June 2016 NARFE Magazine

JUN

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P.30

DEFERRED AND POSTPONED ANNUITIES

P.40

TAXATION RULES FOR INVESTMENT EARNINGS

Volume 92 • Number 6

COVER STORY

AFTER THE BREACH

Protecting Identities, Data

P.22

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Blue Cross and Blue Shield Service Benefit Plan will pay a hearing aid benefit up to $2,500 every 3 calendar years for adults age 22 and over, and up to a $2,500 total per calendar year for members up to age 22. Do not rely on this communication piece alone for complete benefit information. All benefits are subject to the definitions, limitations, and exclusions in your Service Benefit Plan brochure. The Blue365® Discount Program offers access to savings on items that you may purchase directly from independent vendors, which may be different from items covered under your Service Benefit Plan or any other applicable federal healthcare program. For hearing aids, acupuncture, chiropractic and vision services, you must exhaust your Service Benefit Plan benefits first. To find out what is covered under your policy, contact the Service Benefit Plan. The products and services described herein are neither offered not guaranteed under any local Blue company’s contract with the Medicare program. In addition, these items are not subject to the Medicare appeals process. Any disputes regarding these products and services are not subject to the Service Benefit Plan’s Disputed Claims process. Blue Cross and Blue Shield Association (BCBSA) may receive payments from Blue365 vendors. Neither the Service Benefit Plan, BCBSA, nor any local Blue company recommends, endorses, warrants or guarantees any specific Blue365 vendor or item. The Service Benefit Plan reserves the right to change, modify, or terminate any item and vendors made available through Blue365, at any time. Blue Cross and Blue Shield Association is an association of independent, locally operated Blue Cross and Blue Shield Companies. State and local taxes and/or fees may apply. Available at participating locations until December 31, 2016.

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WASHINGTON WATCH

6

Grass-Roots Action Builds Relationships in an Election Year

7

Conflict of Interest Rule Challenged in Congress

8

Long-Term Care Rates Will Rise Substantially

8

House OKs Administrative Leave Bill

9

NARFE-PAC Update: Our Goal Is in Sight!

10

NARFE Bill Tracker

COLUMNS

22

4

From the President

40 Managing Money

COVER STORY AFTER THE BREACH. Nearly a year after disclosure of two massive data breaches at the Office of Personnel Management, find out what’s being done to safeguard identities and data.

42 The Informed Citizen 44 Alzheimer’s Update DEPARTMENTS

PUTTING AN ANNUITY ON HOLD. Departing federal employees who aren’t eligible for an immediate annuity have options.

30

14 Questions & Answers 46 For the Record: TSP

Returns, Retirement Claims Status, Countdown to COLA

48 NARFE News

Strategic Planning

64 The Way We Worked On the Web

SPECIAL SECTIONS

VISIT US ONLINE AT:

50 National Convention:

www.narfe.org

Seize the Opportunities!

LIKE US ON FACEBOOK:

NARFE National Headquarters FOLLOW US ON TWITTER:

@narfehq

53 NARFE 2015 Financial Statements

ON THE COVER

Illustration by Bill Pragluski, Critical Stages, LLC

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JUNE 2016 | Volume 92 | Number 6

EDITOR Margaret M. Carter EDITORIAL ADMINISTRATOR Toni Vallario GRAPHIC DESIGN Charlene Gridley

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

EDITORIAL BOARD Richard G. Thissen, Jon Dowie REGIONAL VICE PRESIDENTS EDITORIAL OFFICE: narfe magazine 606 North Washington St. Alexandria, VA 22314-1914 Phone: 703-838-7760 Fax: 703-838-7781 Email: communications@narfe.org ADVERTISING SALES: Warren Berger Media People Inc. 122 East 42nd St., Suite 1622 New York, NY 10168 Phone: 212-779-7172, ext. 223 Email: wberger@mediapeople.com

NARFE FOR THE VISUALLY IMPAIRED ON THE TELEPHONE: This publication can be heard on the telephone by persons who have trouble seeing or reading the print edition. For more information, contact the National Federation of the Blind NFB-NEWSLINE® service at 866-5047300 or go to www.nfbnewsline.org.

ON DIGITAL AUDIO: Issues of narfe magazine are also available in audio format through the National Library Service for the Blind and Physically Handicapped (NLS). For availability, call 202-727-2142 or your local NLS service provider.

The Association, since July 1970, has been classified by the IRS as a tax-exempt labor organization [not a union]; however, dues and gifts or contributions to the Association are not deductible as charitable contributions for income tax purposes.

REGION I James P. Crawford (Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont) TEL: 603-630-5191 EMAIL: crawfordjim62@gmail.com REGION II Evelyn Kirby (Delaware, District of Columbia, Maryland, New Jersey and Pennsylvania) TEL: 410-604-1141 EMAIL: ekirby@atlanticbb.net REGION III Jerry Janci (Alabama, Florida, Georgia, Mississippi, Puerto Rico, South Carolina and Virgin Islands) TEL: 662-412-2029 EMAIL: lettermanj@aol.com REGION IV Edward J. Konys (Illinois, Indiana, Michigan, Ohio and Wisconsin) TEL: 937-470-0566 EMAIL: region4vp@gmail.com REGION V Carol R. Ek (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota) TEL: 620-241-1131, CELL: 620-504-2202 EMAIL: ek617@att.net

HERE’S HOW TO CONTACT US… TO JOIN NARFE:

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

CALL (TOLL-FREE) 800-456-8410, EMAIL memberrecords@narfe.org OR LOG ON TO www.narfe.org and go to “My Account”

REGION VI Marshall L. Richards (Arkansas, Louisiana, Oklahoma, Republic of Panama and Texas) TEL: 903-660-2784 EMAIL: pappysdad@cobridge.tv REGION VII Rodney L. Adelman (Arizona, Colorado, New Mexico, Utah and Wyoming) TEL: 623-505-4719 EMAIL: narfe7vp@cox.net REGION VIII Helen L. Zajac (California, Guam, Hawaii, Nevada and Republic of Philippines) TEL: 707-644-7565 EMAIL: HLZajac125@gmail.com REGION IX Lanny G. Ross (Alaska, Idaho, Montana, Oregon and Washington) TEL: 360-692-9741 EMAIL: lannyjean@comcast.net REGION X William Shackelford (Kentucky, North Carolina, Tennessee, Virginia and West Virginia) TEL: 703-830-6590, CELL: 703-201-6304 EMAIL: wshack1951@aol.com

TO REACH A FEDERAL BENEFITS SPECIALIST:

EMAIL fedbenefits@narfe.org NARFE HEADQUARTERS

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

www.narfe.org

narfe (ISSN 1948-4453) is published monthly by the National Active and Retired Federal Employees Association (NARFE), 606 N. Washington St., Alexandria, VA 22314. Periodicals postage paid at Alexandria, VA, and additional mailing offices. Members: Annual dues includes subscription. Nonmember subscription rate $45. Postmaster: Send address change to: NARFE Attn: Member Records, 606 N. Washington St., Alexandria, VA 22314. To ensure prompt delivery, members should also forward changes of address without delay. Because of the volume involved, NARFE cannot acknowledge nor be responsible for unsolicited pictures and manuscripts, although every reasonable precaution is taken. All submissions become the property of NARFE. Copyright © 2016, NARFE. Advertisements in the magazine are not endorsements of products and/or services by NARFE, unless officially stated in the ad. We shall accept advertising on the same basis as other reputable publications: that is, we shall not knowingly permit a dishonest advertisement to appear in narfe, but at the same time we will not undertake to guarantee the reliability of our advertisers.

