeal or reform of the Social Security Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP). * • NARFE supports legislation that would require the Social Security Administration to report annually the amount of the WEP penalty to affected individuals. *

3: ADDITIONAL PRIORITIES PERFECTING FEDERAL RETIREMENT

• NARFE supports legislation to provide retiring federal employees the option of electing and paying the actuarial cost of additional survivor annuity amounts in 5-percent increments, up to 75 percent of an unreduced annuity. *

• NARFE shall advocate and support legislation that permits civilian federal employees to deposit bonuses and performance awards in any form into the Thrift Savings Plan (TSP) on a tax-deferred basis. * NARFE supports legislation to conform the TSP regulations with Internal Revenue Service (IRS) regulations on other qualified retirement savings plans. * NARFE supports legislation to authorize the Federal Retirement Thrift Investment Board to take legal action to protect the interests of TSP account holders in accordance with its fiduciary responsibilities. * • NARFE supports legislation on behalf of the diminishing number of Filipino federal annuitants to provide for increased and adequate compensation for services rendered to the government of the United States. * • NARFE supports legislation to prevent the erosion of deferred federal annuitant retirement benefits. * • NARFE supports legislation to correct the calculation of annuities of federal employees and retirees who work parttime in the final years of their careers, and whose annuities are reduced as a result of the interpretation of federal deficit law [Section 15204 of the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA) (P.L. 99-272)]. * • NARFE supports legislation that would allow the recalculation of retirement annuities for federal employees who have retired since 1994 and who worked in Hawaii, Alaska or the U.S. Territories, provided they pay contributions to the Civil Service Retirement and Disability Fund and the income taxes that they would have paid had locality pay been available to them prior to their retirement. * ENHANCING LONG-TERM CARE

• NARFE supports proposals to develop and coordinate a comprehensive long-term care policy that would include public and private initiatives that address financing, choices and quality service. • The Association supports tax relief for the purchase of long-term care insurance, family caregiving and other longterm care expenses. * NARFE supports proposals that would help individuals who cannot afford long-term care insurance or have an immediate or likely need for long-term care to receive such services without impoverishing themselves. * • NARFE supports nursing home reform, including efforts to ensure that long-term care facilities are adequately staffed with experienced professionals in the medical disciplines of gerontology and nursing, and that such individuals continue to receive training and are adequately compensated. * IMPROVING THE FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM

• NARFE will encourage the Office of Personnel ManJANUARY 2011 | NARFE

NARFE’S LEGISLATIVE PROGRAM FOR THE 112 TH CONGRESS agement to increase the number of health care providers who are board certified in, or have training in, geriatrics in FEHBP plans.

PROVIDING TAX RELIEF FOR HEALTH CARE EXPENSES • NARFE supports legislation to amend Section 125 of the tax code to allow federal retirees and survivors, and all other retirees, to pay: 1. Their share of the FEHBP and other employer-sponsored health insurance premiums with pre-tax annuities; * and 2. Health care costs not covered by traditional health insurance and child and adult dependent care with pre-tax annuities deposited by annuitants in “Flexible Spending Accounts” (FSAs).

ENSURING THE LONG-TERM VIABILITY OF THE POSTAL SERVICE • NARFE supports legislation to allow the Office of Personnel Management to make payments for any refund due to the United States Postal Service (USPS) from the Civil Service Retirement and Disability Fund (CSRDF), on the condition that such payments would not result in the reduction of federal annuities paid to retirees and survivors. * IMPROVING MEDICARE

NARFE supports efforts to: • Repeal means-testing of Medicare premiums; * • Reduce the penalty imposed on those who do not enroll in Medicare Part B at the time they become eligible; * • Enhance Medicare prescription drug coverage, including authority for the federal government to negotiate drug prices for the entire program; simplify and stabilize coverage; and provide equal coverage throughout the United States and its territories; * and • Place a greater emphasis on gerontological studies and training in medical education programs financed by Medicare. CONTROLLING PRESCRIPTION DRUG COSTS

NARFE supports legislation to: • Allow pharmacies to buy prescription drugs from pharmaceutical manufacturers for Medicare beneficiaries at the same average discount available in industrialized countries; * • Permit drugs made in the United States or other industrialized countries, and exported to third-party industrialized countries, to be reimported, or imported, to the United States; * • Prevent pharmaceutical manufacturers from limiting the sale of drugs to other countries for the purpose of disNARFE | JANUARY 2011

couraging reimportation; and * • Speed the approval of less expensive generic drugs. * • NARFE supports compliance with current law that directs the Food and Drug Administration (FDA) to approve new drugs through evidence-based evaluation. PROVIDING COMPREHENSIVE PATIENT PROTECTIONS

• NARFE supports legislation that would provide comprehensive patient protections to consumers enrolled in health plans regulated by federal and state law, and would also allow such individuals to sue their plans for wrongful denials of care. * SECURING UNIVERSAL ACCESS TO COMPREHENSIVE HEALTH CARE

• NARFE supports access to comprehensive health care for all Americans. * PREVENTING MEDICAL ERRORS

• NARFE supports legislation that would create a system to monitor, analyze and prevent medical errors. * ESTABLISHING TAX EQUITY

• NARFE supports legislation to provide equitable tax treatment of government retirement benefits comparable with Social Security. * • NARFE supports indexing the income threshold on taxable Social Security benefits. * SUPPORTING COMMUNITY SERVICES FOR OLDER AMERICANS

• NARFE supports the reauthorization of, and adequate annual appropriations for, the Older Americans Act to ensure the continuation and enhancement of community services for senior citizens of all income levels. * IMPROVING RESPONSE PLANS FOR OLDER AMERICANS

• NARFE supports the development of a coordinated federal, state and local emergency response plan for seniors in the event of public health emergencies or natural disasters. * DC DELEGATE VOTING RIGHTS

• NARFE supports legislation that would grant statehood to the District of Columbia. * • NARFE supports legislation and other changes necessary to extend to the delegate from the District of Columbia the same right to vote on the floor of the U.S. House of Representatives as is afforded to all other members of Congress. * ■

By Dan Adcock, Legislative Director

Congressional Leaders Vow to Consider Spending-Cut Proposals

ederal workers and retirees can expect unprecedented assaults on their pay and benefits as Congress considers spending cuts proposed by the co-chairmen of the National Commission on Fiscal Responsibility and Reform. The 18-member bipartisan commission was created by President Obama in early 2010 to come up

with proposals to balance the federal budget and reduce the country’s debt.

On November 10, the panel’s bipartisan cochairmen – former Clinton White House Chief of Staff Erskine Bowles and former Wyoming Republican Senator Alan K. Simpson – released a preliminary 50-page draft report. On December 1, the date on which the panel was supposed to take a vote on the proposal, the chairmen issued a second draft report and delayed the vote so that commission members could consider the new plan. As the commission finished its work, congressional leaders vowed to consider, as part of the budget

process in 2011, the major tax-code changes, dramatic changes to Social Security and spending reductions proposed by the co-chairmen. Under an agreement reached in February 2010, outgoing House Speaker Nancy Pelosi, D-CA, and Senate Majority Leader Harry Reid, D-NV, had said that the Senate and House would immediately consider the report as legislation without amendments if 14 of the 18 commission members voted to approve it. Absent the 14 votes, Pelosi and Reid were not obligated to take up the commission’s recommendations. JANUARY 2011 | NARFE

IMPACT ON FEDERAL RETIREMENT NARFE was deeply troubled by a proposal in the co-chairs’ final report to create a “federal work force entitlement task force” to make recommendations to Congress to cut federal civilian and military retirement benefits by $70 billion over 10 years. The report cited the options the task force should consider, including: • Calculate federal civilian retirement annuities on the highest five years of salary rather than the highest three years under current and longstanding law. According to the Congressional Budget Office, this plan would reduce a Civil Service Retirement System (CSRS) annuity by an average of $1,424 in 2010 and would reduce the average annuitant’s retirement benefit by $7,148 over five years. A Federal Employees Retirement System (FERS) annuity would be cut by an average of $462 in 2010 and by $2,322 over five years. • Require workers to contribute a much higher share of their salary toward their defined-benefit annuity, which would have the effect of a significant pay cut. The additional contribution would not result in any change in a retirement annuity. While employees currently make contributions from their salary to the Civil Service Retirement and Disability Fund, historically most medium and large private-sector employers have not required their workers to make any contributions toward their defined-benefit pensions. • Defer CSRS cost-of-living adjustments (COLAs) until age 62. Instead, CSRS annuitants would be offered a one-time, catch-up inflation adjustment at age 62 to increase the benefit to the amount that would have been payable had full COLAs been in effect. In addition, the report would require federal workers and annuitants to pay an increasingly higher share of the Federal Employees Health Benefits ProNARFE | JANUARY 2011

Alan K. Simpson

Erskine Bowles

gram (FEHBP) premium by limiting the growth of the government/employer share to Gross Domestic Product (GDP) plus 1 percent. Increases in FEHBP premiums have outpaced the percentage increase in the GDP plus 1 percent. That means that the share enrollees pay would grow from an average of 30 percent, under current law, to about 40 percent in 2015 and 58 percent by 2020, according to a preliminary estimate. Over five years, more than $3,500 in premium costs would be shifted to federal annuitants and employees. The report’s proposal to use the socalled “Chained” Consumer Price Index for All Urban Consumers (C-CPI-U) to set COLAs for Social Security (and other indexed benefits) has been estimated by the Congressional Budget Office to lower Social Security benefits by 3 percent after a 10-year period and would likely result in a similar reduction to federal civilian and military retirement COLAs. Rather than adjust the COLA to reflect the disproportionately higher health care costs paid by older Americans, the co-chairs’ proposal to use the C-CPI-U would further erode federal annuitant inflation protection.