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DID YOU KNOW?

NARFE members could get a special discount on GEICO car insurance.

Tell GEICO you’re a member of NARFE and see how much more you could save!

Call 1-800-368-2734 or visit geico.com/fed/narfe for your free quote on GEICO auto insurance today!

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#MemberDiscount Some discounts, coverages, payment plans and features are not available in all states or all GEICO companies. Discount amount varies in some states. One group discount applicable per policy. Coverage is individual. In New York a premium reduction may be available.

GEICO is a registered service mark of Government Employees Insurance Company, Washington, D.C. 20076; a Berkshire Hathaway Inc. subsidiary. GEICO Gecko image © 1999-2016. © 2016 GEICO

From the President

NARFE’S EVOLUTIONARY PROCESS

T

he NARFE National Convention will quickly be upon us. Preparations are at a high pitch as we prepare for

August 28-September 1 in Reno, NV. As you know, delegates at the 2014 National Convention voted for the establishment of a standing Strategic Planning Committee. In February 2015, I appointed a Strategic Planning Committee and a Strategic Planning Team. At the same time, NARFE hired a consultant to ensure the strategic planning process was completed in an efficient and effective manner, considering all of the issues that NARFE faces now and will confront in the future.

The partnership of the Committee, Team and consultant worked diligently to develop a series of recommendations and a draft Strategic Plan, which was reviewed, revised and approved by the NARFE National Executive Board (NEB) this past November. The Strategic Plan recom-

mended, and the NEB approved, the hiring of an executive director. The NEB also voted, as recommended in the plan, to draft resolutions to bring to the convention calling for optional chapter membership; one member, one vote; and NEB authority to adjust National dues by up to 10 percent during a two-year period.

The decision to hire an executive director was based on the need for someone with professional association management experience and skills to direct Headquarters operations. The position would provide NARFE nonprofit best practices as we strive to grow membership and revenue, and it would assure us greater continuity. Headquarters is beginning the process that will help us find the best person possible to fill this important new role. This entails hiring a search firm, developing a job description, conducting detailed interviews involving the NEB and the staff, and drafting an employment contract.

We also have made progress on the resolution front. At its March meeting, the NEB approved the three resolutions noted above, which have been posted on the National Convention web page. I will go into detail on each of these in the July issue. In the meantime, I urge you to read the entire Strategic Plan document (available at www.narfe.org) and keep an open mind about the need for our venerable Association to evolve.

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

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Washington Watch

GRASS-ROOTS ACTION BUILDS RELATIONSHIPS IN AN ELECTION YEAR

I

n five months, Americans will go to the polls and vote. In addition to the presidency, all of the seats in the House of Representatives and one-third of Senate seats will be on ballots.

While campaigns used to move into high gear at Labor Day, earlier primaries mean that we are seeing more campaigns in full swing as early as Memorial Day, and even earlier in some states. This provides NARFE members with several months in which they can actively reach out to elected officials and candidates. Building relationships now can pay dividends later.

Because of the election, members of Congress are scheduled to be in their districts and states more between now and November 8 (see Congressional Recess Calendar, p. 7). This means more time to meet with constituents, but it also means that some legislative action will be pushed back until after the election.

There are many ways that NARFE members can get involved in grass-roots advocacy during the summer: • Community Parades and Festivals. The easiest way to get NARFE’s message out is through simple visibility. If you are attend6

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ing a community parade or festival, wear your NARFE shirts and hats. Elected officials and candidates who attend these events will see your gear. And you also can talk to them for a few minutes about NARFE issues.

• Town Hall Meetings. Your members of Congress may host town hall meetings during the extended recesses. While they will not talk about their campaigns at an official event, it is an opportunity for them to talk about what they are doing for their constituents. That means it is also an opportunity to ask questions about NARFE issues.

NARFE’s Maryland Federation sponsored a candidate forum at which Reps. Chris Van Hollen, left, and Donna Edwards, who were vying for the Democratic nomination for Senate, appeared.

Photo from Maryland Federation video

• Candidate Forums. Similar to a town hall meeting, candidate forums are opportunities for candidates (both challengers and incumbents) to talk about the issues facing Congress. If the forum is taking audience questions, you can ask about NARFE issues.

Better yet, your chapter or federation can host a NARFE-sponsored candidate forum. For more information on how to do that, you can review the February and March issues of narfe magazine, archived at www.narfe.org.

• Campaign Volunteering.

NARFE is nonpartisan, but members are political. In your personal capacity, you can volunteer with a campaign for a congressional candidate. This provides you an opportunity to get to know the candidate and his or her senior staff, some of whom may follow the candidate to Washington if the campaign is successful. Politics is local, and it is all about building relationships. Working on a campaign is an easy way to start building the relationship with a possible member of Congress.

To further help NARFE members and leaders plan their advocacy strategies for the summer, the Protect America’s Heartbeat Toolkits all have been updated. In addition to how-to guides, there are issue briefs and materials that you can leave with elected officials and candidates. To find this information, visit the revised Protect America’s Heartbeat website at www.narfe.org/ heartbeat.

Don’t forget to tell the Legislative Department about your advocacy at advocacyinaction@ narfe.org.

—BY SARAH WEISSMANN, GRASS-ROOTS PROGRAM MANAGER

Legislative Resources • Legislative Hotline: A weekly update of legislative news, compiled by the NARFE Legislative Department staff, distributed via email and available by phone (toll-free) at 877-217-8234 and online at www.narfe.org.

• Legislative Action Center: A one-stop site to send a letter to Congress, and more, at www.narfe.org.

CONFLICT OF INTEREST RULE CHALLENGED

A

s expected, legislation to block implementation of the new retirement investment conflict of interest rule has advanced in the House.

On April 6, the Department of Labor (DOL) issued its final rule to ensure individuals saving for retirement are protected by a “best interest” or “fiduciary” standard when receiving investment advice.

On April 21, the House Education and the Workforce Committee approved a resolution of disapproval of the DOL conflict of interest rule.

The resolution, H. J. Res. 88, was approved by the House committee along party lines, with 22 Republicans voting in favor and 14 Democrats voting against. In advance of the vote, NARFE joined 46 other national organizations in a letter urging the committee to oppose the resolution of disapproval.

The bill passed the full House April 28 on a 234-183 party-line vote. Its Senate prospects are unclear. However, even if it is passed by the Senate, it is not expected to survive a presidential veto.

“Release of this rule is a major accomplishment that will help to safeguard the retirement savings of all Americans, including federal employees and retirees who are currently receiving poor advice regarding their Thrift Savings Plan (TSP) holdings,” said NARFE National President Richard G. Thissen. “When you turn to an adviser

for guidance on how to invest your hard-earned retirement savings, you should expect to receive advice that is in your best interest, not theirs.”

Previously, the best interest standard did not apply to advice given on a one-time basis, advice regarding rollovers or advice on investing in an individual retirement account (IRA). This allowed some financial advisers to provide recommendations that served their own interests instead of their clients’. The adviser may have received a better commission, while the investor may have been subject to excessive costs, poor performance or unnecessary risk.

NARFE has been particularly concerned that federal employees invested in low-fee TSP funds have not been adequately protected from unsound financial advice regarding their TSP holdings and options for rollovers once retired.

The new standards will take effect in April 2017.

—BY JOHN HATTON, DEPUTY LEGISLATIVE DIRECTOR

CONGRESSIONAL RECESS CALENDAR MAY 27-JUNE 6 House, Senate out JUNE 27-JULY 4 House out JULY 1-JULY 5 Senate out JULY 18-SEPT 5 House, Senate out OCT 1-NOV 11 House out OCT 10-NOV 11 Senate out

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Washington Watch

LONG-TERM CARE RATES WILL RISE SUBSTANTIALLY

R

ates will increase significantly this year for enrollees in the Federal Long Term Care Insurance Program (FLTCIP). News of the rate hike coincided with word that the Office of Personnel Management (OPM) had awarded a new seven-year contract to John Hancock Life and Health Insurance Company to underwrite and administer the program. John Hancock was the only bidder for the contract.

FLTCIP provides coverage to help pay for the cost of care when an individual needs help with everyday activities or suffers from severe cognitive impairment such as Alzheimer’s disease.

At press time, rates for current enrollees were being finalized but are expected to rise substantially.

OPM said it is working with John Hancock “to ensure that, whenever possible, policyholders will be offered different policy options to help mitigate or offset the effects of any increase they may experience.” The rate change will take effect no earlier than fall 2016.

Long Term Care Partners, a division of John Hancock that administers the program, will send every current enrollee a letter prior to the effective date of the premium increases, explaining benefit options.

NARFE expressed disappointment in the rate hike and will stay on top of developments, conferring with OPM, Long Term Care Partners and members of Congress.

Rates for current enrollees last increased in 2009. Rates for new enrollees rose in August 2015.

HOUSE OKS ADMIN LEAVE BILL

T

wo different bills are moving through Congress that would define and restrict the use of “administrative leave” by federal agencies. The legislative action is prompted by widespread belief among lawmakers that the term as currently applied is too broad and is often abused by agencies.

The House of Representatives passed a bill April 26 that would define administrative leave and limit its use by federal agencies to 14 days per employee per calendar year. Under the Administrative Leave Reform Act, H.R. 4359, if an employee presents a workplace threat, agencies could extend ad-

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min leave to 30 days. If an agency extends the leave, it must report information on the employee and the infraction to the congressional committees of jurisdiction.

Meanwhile, a Senate committee has advanced a separate bill that also addresses problems associated with administrative leave. That bill has garnered more support from federal employee groups.

The Administrative Leave Act, S. 2450, would establish a definition of administrative leave that is separate from other forms of paid leave or excused absences. It also would create new categories of leave, investigative or notice leave, separate from administrative

MYTH vs.

REALITY MYTH: H.R. 711, a bill to change the Windfall Elimination Provision (WEP), is the same as previous repeal bills that failed to become law.

REALITY: H.R. 711, the Equal Treatment of Public Servants Act, is a WEP reform bill, NOT a repeal bill. Under this bill, individuals who turn(ed) age 62 before 2017 would have their WEP penalty reduced by an estimated 50 percent starting in 2017.

Those who turn 62 in or after 2017 would have a new, fairer WEP formula applied to their Social Security payments.

NARFE is hopeful that this bill will move through the legislative process because it is sponsored by the chairman of the Ways and Means Committee, which has jurisdiction over the legislation, would pay for itself through greater enforcement of WEP reporting by state and local government retirees, and has bipartisan support.

leave, for extended excused absences due to personnel matters.

Agencies could not use investigative or notice leave unless certain criteria are met. Additionally, it requires agencies to provide employees with explanations of why they are being placed on investigative leave or notice leave and keep records of these new forms of leave. The bill also directs the Office of Personnel Management to keep track of administrative leave use.

—BY JESSICA KLEMENT, LEGISLATIVE DIRECTOR

NARFE-PAC UPDATE: OUR GOAL IS IN SIGHT; HELP US GET THERE!

T

hanks to strong member support, NARFE-PAC is well on its way to increasing NARFE’s political influence and electing fed-friendly members of Congress in the 2016 congressional elections.

As of March 2016, NARFE-PAC has raised $932,184 from 20,190 NARFE members thus far in the 2015-2016 election cycle, closing in on the $1 million goal set at the beginning of the cycle! NARFEPAC has raised more to date than during the entire 2013-2014 election cycle. If you have not yet

contributed, please consider doing so to help put us over the top! You can easily do so by using the form below, or via the NARFE website.

NARFE-PAC, the political arm of the Association, protects NARFE members’ pay and benefits by raising and contributing money to elect members of Congress who understand and support the federal community.

Contributions help build relationships between NARFE members and staff and key lawmakers.

NARFE-PAC is a separate, segregated fund of the Association

financed solely through voluntary contributions by NARFE members made explicitly for political purposes. By law, membership dues and other general funds cannot be used by NARFE-PAC. NARFE-PAC contributes to congressional campaigns but does not contribute to presidential campaigns. Learn more about NARFE-PAC and access PAC contribution and disbursement data in the NARFE-PAC section on the NARFE website, www.narfe.org.