CUTTING THE WORK FORCE AND FREEZING PAY Deficit-reduction measures proposed by Chairmen Bowles and Simpson were not limited to federal retirement and health benefits. Active federal employees were also singled out for budget cuts, and would be particularly impacted by a recommendation to enact strict discretionary spending caps and provide $200 billion in domestic and defense discretionary savings by

2015. Discretionary spending refers to spending set by annual appropriations, which fund the day-to-day operation of government. The proposal included a three-year pay freeze and a 10-percent cut in the size of the federal work force. Freezing or cutting pay sends the wrong signal at a time when federal agencies will be hard-pressed to recruit and retain the most competent workers needed to make government operate more efficiently, prevent the next terrorist attacks, fight two wars, cure diseases, provide assistance to unemployed and disabled Americans, and treat wounded soldiers and veterans. Cutting the federal work force by 10 percent is more about politics than good human resource management. In fact, 60 percent of all federal workers will be eligible to retire in the next five years. Experts agree that the federal government can ill afford to lose its most talented and experienced employees at a time when the country is facing unprecedented crises. Indeed, Paul C. Light, New York University Wagner's Paulette Goddard Professor of Public Service, said in November that the cochairs’ government-cutting proposal is “… a random shooting that will further eviscerate the front lines of government, where the goods and services are actually delivered, and that will fuel further growth in the contracting work force.”

NARFE RESPONDS In November, NARFE Headquarters took extraordinary measures to alert members about the threat posed to their benefits by the Fiscal Commission chairmen’s proposed plan. First, the Association sent an Action Alert through its GEMS e-mail messaging system to all NARFE members who have provided an e-mail address to NARFE. Then, it sent automated phone calls to NARFE members for whom phone numbers, rather than e-mail addresses, were on file. The messages asked members to

use a toll-free phone number to contact their representative and senators to oppose the Fiscal Commission plan. “The proposals in the co-chairs’ final report to cut federal employment and compensation will outlive the Fiscal Commission and will be treated seriously by the new Congress,” said NARFE President Joseph A. Beaudoin. “It will be up to all of us to remain vigilant about these threats to our earned wages, retirement and health benefits.” For that reason, Beaudoin encouraged NARFE members to receive the weekly NARFE Legislative Hotline by including their e-mail address in their membership record. The Hotline also is available on the NARFE Web site, www.narfe.org, or by calling toll-free 877-217-8234. In addition, NARFE gathered support from 15 member organizations of the federal-postal coalition to sign a joint letter sent to Bowles and Simpson,

urging them to reconsider their proposals to cut federal civilian retirement and health benefits, freeze federal pay and reduce the federal work force by 10 percent. “In light of the growing number of critical challenges being shouldered by federal workers, the government cannot afford to make substantial reductions to the earned compensation of individuals who have dedicated their careers to public service,” the groups said. “For that reason, we urge you to defend the integrity of a system that provides wages, health and retirement benefits compensation to 4.6 million federal workers and annuitants.”

OTHER KEY PROPOSALS The chairmen’s draft plan proposed to make the “benefit formula” for Social Security more progressive, meaning benefits would target those who need

them the most. While upper income recipients would have their future payments reduced the most, the formula change would cut the benefits of all future recipients. In addition, under the plan, the retirement age for Social Security eligibility would be increased, based on the average American’s greater longevity, increasing the age to 68 by 2050 and 69 in 2075. In 2009, earnings up to $106,800 annually are subject to Social Security payroll taxes. Currently, the maximum limit on taxable salary income applies to less than 86 percent of national earnings – with the highest wage-earners avoiding the lion’s share of payroll taxes. The cochairs’ suggested plan would gradually increase the maximum taxable salary to cover 90 percent of wages by 2050. Bowles and Simpson suggested that the Medicare “doc fix” be paid for by spending reductions or revenue increases. Their report suggested that such “fixes” be less generous to health care providers. The “doc fix” refers to periodic scheduled reductions in the growth of payment to health care providers under Medicare. These scheduled reductions were put into the Medicare law before the Medicare reforms made in the health care reform legislation enacted in 2010. Physicians have threatened to stop taking new Medicare patients if the scheduled reimbursement cuts go into effect. Consequently, Congress typically addresses this issue on an annual basis at the last moment, subjecting Medicare beneficiaries and providers to a fraughtfilled cliffhanger process. For instance, in November, during the lame-duck session of the 111th Congress, the Senate and House passed a one-month extension of the current Medicare physician payment rates in an effort to avert a 23-percent cut that had been scheduled to take effect December 1.

Legislative CounselAlan Lopatin contributed to this article.

JANUARY 2011 | NARFE

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NewBoardMeets,Discusses Looming Threats toBenefits

t their first meeting after being elected, members

16-18 in Alexandria, VA, just days after the co-chairs of the National

Meeting at NARFE Headquarters were, from left to right: Lanny G. Ross, Region IX vp; Betty Lucero-Turner, Region VII vp; Ronald P. Bowers, Region II vp; Paul E. Johnson, Region IV vp; Richard G. Thissen, Region V vp; Charles W. Saylor, National Treasurer; Joseph A. Beaudoin, National President; Paul H. Carew, National Vice President; Elaine Hughes, National Secretary; William F. Martin, Region X vp; Gilbert W. Blaisdell, Region 1 vp; Jerome S. Smith, Region VI vp; Helen L. Zajac, Region VIII vp; and Donald Stewart, Region III vp.

contact their members of Congress and ask them to oppose the proposal. Then NARFE used “robocalls” – automated phone calls – to contact the 170,000 members for whom it has phone numbers but not e-mail addresses. In a special early-morning session on the last day of their meeting, Board members discussed additional ways to inform NARFE members and other federal employees and retirees about the threats and to organize them for quick response. Regional vice presidents left with plans to work in their regions to get more members to provide their e-mail addresses to NARFE Headquarters and to update chapter calling trees to ensure that those members who do not provide e-mail addresses

can be called upon to act quickly, if needed, to fend off legislative attacks. Among other actions, the Board approved the Association’s 2011 budget and endorsed creation of a NARFE Information Technology Advisory Committee. The Board also reviewed the 20112012 membership strategic action plan. The plan will be further discussed at the next Board meeting, which will be held March 2-4 in conjunction with the NARFE Legislative Training Conference in Arlington, VA. Photos of individual members of the Board and their regions are on pages 34-35. Minutes of the meeting will be posted on the NARFE Web site, www.narfe.org.

of the National Executive Board toured NARFE Headquarters, got acquainted with their new duties and moved through an extensive agenda.

They also had the opportunity to formulate strategy for a grass-roots

membership response to a legislative threat. The Board met November

Commission on Fiscal Responsibility and Reform – the so-called “Fiscal Commission” – released a debt-reduction report that has wide-ranging negative implications for the federal work force and federal retirees (see story, p. 28). Consequently, the Board spent much of the meeting talking about ways to mobilize NARFE members to defend their benefits. During the three-day meeting, Dan Adcock, legislative director, briefed the Board on the Fiscal Commission proposal and NARFE’s response. Adcock reported that using the NARFE e-mail messaging system, GEMS, the Association had alerted the 55,000 NARFE members for whom it has e-mail addresses, asking them to

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PRESIDENT Joseph A. Beaudoin

VICE PRESIDENT Paul H. Carew

SECRETARY Elaine Hughes

TREASURER Charles W. Saylor

REGION IX REGIONAL VP Lanny G. Ross Alaska, Idaho, Montana, Oregon and Washington

REGION VIII REGIONAL VP Helen L. Zajac California, Guam, Hawaii, Nevada and Republic of the Philippines

REGION VII REGIONAL VP Betty Lucero-Turner Arizona, Colorado, New Mexico, Utah and Wyoming

JANUARY 2011 | NARFE

NARFEâ&#x20AC;&#x2122;s

NATIONAL EXECUTIVE BOARD REGION I REGIONAL VP Gilbert W. Blaisdell Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont

REGION IV REGIONAL VP Paul E. Johnson REGION V REGIONAL VP Richard G. Thissen Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota

Illinois, Indiana, Michigan, Ohio and Wisconsin

REGION II REGIONAL VP Ronald P. Bowers Delaware, District of Columbia, Maryland, New Jersey and Pennsylvania

REGION X REGIONAL VP William F. Martin Kentucky, North Carolina, Tennessee, Virginia and West Virginia

REGION VI REGIONAL VP Jerome S. Smith Arkansas, Louisiana, Oklahoma, Republic of Panama and Texas

NARFE | JANUARY 2011

REGION III REGIONAL VP

Donald W. Stewart Alabama, Florida, Georgia, Mississippi, Puerto Rico, South Carolina and Virgin Islands

Managing Money

Inherited IRAs By Mark A. Keen, CFP®

f planning is done correctly, your beneficiaries can leverage the tax-deferred benefits of your traditional individual retirement account (IRA) for many years to come. Unfortunately, the Internal Revenue Service (IRS) rules for beneficiaries are complex. One mistake could lead to excessive penalties or, worse, permanent loss of the IRA’s tax-deferred status. If you want your family to get the maximum benefit from your IRA, it’s important that you and your beneficiaries understand the rules of the game. While there are many nuances, here are a few important things you and your beneficiaries should know. First, it’s important to understand that there is a distinction among several different categories of beneficiaries, and they are often subject to different rules. For example, there are designated beneficiaries and nondesignated beneficiaries. Designated beneficiaries are real, live human beings, whereas nondesignated beneficiaries include your estate, charities and other nonliving entities. There also is a distinction between spouse and nonspouse beneficiaries. We’ll discuss the spousal beneficiary this month and cover nonspouse beneficiaries next month. A spouse has ultimate flexibility when it comes to an inherited IRA, and he or she generally has the following three options: 1. Treat it as his or her own by performing a spousal rollover into his or her own traditional IRA; 2. Treat it as his or her own IRA by designating himself or herself as the account owner; or 3. Treat himself or herself as the

beneficiary, rather than treating the IRA as his or her own. The spousal rollover is typically the best option for the surviving spouse and can be accomplished by one of two ways. First, the rollover involves withdrawing the balance from the deceased spouse’s IRA and depositing the funds into his or her own IRA within 60 days. The second option is the direct “trustee-to-trustee” transfer, which is accomplished when the funds go directly from the deceased spouse’s IRA to the spouse’s IRA – without the spouse possessing the funds in between. In either case, the spouse is now the owner of the IRA, and, in the eyes of the IRS, will be treated as if he or she has always been the owner. In other words, the surviving spouse will be subject to all of the same rules and deadlines as any other IRA owner. For example, the spouse would be subject to the 10-percent early withdrawal penalty that generally applies to any distribution before an IRA account owner attains age 591/2. Furthermore, the spouse would be subject to the same required minimum distribution rules as any other IRA owner. That said, there are a number of clear advantages to a spousal rollover of an IRA: • By using a spousal rollover, the

surviving spouse can use his or her own age and life expectancy for starting the required minimum distributions from the IRA. In the case of a younger spousal beneficiary, this can mean a longer period for tax deferral of the IRA. • With a spousal rollover, the surviving spouse can use the IRS unified lifetime table, based on joint life expectancies, rather than the single lifetime table used for nonspousal beneficiaries and spouses remaining as beneficiary of an IRA. The joint table provides for a slower payout of required minimum distributions – effectively extending the benefits of t a x - d e fe r r e d growth. • A spousal rollover allows a surviving spouse to name primary and contingent beneficiaries to the IRA. Naming beneficiaries for the spousal IRA can provide these beneficiaries with the option of using their own life expectancies for drawing down the IRA once they inherit it. When a spouse remains as beneficiary, the spouse can still name his or her own beneficiary(ies), but there are circumstances when the beneficiaries will have to follow less generous required minimum distribution options. There are times, however, when it is beneficial for the spouse to remain as beneficiary rather than become the

ONE MISTAKE could lead to excessive penalties or, worse,permanent loss of the IRA’s tax-deferred status.

JANUARY 2011 | NARFE

owner of the IRA. For example, the 10percent early withdrawal penalty does not apply to IRA beneficiaries – only to owners. So, if the spouse is younger than age 59-1/2 when he or she inherits the IRA and needs cash from the IRA to live on, he or she will be better off remaining as beneficiary to avoid the pre-age 59-1/2 distribution penalty. If the spouse chooses to remain as beneficiary, then he or she would be required to begin taking minimum distributions by the later of December 31 of the year the IRA owner would have turned age 70-1/2 or December 31 of the year following the IRA owner’s death. This is interesting because, in the case where the IRA owner is younger than the spouse and dies at an early

This column has covered a few of the rules for spousal beneficiaries, but there are many other rules and nuances that you should be aware of to maximize the benefits of an inherited IRA. As previously mentioned, spouse and nonspouse beneficiaries have to play by different rules. Next month’s column covers nonspouse beneficiary rules.

age, it provides the spouse the ability to delay any required minimum distributions until the IRA owner would have reached age 70-1/2. For example, if spouse A dies at age 60 and leaves his IRA to his 71-year-old wife, she can opt to remain as beneficiary and delay the required minimum distributions for another 10 years until the deceased spouse would have turned age 70-1/2. Furthermore, if the spouse does elect to remain as beneficiary, he or she can perform a spousal rollover to become the owner at any time. On the other hand, if the wife became the owner of the IRA, she would have to begin taking her required minimum distributions by December 31 of the year following the year of spouse A’s death.

Mark A. Keen, CFP®, is president and owner of Bennett Financial Advisors in Fairfax, VA, and an investment adviser representative and registered representative of The Strategic Financial Alliance, Inc. (SFA). Securities and advisory services are offered through SFA. E-mail: mkeen@tributaryadvisors. com.

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Live Well

An Update on Shingles By Marilyn S. Radke, M.D.

hingles (herpes zoster) is a painful skin rash caused by varicella zoster virus, the same virus that causes chicken pox. After an attack of chicken pox, some of the virus particles move from the skin blisters into the nervous system and lie dormant in the nerve tissue. If the virus reactivates, it travels along the nerve fibers to the skin and causes the painful blisters that characterize shingles. The first sign of shingles is often burning or tingling pain, numbness or itching in one particular area on only one side of the face or body. The most common location for shingles is a band, called a dermatome, across one side of the trunk around the waistline. After several days or a week, a rash of fluid-filled blisters, similar to chicken pox, appears in the area. Other symptoms may include fever, headache, chills and upset stomach. After three to five days, the blisters crust over, and the rash usually disappears in two to four weeks. Approximately two in 10 people develop shingles in their lifetime. Usually, a person has only one episode of shingles, but a second or third episode can occur. Rarely, shingles can lead to pneumonia, hearing problems, blindness, brain inflammation (encephalitis) or death. Approximately one in five people

continues to experience severe pain (post-herpetic neuralgia) for months or years after the rash disappears. Anyone who has had chicken pox can develop shingles. It is most common in people over age 50, and the risk increases with age. Shingles also is more common in people who have weakened immune systems from: • Chemotherapy; • Radiation treatment; • Steroids and medications used

there are anti-viral medications available to reduce its effects: acyclovir (Zovirax), valcyclovir (Valtrex) and famciclovir (Famvir). When used as soon as possible after the rash appears, these medications can help shorten how long the illness lasts and how severe it is, and may help to prevent post-herpetic neuralgia. Postherpetic neuralgia also is treated with steroids, anti-depressants, anti-convulsants and topical agents.

ZOSTAVAX IS a vaccine used to prevent shingles in people age 60 and older who have had chicken pox.It can reduce the risk of shingles by half. after organ transplant operations; • Human immunodeficiency virus (HIV) infection; and • Stress. A person with shingles blisters can pass the virus to someone who has never had chicken pox, but the person will develop chicken pox, not shingles. Shingles comes from the virus lying dormant inside the person’s body, not from an outside source. The virus is spread by direct contact with the rash in the blister phase and is not spread through sneezing, coughing or casual contact. A person cannot spread the virus before blisters appear or after the blisters develop crusts. To reduce the risk of spreading the virus, people with shingles should keep the rash covered, not touch or scratch the rash, and wash their hands often. There is no cure for shingles, but

Zostavax is a vaccine used to prevent shingles in people age 60 and older who have had chicken pox. The vaccine can reduce the risk of shingles by half and the risk of post-herpetic neuralgia by two-thirds. Protec-

To Learn More

or more information, write to the NIH Neurological Institute, P.O. Box 5801, Bethesda, MD 20824; or call 800-352-9424 (TTY: 301-468-5981); or visit the Web site at www.ninds.nih.gov/disorders/ shingles.You also can contact the Centers for Disease Control Information Center at 800-232-4636 (TTY: 888-232-6348); or visit the Web site at www.cdc.gov/vaccines.