—BY JASON FREEMAN, POLITICAL AND LEGISLATIVE SPECIALIST

NARFE-PAC CONTRIBUTION FORM I would like to be a SUSTAINER and make a monthly credit card contribution to NARFE-PAC of: q $25/month q $10/month

Monthly contributors of $10 or more will receive the NARFE-PAC Sustainer lapel pin and a NARFE duffle bag.

q Other: ______/month (minimum of $10) OR

q Please charge to my credit card (required for monthly contribution) Credit Card Information Type:

q MasterCard q VISA q Discover q American Express

Card No.: _____________________________________ Expiration Date: _____ /_________ mm

yyyy

I would like to make a one-time contribution of:

Name on Card: ________________________________

q $250 GOLD – Gold lapel pin and duffle bag

Signature: ____________________________________

q $100 SILVER – Silver lapel pin

Date: ________________________________________

q $50 BRONZE – Bronze lapel pin q $25 BASIC – Basic lapel pin q Other: _______________

q Please do not send any gifts for my contribution.

Or make check payable to NARFE-PAC. Mail to: National Active and Retired Federal Employees Association Attn: Budget & Finance 606 North Washington St. | Alexandria, VA 22314

NARFE Member #: __________________________________________ Name: ___________________________________________________ Address: ___________________________________________________________________________________________________________ City: __________________________________________________________________

State: ________

ZIP: ___________________

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

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Washington Watch

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

HEALTH CARE

BILL NUMBER / NAME / SPONSOR H.R. 2175: FEHBP Prescription Drug Oversight and Cost Savings Act / Rep. Stephen F. Lynch, D-MA Cosponsors: 2 (D)

H.R. 3351: CPI-E Act of 2015 / Rep. Mike Honda, D-CA COLA

Cosponsors: 33 (D)

WHAT BILL WOULD DO

LATEST ACTION(S)

Provides the Office of Personnel Management greater oversight authority over the prescription drug contracting and pricing methods of the Federal Employees Health Benefits Program.

Referred to the House Committee on Oversight and Government Reform

Requires Social Security and many federal retirement programs to use the Consumer Price Index for the Elderly (CPI-E) to calculate cost-ofliving adjustments in retirement benefits.

Referred to the House committees on Ways and Means, Veterans’ Affairs, Oversight and Government Reform, and Armed Services narfe, October 2015

UNION RIGHTS

H.R. 4461: Federal Employee Rights Act / Rep. Tom Price, R-GA Cosponsors: 40 (R)

Would limit the rights of federal employee unions by barring them from automatically deducting dues from workers’ paychecks, alter the way union elections are conducted and prohibit unions from using dues to conduct political activity.

Referred to the House Committee on Oversight and Government Reform

H.R. 485: Wage Grade Employee Parity Act / Rep. Matt Cartwright, D-PA

Gives the president the authority to provide Wage Grade, or hourly, employees a pay raise.

Referred to the House Committee on Oversight and Government Reform

Provides for a 3.9 percent pay raise for federal employees and a 1.4 percent increase in locality pay in 2017.

Referred to the House Committee on Oversight and Government Reform

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

Referred to the House Committee on Oversight and Government Reform

Repeals the service standards implemented by the Postal Service on 1/5/15 and directs the Postal Service to reinstate 12/31/2011 Cosponsors: 100 (D), 3 (R) service standards.

Referred to the House Committee on Oversight and Government Reform

narfe, April 2016

Cosponsors: 9 (D), 3 (R) FEDERAL COMPENSATION

H.R. 4585: The Federal Adjustment of Income Rates (FAIR) Act / Rep. Gerald E. Connolly, D-VA Cosponsors: 50 (D) H.Res. 12: Expresses the sense of the House that the Postal Service should take measures to ensure continuation of six-day delivery / Rep. Sam Graves, R-MO

POSTAL REFORM Cosponsors: 176 (D), 56 (R) H.R. 784: Protect Overnight Delivery Act / Rep. Rosa DeLauro, D-CT

NARFE’s Position: 10

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Support

Oppose

No position

EDITOR’S NOTE: Several items have been removed from the NARFE Bill Tracker. Those bills are all listed online at cqrcengage.com/narfe/home.

ISSUE

POSTAL REFORM

BILL NUMBER / NAME / SPONSOR

WHAT BILL WOULD DO

LATEST ACTION(S)

S. 1742: Rural Postal Act of Returns to service standards 2015 / Sen. Heidi Heitkamp, of July 2012, preserves six-day delivery and puts a two-year D-ND moratorium on plant closures.

Cosponsors: 7 (D)

Referred to the Senate Committee on Homeland Security and Governmental Affairs

S. 2051: The Improving Postal Operations, Service and Transparency Act (iPost) of 2015 / Sen. Thomas R. Carper, D-DE

Referred to the Senate Committee on Homeland Security and Governmental Affairs

Cosponsors: 1 (D), 3 (R)

Requires postal employees and retirees to enroll in Medicare in order to continue receiving their current federal health insurance coverage and cuts workers’ compensation benefits for injured federal employees.

H.Res. 54: Expresses the sense of the House that the Postal Service should take all measures to restore service standards in effect on July 1, 2012 / Rep. Dave McKinley, R-WI

Expresses the sense of the House that the U.S. Postal Service should restore service standards as of July 1, 2012. As a resolution, it will not be sent to the president and, therefore, cannot become law.

Referred to the House Committee on Oversight and Government Reform

narfe, March 2016

Cosponsors: 184 (D), 48 (R)

CAMPAIGN FINANCE

H.R. 20: The Government By the People Act / Rep. John Sarbanes, D-MD Cosponsors: 158 (D), 1 (R) H.R. 973: Social Security Fairness Act of 2015 / Rep. Rodney Davis, R-IL Cosponsors: 107 (D), 34 (R)

GPO/WEP

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

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

Referred to the House Committee on Ways and Means

S. 1651: Social Security Fairness Act of 2015 / Sen. Sherrod Brown, D-OH

Referred to the Senate Finance Committee

Cosponsors: 16 (D), 5 (R), 2 (I)

narfe, September 2015

H.R. 711: Equal Treatment of Public Servants Act of 2015 / Rep. Kevin Brady, R-TX

Referred to the House Committee on Ways and Means

Reforms the Windfall Elimination Provision (WEP). For individuals who turn 62 in 2017 or later, it provides a new formula that would decrease the Cosponsors: 30 (D), 48 (R) WEP penalty, on average, for those affected. For those who turn(ed) 62 before 2017, it would reduce the WEP penalty by up to 50 percent, based on savings derived from improved enforcement of WEP, as determined by the Social Security actuary.

narfe, May 2016

(Continued on p. 12) W W W. N A R F E . O R G

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11

Washington Watch

narfe bill tracker

(Continued from p. 11) ISSUE

BILL NUMBER / NAME / SPONSOR

H.R. 3029: RECOVER Act / Del. Eleanor Holmes Norton, D-DC Cosponsors: 32 (D), 1 (R) OPM SECURITY BREACH

S. 1746: RECOVER Act / Sen.

WHAT BILL WOULD DO

LATEST ACTION(S)

Expands lifetime coverage of credit monitoring and identity theft protection of no less than $5 million to all individuals affected by the security breaches at the Office of Personnel Management.