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tion lasts at least six years. Zostavax does not treat shingles or post-herpetic neuralgia once it develops. People who have had shingles can receive Zostavax to help prevent future attacks of shingles. The vaccine contains live, weakened (attenuated) varicella zoster virus. Common side effects from Zostavax include headache and redness, soreness, and swelling or itching at the injection site. People who have any of the following conditions should not be inoculated with Zostavax: • Allergy to gelatin, neomycin or any component of the vaccine; • A history of weakened immune system from leukemia, lymphoma or other cancer of the bone marrow or lymphatic system; • HIV/AIDS with T-cell counts below 200; • Treatment that weakens the immune system, including high-dose corticosteroids; • Active, untreated tuberculosis; and • Pregnancy. All Medicare Part D plans cover Zostavax. However, the amount you pay for the vaccination (cost-sharing) varies. Medicare Part B does not cover Zostavax. Contact your insurer (or Medicaid, if applicable) to find out if your plan covers Zostavax. If you have had shingles, or if you are age 60 or older, ask your doctor about Zostavax. If you develop a painful rash, see your doctor for evaluation. Your doctor can determine whether you have shingles, and provide you with treatment and vaccination, as needed.

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Questions & Answers NOTE: The following Questions & Answers were compiled by Retirement Benefits Service Department staff. These are real questions received by the Department and real answers, based on the members’ personal circumstances. The answers are not universal and may include information that is relevant to the correspondent’s particular situation. NARFE does not provide legal advice or assistance, does not provide financial planning advice or assistance, and does not provide tax advice or assistance. For legal, financial planning or tax advice/assistance, NARFE recommends members contact an attorney, financial planner or certified public accountant/tax adviser.

RETIREES FEGLI QUESTION: How are benefits paid out under Federal Employees’ Group Life Insurance (FEGLI)? Response: Your beneficiary(ies) or other eligible individuals would receive a check for death benefits if the payment is less than $7,500. For payments of $7,500 or more, the Office of Federal Employees’ Group Life Insurance (OFEGLI) would open a money market account automatically in the name of the payee(s) and would mail a checkbook to the payee(s). The payee(s) could close the account immediately or write checks at any time for any amount, from $250 up to the entire balance in the account. There would be no charge for checks, and the account balance would earn interest from the day it is opened. At the time of payment, the payee(s) would

receive complete details about the account. If you have Option C, which covers your family member, you would have to apply for the benefits upon the death of your spouse or child. Then, you would receive a check for any Option C benefits that might be payable.

tirement. He elected survivor’s benefits for me. In a recent “Questions & Answers” column,you stated that the spouse must be covered under a family health insurance plan upon the retiree’s death and have a survivor’s benefit in order to continue health insurance. Does this mean that I will lose my health insurance when he dies?

DUPLICATE 1099-R QUESTION:Is it possible to obtain a duplicate 1099-R?

Response: Since you are both federal retirees with health insurance, you are covered under an exception to the general rule. You will be able to continue your health insurance after his death because you met the requirements to carry your health insurance into retirement based upon your own work record. Since you are both federal retirees with health insurance, you are not required to be covered under his insurance when he dies in order to keep your insurance.

Response: Yes, but please wait long enough to receive your 1099-R for 2010. The Office of Personnel Management (OPM) assumes it has a valid mailing address and normally distributes the annuitant and survivor’s annuity 1099-Rs by the end of January. You may request a duplicate if you lose the one mailed to you. If you have your CSA or CSF retirement claim number, you can contact OPM at 888767-6738 and request a duplicate 1099-R. You also can go to the OPM Web site at www.servicesonline. opm.gov/ and use your OPM-provided personal identification number (PIN) to view, print and request a duplicate 1099-R for the current tax year and two previous years. If your address isn’t up-to-date, you need to call 888-767-6738 to change your mailing address and then request a duplicate 1099-R. You also may contact OPM and request a PIN. If you are still in interim pay status, you do not receive your PIN until your case is complete.

WORKERS’ COMP QUESTION:I am age 53 and receive workers’ compensation from the Department of Labor. I also applied for Social Security disability benefits.If my Social Security disability is approved, will my worker’s compensation payment be reduced?

QA &

CONTINUATION OF COVERAGE QUESTION: My husband and I are both retired, and we each carried a self-only health insurance plan into re-

Response: Your workers’ compensation benefits will remain the same, but your Social Security benefit may be reduced. Here is how it works. Your monthly Social Security disability benefits, including benefits payable to your family members, are added together with your workers’ compensation or other public disability payment. If the total amount of these benefits exceeds 80 percent of your average current earnings, the excess amount is deducted from your Social Security benefit. JANUARY 2011 | NARFE

Example: Before you became disabled, your average current earnings were $4,000 a month. You, your spouse and your two children would be eligible to receive a total of $2,200 a month in Social Security disability benefits. However, you also receive $2,000 a month from workers’ compensation. Because the total amount of benefits you would receive ($4,200) is more than 80 percent of your average current earnings ($3,200), your family’s Social Security benefits would be reduced by $1,000. Your Social Security benefit would be reduced until the month you reach age 65 or the month your other benefits stop, whichever comes first.

TERMINATE PART B QUESTION: I no longer need Medicare Part B because I am covered by other insurance. How do I terminate Part B enrollment? Response: If you want to terminate your enrollment in Medicare Part B, you need to contact the Social Security Administration for assistance. You would need to submit a signed request for termination on form CMS-1763. This form is not available online. Termination is a serious decision. If you might want to re-enroll later, you may have to pay a surcharge. Your monthly premium increases 10 percent for each 12-month period you were eligible for, but did not carry, Medicare Part B. The Centers for Medicare & Medicaid Services (CMS) requires that, when feasible, a personal interview be conducted with anyone who wants to terminate entitlement. You would need to fill out the form in person, or a CMS representative would complete it over the phone to ensure that you understand the consequences of termination. After the interview, a Social Security Administration representative would give you NARFE | JANUARY 2011

a letter outlining the consequences of voluntary termination and of your right to withdraw the termination request before coverage ends. Termination of Part B would be effective at the end of the month following the month that you file the termination request. For an interview, call 800-772-1213 or contact your local Social Security office.

INCAPACITATION QUESTION: What happens if I am unable to manage my own affairs? Response: If you are ever unable to take care of your own financial affairs, no one else can sign, cash or deposit your annuity check. In the event of your incapacitation, a family member or other individual should call the Office of Per-

sonnel Management (OPM) at 888-7676738 or write to the Office of Personnel Management, Retirement Operations Center, P.O. Box 45, Boyers, PA 160170045. You would need to provide the full name of the retiree, the retirement claim (CSA) number and date of birth. OPM would mail instructions, along with “Representative Payee” form RI 20-7, to the individual who would serve as your representative. OPM does not accept a power of attorney.

ACTIVE EMPLOYEES HEALTH PREMIUMS CHANGE? QUESTION:Do my health insurance premiums change after I’m retired?

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Questions & Answers NARFE SERVICE OFFICERS are available to answer questions and to assist in helping with a variety of benefit matters. Check your chapter newsletter for the name and phone number of your service officer. Call NARFE toll-free at

800-456-8410 for the nearest service officer. NARFE Service Centers are also available in some areas. Use the Service Center listings on the NARFE Web site, www.narfe.org.

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Discover the benefits of Air Force Village West Retirement! Call or go online to request information, tour our awardwinning Village, or make a reservation Federal for a fun- filled, government mini-vacation officials (GS7 where your food and and above) accommodations Military officers are complimentary. of ALL branches of the uniformed services

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Response: As a federal retiree, you pay the same premiums and receive the same benefits as an active federal employee; but, as a retiree, your premiums are paid monthly rather than biweekly. Note that some agencies (e.g., U.S. Postal Service, Federal Deposit Insurance Corp.) contribute more toward their employees’ health insurance premiums; and, when those employees retire, they no longer receive the higher agency contribution.

VOLUNTARY CONTRIBUTIONS QUESTION: I am under the Civil Service Retirement System (CSRS) and have just learned about the voluntary contribution (VC) account,which I could have been participating in.Can you explain this account to me? Response: VC accounts have been available for CSRS employees for many years. CSRS employees and CSRS Offset employees may contribute up to 10 percent of their lifetime federal salary to this account as long as they do not owe a deposit (e.g., temporary service) or redeposit for refunded CSRS retirement contributions. If you owe a deposit or redeposit, you would be required to pay off the deposit or redeposit before you could contribute to the VC account. Federal Employees Retirement System employees and CSRS retirees may not establish a VC account. You can open a VC account by filling out form 2804, available through the Office of Personnel Management (OPM). Your contributions

will go directly to OPM. You can place money in the account whenever you choose, as long as you send OPM a check for at least $25. The account allows employees to earn interest on the money in the account, and they are not responsible for paying taxes on the interest earned until they retire. When you retire, you also can elect a lump-sum payment of these contributions or a supplemental annuity. The supplemental annuity would pay an additional $7 for each $100 of retirement contributions, plus 20 cents for each full year the retiree is over age 55 at the time the annuity begins. You can withdraw the money in a lump-sum payment and only pay taxes on the interest earned because the amount you placed into this account would already have been taxed. Or you could roll over the money into an individual retirement account (IRA) to avoid paying taxes on the money until you withdraw money from the IRA. You would need to submit form RI 38-124, “Voluntary Contributions Election,” which would direct OPM to pay you a lump-sum payment or a supplemental annuity, or to place the money into the IRA. You can send form 2804 to OPM, along with your retirement application and form RI 38-124, to direct OPM to place the money in a Roth IRA without having the account accrue interest. It is advisable to check with a tax expert before moving money to a Roth IRA. JANUARY 2011 | NARFE

Vinson Hall Retirement Community

BENEFICIARIES QUESTION:How do I change my designation of beneficiary forms? Response: It is important to keep your beneficiary forms up-to-date. Many people have events occurring in their lives and forget to make changes to their beneficiary forms. If you divorce, remarry, or have a child or adopt a child, you want to make sure your benefits are distributed according to your wishes. You also need to keep your designated beneficiaries’ addresses current. Failure to do so may mean that your beneficiary cannot be located, and, therefore, benefits would not be paid to that person. The preferred way is to file a new “Designation of Beneficiary” form when a beneficiary’s address changes. There are several forms: • SF 2823 for Federal Employees’ Group Life Insurance; • SF 2808 for Civil Service Retirement System (CSRS) retirement contributions and SF 3102 for Federal Employees Retirement System (FERS) retirement contributions; • TSP-3 for your Thrift Savings Plan (TSP) account; and • SF 1152 for unpaid compensation for active employees. Unpaid compensation would include a lump-sum payment of your annual leave, your final paycheck and anything else the agency owes you, such as a lump-sum payment of a cash award. You must complete the proper form and have two people witness your signature. You will need to submit these forms to your agency, the TSP or the Office of Personnel Management. Your will does not take the place of a beneficiary form. However, you may use the guidance attached to each form to designate that the benefits be paid according to your will. If you are divorced and have a court order requiring you to pay benefits to NARFE | JANUARY 2011

WHERE THE EXCEPTIONAL BECOME EXTRAORDINARY. Add your name to our Expansion Priority Program List Home since 1969 to commissioned military officers and their immediate family members, Vinson Hall is now also open to select GS-14 and above federal employees. AN UNPRECEDENTED EXPANSION!

During this new stage of growth and renovation, Vinson Hall will add 75 new apartment homes over the next three years, ranging in size from 1,200 to more than 2,100 square feet, as well as a new community center. This is a quiet community characterized by mature trees, walking paths and lovely landscaping, located in McLean, Virginia, just across the Potomac from Washington, D.C. The time to act is now! Vinson Hall offers a resident-focused lifestyle perfectly suited to the extraordinary people who live here.

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Questions & Answers someone not appearing on the list, then the court order will be honored. If you do not have beneficiary designation forms on file, then your benefits will be paid according to the order of precedence established by law. For CSRS, FERS, TSP and unpaid compensation benefits, here is the order of precedence for payment if there is no valid designation on file when you die: • To your widow or widower; • If none, to your child or children in equal shares, with the share of any deceased child distributed among that child’s descendants; • If none, to your parents in equal shares or the entire amount to your surviving parent; • If none, to the executor or administrator of your estate; • If none, to your next of kin under

the laws of the state where you lived at the time of your death.

SS AND THE WEP QUESTION: I will soon be age 66, which is my full retirement age for Social Security benefits.I plan to continue to work for a few years and am covered under the Civil Service Retirement System (CSRS). I am thinking of applying for my Social Security benefit but would like to know more about the earnings limitation test. Response: If you are under your full retirement age when you start getting your Social Security payments, $1 in benefits would be deducted for each $2 you earn above $14,160. In the calendar year that you reach your full retirement age, $1 in benefits would be deducted for each $3 you

earn above $37,680. Once you reach your full retirement age, you can work and earn as much income as you want without having your Social Security affected. CSRS employees are subject to the Windfall Elimination Provision (WEP). However, the WEP does not apply until after you retire. Therefore, you would receive your full Social Security benefit until you retire.

ANNUITY REDUCTION QUESTION: I have 29 years of service,am age 47 and covered under the Civil Service Retirement System (CSRS). I will have 30 years of service in a few months and plan to retire then. Will my annuity be reduced by 2 percent for each year that I am under age 55?

JANUARY 2011 | NARFE

HOME LIGHTINGBreakthrough

Recycle NARFE “I caught the NARFE magazine while in the YMCA last week for my daily exercise. To be honest, I took the magazine home with me and read it thoroughly. I’ll be joining NARFE shortly!”

Pass It On!

NARFE | JANUARY 2011

A floor lamp that spreads sunshine all over a room. The Balanced Spectrum® floor lamp brings many of the benefits of natural daylight indoors for glare-free lighting that’s perfect for reading. tudies show that sunshine can both lift your mood and enhance your energy levels. But as we all know, the sun does not always shine. Now, however, there’s a solution to the problem– The Balanced Spectrum® floor lamp will change not only the way you see, but also the way you feel about your living and work spaces. It brings the benefits of natural daylight indoors, simulating the full spectrum of daylight.

The Balanced Spectrum’s 27-watt compact bulb is brighter than a 100-watt ordinary light bulb. With the lamp’s sharp visibility, you will see with more clarity and enjoyment in close tasks such as reading, writing, sewing, and needlepoint. It is especially helpful for aging eyes. Experience sunshine indoors at the touch of a switch. This amazing lamp is not only easy on the eyes, it is easy on the hands as well, featuring a special “soft-touch, flicker-free” rocker switch that is easier to use than traditional Technology revolutionizes the light bulb • Save almost $61 over the life of the bulb • 8,000 hours bulb life • Energy efficient • Shows true colors

toggle or twist switches. And its flexible gooseneck design enables you to get light exactly where you need it. The high-tech electronics, the user-friendly design, and a bulb that lasts 10 times longer than an ordinary bulb–all these features make the Balanced Spectrum® floor lamp a must-have.

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Response: You will not be eligible to retire until you reach age 55. You must meet both age and service requirements to retire voluntarily (i.e., age 55 with 30 years of service). While you will have 30 years of service and meet the service requirements, you are not age 55 and will have to continue to work if you want to receive an immediate annuity. There are, however, two other types of retirement: Voluntary Early Retirement Authority (VERA) and Discontinued Service Retirement (DSR), which you may qualify to receive. In order to qualify, you must have 25 years of service or be age 50 with 20 years of service. A voluntary early retirement is sometimes offered to employees when the agency has budget problems or needs to reduce its work force. A DSR is offered when there is a major reduction in force or transfer of function. The agency would inform employees by letter that they are eligible for a voluntary early retirement or a DSR. Unless you receive a letter from your agency, you are not entitled to a voluntary early retirement or a DSR. Under a VERA or DSR, your annuity would be reduced by 2 percent per year for each year that you are under age 55. ■

NARFE News Bylaws Committee Begins Work;Member Input Sought

he recently named Bylaws Review Committee has begun its work, which will culminate in a proposal to revise the existing NARFE Bylaws. For the committee to produce the best results, input from

NARFE chapters and federations is being sought. No amendments to the current NARFE Bylaws will be considered at the 2012 NARFE National Convention. All of the time will be used to discuss and adjust the proposed revi-

sion. The revision adopted at the Convention will replace the current Bylaws. Anything that chapters or federations think should be changed in the current Bylaws should be communicated to the Bylaws Review Committee for its consideration. Suggestions and proposed Bylaws changes should be sent to Bylaws Review Committee Chair Mary Williams at brc@narfe.org. ■

Persistence Pays Off in Recruiting for Chapter 612

ersistence is a key to successful NARFE recruiting, according to the president of one of the top-recruiting chapters in NARFE. “I have sent applications as many as three or four times to the same

prospects before they joined,” Joseph Cinadr, president of Johnny Appleseed Chapter 612 in Mansfield, OH, told NARFE’s Recruiting & Retention Journal. Chapter 612 shared the first-prize award for small-size chapters in

NARFE’s 2010 Recruiting Contest. Chapter 612 is equally relentless in retention. “We don’t let anybody slip away from us without attempting to

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Continued on p. 48

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Join

NARFE

Who can join?

Today!

To apply:

Membership is open to civilians in any agency of the federal or D.C.* governments including: • Retirees • Active federal employees • Spouses and former spouses of active and retired federal employees • Former employees eligible for deferred annuity • Survivors of those eligible to join NARFE

• Complete the application below. • Enclose payment information, bill pay, check or money order payable to NARFE, or request to be billed. • Or go to our Web site at www.narfe.org. • Or call us at 800-627-3394 and join today! *Prior to October 1, 1987

Enrollment includes membership in a local chapter and the national association, plus a subscription to NARFE’s monthly publication, NARFE magazine.