Referred to the House Committee on Oversight and Government Reform

Allows federal agencies to review and select job candidates from other federal agencies’ “best qualified list” of applicants.

Referred to the House Committee on Oversight and Government Reform

Benjamin J. Cardin, D-MD

Cosponsors: 5 (D), 1 (I) H.R. 2827: Competitive Service Act / Rep. Gerald E. Connolly, D-VA Cosponsors: 1 (D), 1 (R) FEDERAL HIRING

S. 1580: Competitive Service Act / Sen. Jon Tester, D-MT

Signed into law 3/18/16 narfe, May 2016

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

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

Cosponsors: 61 (D), 1 (R)

PENSION SCAM PROTECTION

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

S. 2033: Federal Employees Paid Parental Leave Act / Sen. Brian Schatz, D-HI

Referred to the Senate Committee on Homeland Security and Governmental Affairs

Cosponsors: 2 (D)

DC STATEHOOD

Passed the House 2/29/16 Passed the Senate 9/17/15

Cosponsors: 2 (D), 4 (R)

PAID PARENTAL LEAVE

Referred to the Senate Committee on Homeland Security and Governmental Affairs

narfe, November 2015

Sets forth procedures that H.R. 317: New Columbia Admission Act / Del. Eleanor would allow the District of Columbia to become a Holmes Norton, D-DC state known as New Columbia.

Cosponsors: 131 (D)

Referred to the House committees on Oversight and Government Reform, and Administration

H.R. 3850: Annuity Safety and Security Under Reasonable Enforcement (ASSURE) Act / Rep. Matt Cartwright, D-PA

Referred to four House committees

Cosponsors: 24 (D), 1 (R)

Requires appropriate disclosures regarding “pension advance” schemes and caps the interest rates on these advances. Also creates a private right-ofaction to allow individuals to enforce these laws in court.

NARFE’s Position:

Support

narfe, January 2016

Oppose

No position

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Questions & Answers

The following Questions & Answers were compiled by NARFE’s Federal Benefits Service Department staff.

NARFE does not provide advice or assistance on legal, financial planning or tax matters.

EMPLOYEES SURVIVOR ANNUITY AND SOCIAL SECURITY

Q

I’m a Civil Service Retirement System (CSRS) employee making plans to retire this year. If I leave an annuity for my spouse, will that affect in any way her collecting of her full Social Security benefits? Will her benefits be reduced? What are some tips/options as far as what to do with my Thrift Savings Plan (TSP) account?

A

Electing to provide your spouse a survivor annuity will have no effect on her earned Social Security benefits. If you were to predecease your spouse, the survivor benefit she would receive would not be affected by her receipt of Social Security benefits nor would her Social Security benefits be affected by her receipt of a survivor annuity.

With regard to options for your TSP account, you can: • Leave your entire account balance in the TSP and continue to benefit from tax-deferred earn-

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ings and low administrative fees; • Take a one-time partial withdrawal of part of your account and leave the balance in the TSP until a later date; • Make a full withdrawal in a single or series of payments; • Withdraw your account as a life annuity; or • Transfer (roll over) all or part of your account to an eligible IRA. For more information, see the publication “Withdrawing Your TSP Account After Leaving Federal Service” (www.tsp.gov/PDF/ formspubs/tspbk02.pdf).

You also might be interested

in the NARFE Federal Benefits Institute webinar on “Exploring TSP Withdrawal Options” with bonus one-hour Q&A session. The webinar will be webcast live on May 26. NARFE members always attend free. Register by going to www.narfe.org, logging in and clicking on the NARFE Federal Benefits Institute banner. After May 26, the webinar and accompanying slides and Q&A will be archived and available online at the same location.

SS BENEFIT REDUCTION FOR CSRS OFFSET

Q

I’ll be age 66 soon and am still working. I am under the Civil Service Retirement System (CSRS) Offset provisions because I left federal service and came back after the Federal Employees Retirement System was enacted. I’d like to retire at age 70, at which time I will

apply for Social Security benefits.

Will my annuity be affected by my receipt of Social Security?

A

Under the CSRS Offset provisions, at age 62 or at retirement, whichever comes later, your CSRS annuity will be calculated as a regular annuity but then it will be reduced to subtract the lesser of: 1. The portion of the Social Security benefit that is attributable to the CSRS Offset service time, or 2. A figure equaling: (Total CSRS Offset years divided by 40) X the total SS benefit.

RETIREES NO LEGAL REQUIREMENT FOR SURVIVOR ANNUITY

Q

I retired from federal service under the Civil Service Retirement System (CSRS). I did not elect to have a survivor annuity for my husband, a federal employee also under CSRS. He intends to continue to work until he reaches age 70 in about six years. When we had our taxes done recently, we were told that it was the law to have a beneficiary for my annuity. It is my understanding that without having elected a survivor annuity, my annuity stops when I become deceased and my death is reported to the Office of Personnel Management. Is this correct?

A

Federal retirement law does not require you to elect a survivor benefit for a spouse or for someone with

an insurable interest. However, the spouse must consent to any decision not to provide a survivor benefit. If you did not elect a survivor benefit, upon your death, unless you have eligible children, all regular monthly annuity payments based on your retirement would stop.

EARNING OVER THE EARNINGS LIMITATION

Q

I retired in 2009 under the Federal Employees Retirement System (FERS) at age 50 with 22 years of service as a Federal Law Enforcement Officer (LEO) and started receiving the FERS Special Retirement Supplement. I was able to find employment in the private sector that provides an income far in excess of the annual earnings limit for the supplement.

I know that LEOs are not subject to the earnings limitation until they reach their FERS minimum retirement age, which in my case was age 56. My 56th birthday has come and gone, and I am still being paid the Special Retirement Supplement. I have been putting the excess payment aside, but would like my retirement pay to be adjusted to the correct amount.

I have called the Office of Personnel Management (OPM), and no one knew how or when the FERS Special Retirement Supplement would be suspended. Do you have insight into this matter?

A

OPM sends a survey form every year to FERS retirees under age 62 who are

receiving the FERS Supplement.

The survey asks the retirees to report their earnings (other than their annuity) for the prior tax year. If you received one already this year, you should complete it and mail it back to OPM. If your earnings for the prior year were above the earnings limitation, OPM will reduce or eliminate the FERS Supplement.

By law, the reduction in the FERS Supplement is effective July 1 of the year following the tax year in which earnings exceeded the limits.

EFFECT OF REMARRIAGE ON SPOUSAL SS BENEFITS

Q

I am a Civil Service Retirement System (CSRS) retiree and am dating a divorcee who is receiving Social Security benefits from the account of her divorced husband, who is still living. If I marry her, will she lose those Social Security benefits?

Needless to say, as a CSRS retiree I receive minimal Social Security benefits in my own right because of the Windfall Elimination Provision.

A

If you marry your friend, she will not be able to continue to receive spousal benefits from her divorced husband. Social Security says: “If you remarry, you generally cannot collect benefits on your former spouse’s record unless your later marriage ends (whether by death, divorce or annulment).”

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

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15

Questions & Answers

HOUSE BILL WOULD REFORM WEP

Q

I retired in 1994 under the Civil Service Retirement System (CSRS), and my Social Security benefits are reduced by the Windfall Elimination Provision (WEP). Has anything changed?

A

Nothing has changed, but there is hope that a current bill in the U.S. House of Representatives eventually will be enacted. The bill, H.R. 711, has bipartisan support. If it becomes law, those currently affected by the WEP would receive a rebate, estimated to be 50 percent of the current penalty. For those who

16

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turn age 62 in or after 2017, a new, more equitable WEP formula would be applied. NARFE is throwing its full support behind the legislation.

TAXATION OF ANNUITY NOT DOUBLE TAXES

Q

Why do retired federal employees pay federal tax on their retirement?

The dollars were taxed when you earned them, and they are taxed again when you draw the retirement.

A

Actually, it was the retirement contributions you made while working that

were taxed. Under Internal Revenue Service (IRS) regulations, a small actuarial amount of your total retirement contributions makes up a part of your monthly annuity and is not subject to federal taxes again. For most annuitants, the Office of Personnel Management specifies the amount of gross annuity that is taxable on the form 1099-R it provides every year.

FILE-AND-SUSPEND STRATEGY UPDATE

Q

I am age 66 and filed for, then suspended, my Social Security benefits last year. I am waiting until I turn

4/15/14 1:26 PM

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Questions & Answers

70 to claim the benefits so that I can maximize them. My wife is 62. Can she get spousal benefits under Social Security now and wait until she is older to claim her own benefits? I read that we must do this by May 2016. Elsewhere, I heard that we cannot do this if my wife did not turn 62 before 2016.

Can you clarify?

A

In late 2015, Congress passed legislation that prevents spousal benefits from being paid on a suspended Social Security benefit. The new rules took effect April 30, 2016.

They apply to spouses turning 62 in 2016 or later. However, if your wife turned age 62 before 2016,

and because you filed for and suspended your benefits before April 30, 2016, she still would be able to apply for spousal benefits based on your Social Security record.

This development was covered in the “Managing Money” column in the January 2016 issue of narfe magazine, p. 36. In addition, the NARFE Federal Benefits Institute recently conducted a one-hour webinar on claiming Social Security benefits that you might find informative. Institute webinars are archived at www.narfe.org.

Log in and click on “Webinars” under the Resource Library on the left side of the member home page.

GPO WILL REDUCE SURVIVOR SS BENEFITS

Q

I am a Civil Service Retirement System (CSRS) annuitant and not eligible for Social Security benefits.

My wife also is retired, but she receives Social Security retirement benefits. Should my wife predecease me, would offsets from the Windfall Elimination Provision (WEP) or Government Pension Offset (GPO) apply to any Social Security survivor benefits I might be entitled to?

A

Yes. Under the GPO provisions, you may apply for survivor benefits based upon your wife’s Social Secu-

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Questions & Answers

NARFE at Your Service rity record, but the amount that would be payable to you would be reduced $2 for every $3 of your CSRS annuity.

GOING BACK TO FEHBP AFTER SUSPENSION

Q

Several years ago, I suspended my Self and Family plan under the Federal Employees Health Benefits Program (FEHBP) when my wife and I went into Medicare Advantage plans. If I predecease my wife and she wants to re-enroll (Self Only) in an FEHBP plan, must she do so at the next Open Season or can she wait until a later Open Season, when she deems

it cost-effective to carry both FEHBP and traditional Medicare?

A

As long as you were enrolled in either a Self and Family or Self Plus One coverage at the time you suspended your FEHBP enrollment and your spouse was a dependent under that enrollment, she could re-enroll in the FEHBP at any future Open Season.

To obtain an answer to a federal benefits question, NARFE members should call 703-838-7760 and ask for the Federal Benefits Service Department; send the question by postal mail to NARFE Headquarters, ATTN: Federal Benefits; or submit it by email to fedbenefits@narfe.org.

NARFE service officers are available to answer questions and to assist in helping with a variety of benefit matters. Check your chapter newsletter for the name and phone number of your service officer. For the nearest service officer, call NARFE (toll-free) at:

800-456-8410.

NARFE Service Centers also are available in some areas. Use the Service Center listings on the NARFE website,

www. narfe.org.

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Cover Story

Protecting Identities, Data

AFTER THE NEARLY A YEAR AFTER THE REVELATION BY THE U.S. OFFICE OF PERSONNEL MANAGEMENT (OPM) OF TWO monumental data breaches, the repercussions of the disclosure of the sensitive personal information of more than 22 million federal employees, retirees, contractors and federal job applicants continue to unfold: • Congress has extended identity theft protection to those affected from 18 months and three years, depending on the breach, to 10 years; but sign-up thus far has been limited.

• Individuals affected by the breaches have made nearly 7,000 requests for identity theft restoration to OPM’s identity and credit protection contractors, although it is not clear that the cases were related to the breaches.

By David Tobenkin

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By David Tobenkin

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

Illustration by Bill Pragluski, Critical Stages, LLC

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23

AFTER THE

• Courts soon may rule on two union lawsuits, determining whether those affected can expect to receive any money from the federal government and an IT contractor to compensate for the harm they suffered.

• The FBI’s investigation into who was behind the breaches remains open, despite a claim by the Chinese government that it apprehended the criminals involved.

• Under new management prompted by the data breaches, OPM reports progress in addressing longstanding weaknesses in the agency’s cybersecurity processes and procedures.