NARFE MEMBERSHIP APPLICATION For Active and Retired Federal Employees 1. Choose all that apply: Retiree Spouse Survivor

Active employee Former spouse Former employee

2. Also enroll my spouse __________________________

www.narfe.org

Contact Information:

Full Name: Mr./Mrs./Miss/Ms.

full name

3. Please enroll me in NARFE chapter ______________

Street Address

4. __________ $45 x __________ Membership Fee # of People Per Person Enrolling

City/State/ZIP

= __________ Total Payment

Total payment (check, bill pay or money order payable to NARFE) Bill me (Membership starts when payment is received) Charge to my credit card The first year membership fee includes national and chapter dues.

Credit Card Information: MasterCard Card type: Discover

VISA AMEX

Card no. ___________________________________________ Expiration Date ________________ (MM)

(YY)

Name on Card (Print) ________________________________ Signature ____________________________ Date __________ NARFE | JANUARY 2011

Apt./Unit

Phone Number E-mail Address Date of Birth Spouse’s Date of Birth (if applicable) Recruiter’s Membership and Chapter Number

MAIL TO:

NARFE Member Records 606 N. Washington St. Alexandria, VA 22314-1914 Fax: 703-838-7783

1Q 47

Pioneering audiologist invents “reading glasses” for your ears.

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First of all, Neutronic Ear is not a hearing aid; it is a PSAP, or Personal Sound Amplification Product. Until PSAPs, everyone was required It works… to see the doctor, have Just think of the hearing tests, have places you’ll enjoy fitting appointments (numerous visits) and Neutronic Ear then pay for the Parties instruments without Restaurants any insurance coverage. Church These devices can Lectures cost up to $5000 each! Book Groups The high cost and inconvenience drove an Bird-watching innovative scientist to Movies develop the Neutronic And almost Ear PSAP.

but don’t take our word for it. Why pay thousands to make everything sound louder when what you really need is a Personal Sound Amplification Product? We’re so sure you’ll be absolutely thrilled with the quality and effectiveness of this product that we are offering it to the public at a low introductory price with our exclusive trial offer. If, for any reason, you are not completely amazed by how this product improves your life, simply return it for a any daily activity “No Questions Asked” refund of Neutronic Ear has been designed with the the product purchase price within 30 days. finest micro-digital electronic components Call now. available to offer superb performance and Visit us on the web at years of use. Many years of engineering and www.neutronicear.com development have created a product that’s ready to use right out of the box. The patented ™ case design and unique clear tube make it practical and easy to use. The entire unit The Sound Dec ision ™ weighs only 1/10th of an ounce, and it hides comfortably behind either ear. The tube is Call now for the lowest price ever. designed to deliver clear crisp sound while leaving the ear canal open. The electronic Please mention promotional code 41538. components are safe from moisture and wax buildup, and you won’t feel like you have a Neutronic Ear is not a hearing aid. If you believe circus peanut jammed in your ear. Thanks to you need a hearing aid, please consult a physician.

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Continued from p. 46 contact them by phone or letter, where we actively promote dues withholding and life membership,” Cinadr says. The chapter takes advantage of events to gain members. At a convention of the National League of Postmasters, for instance, members of Chapter 612 set up a booth and recruited new members and reinstated those who had let their memberships lapse. The chapter also writes letters to local newspapers and radio stations, alerting the federal community on possible erosion of federal benefits; leaves NARFE material at post offices and encourages postmasters to share it with employees; and sends notices of chapter meetings to local newspapers. Recruiting Contest winners are: Category I: Small-size chapters 1. 198 Fort Dodge, IA 1. 612 Johnny Appleseed-Mansfield, OH

2. 2358 Shenandoah County, VA 3. 2213 Vikingland-Alexandria, MN 4. 1388 Lowndes County, MS 5. 813 Shelbyville, IN 6. 2230 Highland County, OH 7. 1453 Twin City-Texarkana, AR 8. 799 Chanute, KS 9. 537 Hutchinson, KS Category II: Medium-size chapters 1. 2243 NW Suburbia-Twin Cities, MN 2. 52 Palo Alto, CA 2. 1154 North Tampa, FL 3. 1435 Flint River, GA 4. 2104 Dunwoody, GA 5. 68 Bakersfield, CA 6.1375 SW Houston, TX 7. 1643 Dixie Area, KY 8. 1140 Gulf Beaches-S Pinellas Cnty, FL 9. 1501 Warren County, MS Category III: Large-size chapters 1. 1085 Mory Lewis, CO 2. 32 Spokane, WA 3. 124 Rochester, NY 4. 148 Des Moines, IA 5. 119 Fargo/Moorhead, ND 6. 1063 Chambersburg, PA 7. 65 San Francisco, CA 8. 2184 Tulsa Day-Lite, OK 9. 181 Bremerton, WA 10. 969 St. Mary’s County, MD. ■ JANUARY 2011 | NARFE

NARFE Dues Withholding Application Retired Federal Employees Only If you are a Retired Federal Employee and you would like your NARFE dues to be deducted from your annuity payments, fill out the form below.

Dues Withholding Application (Retirees Only) Fill out this form completely and mail to: Attn: Member Records, NARFE, 606 N. Washington St., Alexandria, VA 22314 (Do Not Send Money With This Form). (Please Print) —

—

Civil Service Annuity Number

Social Security Number (9-digits)

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

(Mr., Mrs., Miss, Ms.) Address

Telephone

City, State, ZIP

E-mail

Date of Birth

NARFE Membership Number

NARFE Chapter Number

Authorization I authorize the United States Office of Personnel Management to make appropriate deductions from my annuity payments, not to exceed the amount certified by the National Active and Retired Federal Employees Association as the amount of dues for which I am annually obligated, in accordance with elections I make below and to pay the deducted sum to the National Active and Retired Federal Employees Association (NARFE). This authorization shall also apply to any and all dues changes certified by NARFE membership in accordance with elections I make below:

Do You Authorize Your Spouse’s Dues to Be Withheld from Your Annuity? If YES, enter your spouse’s name and membership number below.

Name

Number

❑ Yes

❑ No

You authorize: Annual NARFE dues of $34.00 plus Chapter dues of record to be withheld annually.

I understand that this authorization shall be valid until NARFE receives & processes my written notice of cancellation in accordance with its agreement with the Office of Personnel Management & that any disputes regarding this authorization shall be a matter between NARFE & 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

NARFE | JANUARY 2011

Date

Dues payments & gifts or contributions to NARFE are not deductible as charitable contributions for federal income tax purposes.

Out & AW bout ith the Chapters For more NARFE chapter and federation photos, go to www.narfe.org. Click on NARFE magazine. To mark Veterans Day, Margaret Tempel of Chapter 2067 in Granite City, IL, presented her chapter’s annual donations to the Jefferson Barracks Division of the St. Louis VA Medical Center. Rocky Buchanan accepted the donations of clothing, toiletries, reading material, and cash for phone cards and reading glasses.

90th Anniversary Merchandise for Sale

NARFE members from Boise and Nampa, ID, met recently with Sen. Mike Crapo, a member of the Senate Finance Committee and the National Commission on Fiscal Responsibility and Reform. Pictured, from left to right: Bob Mallis, vp of Chapter 83 in Boise; Arnold Hartigan, Idaho Federation vp; Dennis Frasier, president of Chapter 1025 in Nampa; Crapo; Nick Steele, Chapter 83 president; and Ruth Ann Smith, Chapter 1025 legislative chair.

ARFE has the following 90th Anniversary merchandise for sale:

• 90th Anniversary PowerPoint Presentation, $5; • 90th Anniversary Lapel Pin, $3.

To order: Go to www.narfe.org, click on Leadership at the top of the page, then click on NARFE 90th Anniversary Merchandise. • 90th Anniversary Book, NARFE: Celebrating 90Years of Service, 1921-2011, $10. To order: See order form, p. 21.

NARFE members contributed for Alzheimer’s research:

Members of Chapter 7 in Arlington, VA, participated in an Info Expo at a local mall to publicize NARFE and recruit members.

SUPPORT ALZHEIMER’S RESEARCH

$9 Million Fund

$8,867,643* *Total as of October 31, 2010 100% of all contributed funds go to Alzheimer’s research. If you have any questions, write to: National Committee Chairman Barb L. Pretzer, 4817 Rockridge Ct. Manhattan, KS 66503

Enclosed is my NARFE Alzheimer’s contribution: $ ___________. Every cent that is contributed is used for research. Please circle:

Mr.

Mrs.

NARFE-Alzheimer’s Research and mail to: Alzheimer’s Association 225 N. Michigan Ave., 17th Floor Chicago, IL 60601-7633

Ms.

Address _____________________________________________________________ City _______________________________ State _________ ZIP ______________ Chapter number _______________________ Credit Card Information: ❑ Visa

Your charitable contribution is tax deductible to the fullest extent allowed by law. Write your chapter number on check; make it payable to:

Miss

Name _______________________________________________________________

❑ MasterCard

❑ Discover

❑ AMEX

Card Number: __________________________________________________________ Expiration Date:________(mm)/_________(yy) 3-Digit Security Code: _________ Name on Card: (print) ___________________________________________________ Signature:_________________________________________ Date: _______________ JANUARY 2011 | NARFE

Letters Against C-CPI-U

egarding the “New Method for Deciding COLAs Discussed” article in the November issue, I thought the purpose of the cost-of-living adjustment (COLA) was to protect one’s standard of living against inflation. However, the “substitution effect” on which the C-CPI-U is based is really just a euphemism for a reduction in one’s standard of living forced by economic necessity as prices rise. So use of the C-CPI-U would undermine the purpose of the COLA as a matter of principle. I hope NARFE’s stance on adoption of the C-CPI-U ultimately turns out to be less accommodating than the article seems to suggest. John Miller, Lincoln, CA

Thanks to NARFE

few years ago, I thanked NARFE for pointing out in NARFE magazine that federal retirement pay was not taxable in my state. Fortunately, that information

REMINDER: We must enlist as many members as possible to defend our benefits. Ask a friend to join NARFE.

was very timely, and I quickly amended the three state tax returns I’d filed that did not deduct that income. All were favorably acted upon, and I received very welcome refunds for each of those three years. Now I can say thanks again to NARFE for a $250 check, plus interest, I just received from the Department of the Treasury, representing a credit on my 2009 federal tax return. When I filed that return, I was not

aware that Congress had provided for federal retirees to get a credit since they were left out of the original stimulus bill that gave all other retirees a $250 check. So, thanks go to NARFE for both initially lobbying to get that credit for us and then for publicizing it in the monthly magazine. This goes to show that we get great dividends from our very modest annual NARFE dues! Dick McLane, Springfield, IL

Book Lover

hank you for sending the CD of the PowerPoint presentation on NARFE’s history. At a recent meeting of the Bismarck-Mandan (ND) Chapter Executive Committee, I stressed how impressed I am with the book, NARFE: Celebrating 90 Years of Service, 1921-2011, and I have been encouraging others to purchase a copy for their own use and reference. I will treasure the book and the CD as NARFE keepsakes forever. Arden Mathison, Bismarck, ND

CHANGE OF ADDRESS: Contact Member Records toll-free at 800-456-8410, or send change of address by postal mail to NARFE Headquarters, ATTN: Member Records, or by e-mail to memberrecords@narfe.org.

Q&A: To obtain an answer to a retirement benefits question, call 703-838-7760 and ask for the Retirement Benefits Service Department; send your question by postal mail to NARFE Headquarters, ATTN: Retirement Benefits; or submit it by e-mail to retbenefits@narfe.org. OUT & ABOUT: Submit photo with caption information by postal mail to NARFE Headquarters, ATTN: Out & About, or by e-mail to rl@narfe.org. LETTERS TO THE EDITOR: Letters to the editor may be edited for grammar, clarity and length. All letters must be signed. Send by postal mail to NARFE Headquarters, ATTN: Letters to the Editor, or by e-mail to rl@narfe.org. NARFE | JANUARY 2011

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

MOVING SERVICES

NARFE MEMBER HOMEBENEFITS 1-800-666-9203 http://narfe.myhomebenefits.com • Earn thousands in cash-back rewards when you buy or sell a home* • Shop competitive mortgage rates, receive discounts on closing costs, plus take advantage of your VA Loan Benefits • Receive preferred pricing on interesete moving services with the nation’s most trusted moving company – Allied Van Lines! *State restrictions apply. Call or visit website for details.

BEKINS VAN LINES 1-800-456-6832 (M-F, 8 a.m.-5 p.m. CT) narfe@bekins.com All NARFE members will receive discounted pricing for all interstate shipments. Discount will apply to packing and moving services and valuation protection. All intrastate shipments, locals and international moves will be competitive in cost based on your geographical location. Mention you are a NARFE member and transportation agreement #00930.

VACATION RENTALS

Endless Vacation Rentals® As a member of NARFE, you will receive 10% off the “Best Available Rate” at vacation rental properties booked at www.evrentals.com/narfe or by calling 1877-670-7088, prompt 3, and providing promotion code 20672 at time of booking.

INSURANCE

TRAVEL

NARFE INSURANCE SERVICES

ALASKA CRUISE Specials!

1-800-233-5764 Insurance plans designed and administered exclusively for NARFE members. Call for information on Whole and Term Life, Hospital Indemnity, Accidental Injury and Death Plan, Dental Plan and Cancer Care Plan. For information on Long Term Care call the Long Term Care Unit at 1800-358-3795.

GEICO: 1-800-368-2734 NARFE members with good driving records may be eligible for quality automobile insurance from GEICO. Ask about the NARFE discount now available to members in many states. Call today for your free, no-obligation rate quote. Be sure to mention that you’re a NARFE member! • Discount amount varies in some states • Discount not available in all states or in all GEICO companies • One group discount applicable per policy.

EMERGENCY SERVICES SINCE 1974 1-800-423-3226 Medical Air Services Association has been the industry leader in prepaid emergency assistance services for more than 30 years. NARFE members have experienced MASA’s “peace of mind” services since 2001. Now NARFE members are entitled to even more: air ambulance transportation, helicopter transportation, ground ambulance, vehicle return, mortal remains transport, and much more! Call MASA Today. It Could Save Your Life!

7-nt rates starting at just $489 • Round trip, One-Way and CruiseTours • Extra amenities on many sailings • Exclusive NARFE Group rates • Discounted insurance and shore excursions! Special NARFE Hosted Cruise August 27, 2011 ~ from $669!

1-800-607-4538 Website: www.NARFEtravel.com

HEARING BENEFITS TRUHEARING The TruHearing program can save you hundreds of dollars: • Free hearing screening • 45-day, money-back guarantee • 3-year warranty • Free one-year supply of batteries • 1,400 hearing professionals nationwide • 12-months, no interest financing (available upon approved credit)

Call to schedule your appointment

877-360-2442 Operators available Mon-Fri 9 a.m.-9 p.m. (East Coast time)

JANUARY 2011 | NARFE

HOTELS

CAR RENTALS

CREDIT UNION

ALAMO/NATIONAL CAR RENTAL

NARFE’S OFFICIAL CREDIT UNION

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

1-800-354-2322 — www.alamo.com Welcome to Alamo Country. Where NARFE members get unlimited mileage and year-round discounts off Alamo’s already great rates. Book with your travel agent or Alamo®. Be sure to request I.D. Number 262544 and Rate Code BY (A-1 for weekend rentals) at the time of reservation. (Same ID number and code applies to National Car Rental.)

As a member of NARFE, you have the privilege of joining NARFE Premier Federal Credit Union, which has been serving members since 1935. We offer extensive services at competitive rates to members nationwide. Your savings are federally insured to at least $250,000 and backed by the full faith and credit of the United States Government. For more information, call 800-3281500, e-mail jparish@narfepremierfcu. org or visit us at NARFEpremierfcu.org.

CREDIT CARD AVIS: 1-800-331-1441 WYNDHAM HOTEL GROUP As a member of NARFE, you will receive up to 20% off the “Best Available Rate” at participating locations when you travel. Book online or call and give agent your special discount ID number, #20672, at time of booking to receive discount. Whether you are looking for an upscale hotel, an all-inclusive resort or something more cost-effective, we have the right hotel for you... and at the right price. So start saving now. Call our special member-benefits hotline 1-877-670-7088 and reserve your room today at one of these fine hotels: Wyndham Hotels and Resorts®, Days Inn®, Ramada Worldwide®, Super 8®, Wingate By Wyndham®, Baymont Inns and Suites®, Hawthorn Suites® By Wyndham, Microtel Inns and Suites®, Howard Johnson®, Travelodge® and Knights Inn®.

NARFE | JANUARY 2011

The employees/owners of Avis offer guaranteed low rates and quality services to members of NARFE. Mention ID# A991900.

HEALTH SCREENING

LIFE LINE SCREENING Life Line Screening, America’s leading provider of community-based preventive health screenings, will conduct the following screenings using state-of-the-art ultrasound technology in your neighborhood: 1. Stroke/Carotid Artery 2. Abdominal Aortic Aneurysm 3. Atrial Fibrillation 4. Peripheral Arterial Disease. You will receive a confidential written report within 21 days. Life Line Screening and NARFE encourage you to share these test results with your doctor. All four screenings cost just $135. To schedule an appointment, please call 1-800-324-9906 and give the operator code number: BKHN075 or visit www.lifelinescreening. com/NARFE. Coverage may vary and may not be available in all states.

Bank of America now offers the officially approved credit card program for NARFE, featuring the Platinum Plus® MasterCard® with WorldPoints. This is the only credit card that helps support NARFE every time you use it to make a purchase–at no additional cost to you. Call toll-free 1-866-438-6262 Use NARFE’s full name, not NARFE. Use priority code: UABEWD.