PROVIDING PROTECTION

OPM announced two separate breaches in 2015: One, disclosed June 4, involved 4.2 million individuals whose personnel file information was disclosed. Another, disclosed July 9, involved 21.5 million individuals whose security clearance and background check records were compromised. Together, the two breaches affected 22.1 million individuals, due to the overlap between the groups.

OPM offered those affected by the incidents similar forms of credit and identity theft protection – from contractor CSID, in the case of the personnel files breach, and contractor ID Experts, in the case of the background investigations breach. Protection under both forms includes identity monitoring, credit monitoring, identity restoration service, and identity theft insurance.

NARFE and other federal employee advocates lobbied strongly to have OPM offer lifetime credit monitoring and identity theft protection to those affected by the breaches, noting potential exposure to harm will continue long into the future.

In December 2015, President Obama signed into law the Consolidated Appropriations Act for FY 2016 (Public Law 114-113), which, in section 632, directs OPM to provide “complimentary identity protection coverage” at least as comprehensive as the coverage previously offered to the individuals affected by either hack for a period of not less than 10 years and to provide $5 million in identity theft insurance for each victim. OPM is currently working on how best to incorporate 24

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the additional coverage provided by the legislation, says an OPM spokesperson.

“NARFE’s priority remains lifetime coverage for those affected by the breaches,” says Jessica Klement, NARFE legislative director. “However, with Congress extending coverage to 10 years, it’s likely that it considers its job done in this regard.”

NARFE is watching to see how the 10-year extension works, including seeing that the contract is awarded competitively and that all affected individuals are covered. “If threats still linger when we approach the 10-year mark, NARFE undoubtedly will work to extend coverage,” Klement adds.

Usage of the CSID and ID Experts services to date appears to be limited. OPM reports that, as of March 2016, of the 4.2 million employees affected by the personnel records breach, only 1,078,717 had taken advantage of the offered services. And of 21.5 million affected by the background investigation breach, OPM reports that only 2,610,740 have taken advantage of the services.

Of the NARFE members responding to a narfe magazine survey, some reported difficulties using the services or lack of responsiveness by the contractors. Others question why they are receiving seemingly unrelated information, such as updates regarding registered sex offenders in their area.

And others appear satisfied with their service.

Many called for protection to be extended to family members whose sensitive data also was included in the records that were breached and who are, therefore, subject to potential fraud. An OPM spokesperson explained that protection is being provided to individuals whose Social Security numbers were compromised, which includes current and former employees and individuals whose Social Security numbers were somehow collected from other individuals, such as during background checks.

There are other areas in which NARFE is pushing for further action. “NARFE still has a major concern with the requirement that in order to sign up for the identity theft protection, individuals are required to have an email address,” says David Snell, director of NARFE’s Federal Benefits Service Department. “NARFE feels this requirement excludes those with certain disabilities from being able to take advantage of the monitoring offers, and we have sent a letter to OPM Acting Director Beth Cobert stating our

concerns and asking for OPM to provide an alternative to the blind/disabled.” An OPM spokesperson said that the agency is working with its service providers to provide a mailed option for alerts and reports.

THOUSANDS REPORT HARM

As of March 2016, 1,221 individuals affected by the personnel records breach had opened identity theft restoration cases, claiming that they had been victims of identity theft, says OPM spokesperson Sam Schumach. Another 5,503 identity restoration cases were opened by those affected by the background investigations incident.

There have been two identity theft insurance claims filed in connection with the personnel records incident, though neither of the claims has been paid out because the discovery of fraud was before the effective date of the policy, says Schumach, adding that no insurance claims have been filed with respect to the background investigations incident.

There “is no indication from law enforcement officials that suggests misuse of the information that was taken from OPM’s systems,” says Schumach. He notes that requests for identity restoration services may reflect incidents unrelated to the OPM data breaches. “Individuals are eligible to receive identity theft restoration services regardless of whether the identity theft is related to or traceable to the OPM breach,” he explains.

A total of 56 NARFE members responding to the narfe magazine survey said they had experienced identity theft or credit fraud since the OPM data breaches occurred, though many noted they had been affected by other data breaches in addition to those of OPM, leading some to say it was unclear which breach or breaches caused the harm.

A March 2016 amended class action complaint (amended complaint) against OPM and an IT security contractor, KeyPoint Government Solutions, Inc., listed among the plaintiffs 21 individuals reporting credit or identity related incidents against them that they believed were linked to the OPM data breaches. Among the incidents reported by those affected by the breaches were fraudu-

The full extent of the harm will not be known for years, given that the data will be useful to criminals and foreign espionage agents for a long period. lent tax returns, unauthorized charges using credit information, notifications from the Social Security Administration of third-party attempts to use Social Security numbers, notification of findings of data on World Wide Web locations used by criminals, difficulties confirming identity due to fraudulent rival claims, fraudulent credit card accounts opened in their name, and fraudulent accessing of utility accounts.

On the other hand, some employee advocates say that they have not received numerous reports of harm. “We’re not hearing from a lot of members about identity theft or credit fraud – maybe from five members total,” says William R. Dougan, national president of the 110,000-member National Federation of Federal Employees.

Dougan and many experts said, however, that the full extent of the harm will not be known for years to come, given that the disclosed information will continue to be useful to criminals and foreign espionage agents for a long period.

“That [background investigations] data breach is the worst ever – I can’t imagine anything worse,” says Mark Weatherford, senior vice president and chief cybersecurity strategist at Mountain View, CA-based data center security company vArmour and previously deputy undersecretary

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for cybersecurity at the U.S. Department of Homeland Security (DHS).

“It’s the worst because of the nature of the data compromised. The Questionnaire for National Security Positions [SF-86] questions are designed to make sure that if people have any skeletons in their closets, they will be reported there.”

VICTIMS' DAY IN COURT

In June 25, 2015, the American Federation of Government Employees (AFGE) union and other plaintiffs filed a complaint against OPM and KeyPoint Government Solutions, Inc., a contractor that conducts background investigations for the government and from which the data breachers stole a credential to open OPM systems. That class action lawsuit, which was consolidated with others, alleges in the amended complaint that OPM failed to comply with the Federal Information Security Modernization Act of 2002 and 2014 (FISMA), violated the Privacy Act of 1974, and that it and KeyPoint engaged in other actionable misconduct.

The amended complaint seeks monetary damages for class members; indemnification of members from economic injury from the data breaches; lifetime identity theft and fraud protection to class members; and for OPM to formulate, adopt and implement a data security plan that satisfies the requirements of the Privacy Act and FISMA, by, among other things, mandating that all unauthorized information systems be shut down and validly authorized before being reactivated. In March 2016, the complaint was amended to add new examples of harm. Another separate lawsuit that has been filed by the National Treasury Employees Union (NTEU) seeks remedies for NTEU members allegedly affected by the OPM data breaches.