NARFE MERCHANDISE NARFE GENERAL STORE

Order NARFE name badges and apparel, including jackets, baseball caps, polo shirts and T-shirts! See MEMBER PERKS on the NARFE Web site, or go to: www.narfegeneralstore.com. Toll-Free Phone: 877-866-0102 Fax: 301-371-6824

For the Record The chart below tracks the CPI-W, the monthly inflation change, and the cumulative percentage gain for the next CSRS and Social Security COLA. CPI-W October 2010 November December January 2011 February March April May June July August September

214.6

MONTHLY % CHANGE % CHANGE FROM 215.5 +0.1

November’s Highs and Lows ByTracey Ray

n early November, stock markets rose to new recovery highs after the Federal Reserve announced that it would spend $600 billion to buy Treasury bonds over the next eight months in an effort to lower long-term interest rates and boost economic activity. But stocks took a tumble midmonth amid signs China may need to cool off its red-hot economy by raising interest rates. China has been the global economy’s strong spot, and there are fears that weakness there would cause a widespread slowdown. When worries about Ireland needing a financial rescue package were added to the mix, the S&P 500 (C Fund) posted its largest one-day decline since August, and problems in the eurozone caused the I Fund to be the worst performer in November.

Tracey Ray is chief investment officer of the Thrift Savings Plan. 54

-0.4

October Index Up Slightly Editor’s note: Based on price-index figures from July-September 2010, there will be no automatic cost-of-living adjustment (COLA) for 2011. New information below relates to the 2012 COLA calculation. he Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 0.1 percent in October. To calculate the 2012 cost-of-living adjustment (COLA), the indices of July, August and September 2011 will be averaged for a third-quarter determinant, which will be compared with the 2008 third-quarter base of 215.495 (because of price deflation in the past two measurement years, the 2008 third-quarter average is still the point of comparison). The October index of 214.623 is down 0.4 percent from the base. Benefits awarded under the Federal Employees’ Compensation Act (FECA) to individuals suffering work-related injuries or illnesses are adjusted according to each calendar year’s percentage change in the CPI-W. October’s index is 1.4 percent higher than the December 2009 base index of 211.703. ■

Thrift Savings Plan Investments* Month G Fund 2009 December 0.25% 0.29% 2010 January February 0.24% March 0.27% April 0.28% May 0.28% June 0.24% July 0.23% August 0.22% September 0.17% October 0.18% November 0.17% Last 12 Months 2.85% Month 2009 December 2010 January February March April May June July August September October November ) Last 12 Months

L Income 0.59% (0.45%) 0.74% 1.43% 0.50% (1.50%) (0.61%) 1.81% (0.63%) 2.00% 0.92% (0.05%) 4.80%

F Fund (1.55%) 1.54% 0.38% (0.11%) 1.07% 0.85% 1.56% 1.07% 1.28% 0.17% 0.36% (0.57%) 6.17%

C Fund 1.94% (3.60%) 3.11% 6.04% 1.58% (7.99%) (5.24%) 7.01% (4.51%) 8.92% 3.80% 0.01% 9.95%

S Fund 6.57% (2.43%) 4.89% 7.39% 4.82% (7.51%) (6.90%) 7.00% (5.59%) 11.47% 4.48% 3.00% 28.10%

I Fund 1.43% (5.17%) 0.06% 6.28% (2.35%) (11.20%) (1.75%) 10.78% (3.14%) 9.81% 3.63% (4.84%) 1.27%

L 2010 0.70% (0.58%) 0.81% 1.61% 0.51% (1.64%) (0.68%) 1.81% (0.62%) 2.00% 0.92% (0.05%) 4.83%

L 2020 1.50% (2.03%) 1.61% 3.75% 0.76% (4.98%) (2.34%) 4.82% (2.29%) 5.54% 2.29% (0.49%) 7.84%

L 2030 1.85% (2.49%) 1.94% 4.52% 0.94% (6.07%) (2.98%) 5.80% (2.88%) 6.77% 2.78% (0.56%) 9.15%

L 2040 2.12% (2.88%) 2.18% 5.15% 1.05% (6.97%) (3.47%) 6.60% (3.33%) 7.76% 3.16% (0.64%) 10.06%

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

JANUARY 2011 | NARFE

Finally, a cell phone that’s… a phone!

y ice b Pr ced du 48 Re $

o t N trac n Co

“Well, I finally did it. I finally decided to enter the digital age and get a cell phone. My kids have been bugging me, my book group made fun of me, and the last straw was when my car broke down, and I was stuck by the highway for an hour before someone stopped to help. But when I went to the cell phone store, I almost changed my mind. The phones are so small I can’t see the numbers, much less push the right one. They all have cameras, computers and a “global-positioning” something or other that’s supposed to spot me from space. Goodness, all I want to do is to be able to talk to my grandkids! The people at the store weren’t much help. They couldn’t understand why someone wouldn’t want a phone the size of a postage stamp. And the rate plans! They were complicated, confusing, and expensive… and the contract lasted for two years! I’d almost given up when a friend told me about her new Jitterbug phone. Now, I have the convenience and safety of being able to stay in touch… with a phone I can actually use.”

Questions about Jitterbug?

Try our pre-recorded Toll-Free Hotline1-888-827-9409. The cell phone that’s right for me. Sometimes I think the people who designed this phone and the rate plans had me in mind. The phone fits easily in my pocket, but it flips open and reaches from my mouth to my ear. The display is large and backlit, so I can actually see who is calling. With a push of a button I can amplify the volume, and if I don’t know a number, I can simply push one for a friendly, helpful operator that will look it up and even dial it for me. The Jitterbug also reduces background noise, making the sound loud and clear. There’s even a dial tone, so I know the phone is ready to use.

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Aﬀordable plans that I can understand – and no contract to sign! Unlike other cell phones, Jitterbug has plans that make sense. Why should I pay for minutes I’m never going to use? And if I do talk more than I plan, I won’t find myself with no minutes like my friend who has a prepaid phone. Best of all, there is no contract to sign – so I’m not locked in for years at a time or subject to termination fees. The U.S. – based customer service is second to none, and the phone gets service virtually anywhere in the country. Monthly Minutes Monthly Rate Operator Assistance 911 Access Long Distance Calls Voice Dial Nationwide Coverage Trial Period

100

$14.99 24/7 FREE No add’l charge FREE Yes 30 days

$19.99 24/7 FREE No add’l charge FREE Yes 30 days

More minute plans available. Ask your Jitterbug expert for details.

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Available in Red, White (shown), and Graphite.

Call now and get a FREE GIFT. Try Jitterbug for 30 days and if you don't love it, just return it. Why wait, the Jitterbug comes ready to use right out of the box. The phone comes preprogrammed with your favorite numbers, and if you aren’t as happy with it as I am you can return it for a refund of the purchase price. Call now, the Jitterbug product experts are ready to answer your questions.

Jitterbug Cell Phone Call now for our NEW low price.

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IMPORTANT CONSUMER INFORMATION: All rate plans require the purchase of a Jitterbug phone and a one-time set up fee of $35.00. Coverage and service is not available everywhere. There are no additional fees to call Jitterbug’s 24-hour U.S. Based Customer Service. However, for calls to an Operator in which a service is completed, minutes will be deducted from your monthly balance equal to the length of the call and any call connected by the Operator, plus an additional 5 minutes. Rate plans do not include government taxes or assessment surcharges. Prices and fees are subject to change. Savings are based on marketing materials from nationally available cellular companies as of June, 2010 (not including family share plans). The full price of the Jitterbug Phone will be refunded if it is returned within 30 days of purchase, in like-new condition, and with less than 30 minutes of usage. A Jitterbug Phone purchased from a retail location is subject to the return policy of that retail location. The Jitterbug phone is created together with worldwide leader Samsung. Jitterbug is a registered trademark of GreatCall, Inc. Samsung is a registered trademark of Samsung Electronics America, Inc. and its related entities. Copyright ©2010 GreatCall, Inc. Created together with worldwide leader Samsung. Copyright © 2010 by firstSTREET for Boomers and Beyond, Inc. All rights reserved.

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Haband #1 Bargain Place, Jessup, PA 18434-1834 Send ____ slacks. I enclose $______ purchase price plus $5.99 toward postage. Imported In GA add sales tax. On-Line Quick Order: ALL THESE SIZES! Waist: 32 34 36 38 40 42 44 *Big Men Sizes: 46 48 50 add just $5 more per pair Inseams: XS(25-26) S(27-28) M(29-30) L(31-32) XL(33-34)

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Card # _____________________________________ Exp.: ____/____ Phone/Email _______________________________________________________ Mr. Mrs. Ms. _______________________________________________________ Address ____________________________________________________________ Apt. # ______ City ___________________________________________________ State __________________________________________ Zip _________________ When you pay by check, you authorize us to use information from your check to clear it electronically. Funds may be withdrawn from your account as soon as the same day we receive your payment, and you will not receive your check back from your financial institution.