In May, the government was expected to file motions to dismiss the amended complaint and the NTEU complaint, the first time in which the government will argue its side of the lawsuits.

All in all, class members affected by the data breach have a fairly strong case for recovery, given years of reports by OPM’s inspector general (IG) describing material weaknesses in OPM’s cybersecurity programs and processes and the IG’s documentation of a failure by OPM management to act upon such reports, says John Mahoney, a Wash26

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ington, DC-based federal government employment lawyer and former federal administrative judge who has represented federal employees in Privacy Act cases.

“This is an unprecedented case that seems supported by FISMA and the Privacy Act,” Mahoney says. “The only issue is if OPM can contend that the data breaches were caused by an intervening criminal act, not by OPM. If the plaintiffs can get around that by arguing that OPM showed reckless disregard – and I think the government’s inaction in the face of years of reports by the OPM inspector general showing material weaknesses in their cybersecurity practices and noncompliance with federal cybersecurity law may rise to that level – they likely can get past the government’s defense.”

Chris K. Hikida, an associate for San Francisco-based law firm Girard Gibbs LLP, which is bringing the amended complaint, says that other individuals who were affected by the breach who are not named in the lawsuit will have a window to participate in the lawsuit if it is not dismissed. An OPM spokesperson said the agency could not comment on matters involving an active lawsuit.

APPREHENDING THOSE RESPONSIBLE

When asked about the status of the investigation into the breaches, OPM and DHS spokespersons referred questions on the investigation to the FBI. The FBI confirmed in a statement that the investigation is outstanding but said little more.

In December 2015, The Washington Post reported that the Chinese government had announced that it had apprehended those responsible for the breaches and said that they represented criminals rather than state intelligence operatives. However, U.S. government officials declined at the time to publicly evaluate the Chinese assessment.

A NEW CYBERSECURITY REGIME

OPM has taken a number of steps following the data breaches to create a new cybersecurity regime for federal records. In June 2015, OPM released a Cybersecurity Action Report, announcing steps to improve IT security. Among these were increasing use of two-factor authentication (requiring two types of identification) for network access, reducing privileged users on the agency’s networks, and

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tripling investment in IT modernization efforts.

However, in November 2015, OPM’s inspector general released an audit that found numerous cybersecurity shortcomings at the agency remained.

In January 2016, the Obama administration and OPM announced changes to address the safeguarding of the most sensitive data, that pertaining to background checks. OPM is creating a new governmentwide service provider for background investigations, the National Background Investigations Bureau (NBIB), which will be housed within OPM. The Department of Defense (DOD), with its unique national security perspective, will design, build, secure and operate the NBIB’s investigative IT systems in coordination with the NBIB. “Given how sensitive the data is and the impressive abilities of DOD in that area, I think leveraging that expertise makes sense,” says Richard Spires, former DHS chief information officer and now chief executive officer of Herndon, VA-based IT and management training provider Learning Tree International, Inc. In February 4, 2016, testimony before the Senate considering her confirmation as the new OPM director, Acting Director Cobert said OPM hopes to “have NBIB’s initial operating capability officially established with a new organizational design and leader by October 2016.”

Cobert also reported that OPM had made “significant progress” on improving the agency’s cybersecurity, pointing to the requirement for two-factor authentication for network access, a strengthening of perimeter protections with firewalls, and installation of tools to better inspect incoming and outgoing traffic and create more visibility on the network. “I have also hired a Senior Advisor for Cybersecurity, to bring private-sector experience on how best to strengthen OPM’s IT systems, modernize our IT infrastructure, and enhance the security of valuable federal IT systems and information,” she said.

“At the same time, we have reorganized our Office of the Chief Information Officer, brought in a new Acting Chief Information Security Officer, and hired four new SES-level employees and four new senior IT program managers to further strengthen our senior IT team. On the process front, we are 28

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putting into practice a new incident response plan, and OPM periodically requests independent penetration testing from our interagency partners.”

OPM’s fiscal year 2017 budget request includes $37 million to enable it to continue efforts to migrate its existing legacy network to a new IT infrastructure (the “Shell”), which OPM contends will be more modern and more secure.

Some members of Congress, IT experts such as Spires, and the November 2015 IG audit report have expressed concerns that pursuing that ambitious program could be unwise, given past difficulties OPM has had implementing IT modernization programs, such as digitizing retirement claims processing, and the danger such efforts could divert energy from expeditious efforts to remedy the most pressing current IT security shortcomings.

However, in his February 2016 resignation notice to President Obama, OPM Inspector General Patrick McFarland, long critical of the agency’s cybersecurity efforts, praised Cobert’s efforts to date to improve cybersecurity.

Still, Spires says that the challenges pointed out in the OPM IG reports are so profound and extensive that it will take years for them to be worked out.

“Some of the issues highlighted in the November [2015] IG report are a decade in the making,” says Spires. “When you have an organization with 23 major systems without authorizations, this shows an organization that was not focused on IT security in a way that it ideally should have been.

On the other hand, under Beth Cobert, OPM seems to be addressing their shortcomings seriously and are getting their arms around the challenge. But to think you are going to fix it quickly is simply not realistic. You need a five-year plan to address challenges of this magnitude. My sense is that they are taking significant steps that you are not seeing the fruits of yet.”

External assessments of how much progress has been made will come soon. Later this year, the Government Accountability Office (GAO) will release a comprehensive examination of OPM’s efforts to reduce the risk of future data breaches that was directed by Congress, says Greg Wilshusen, director of information security issues at GAO. —DAVID TOBENKIN IS A FREELANCE WRITER BASED IN THE GREATER WASHINGTON, DC, AREA.

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FOR MANY FEDERAL EMPLOYEES, THE PROSPECT OF RECEIVING THE GREATEST AMOUNT OF BENEFIT POSSIBLE UNDER the Civil Service Retirement System (CSRS), the Federal Employees Retirement System (FERS), or the hybrid CSRS Offset system, keeps them from leaving government service until their annuities are fully funded and they can begin to receive that retirement benefit as soon as they retire.

Others, however, find it difficult to wait until they are eligible for an immediate annuity to separate from service. Some have family reasons for leaving, such as the relocation of a spouse or the need to become a full-time caregiver. Others are tempted by buyout offers or are required to leave because of agency reductions in force. Still others receive once-in-alifetime offers from private industry or seize an opportunity to become their own boss.

Fortunately for these men and women, the government offers many of them an opportunity to keep the retirement benefit they have earned during their service. It’s called a deferred annuity. The option is available to employees who have completed enough creditable civilian service to have their pension rights vested, but are not yet old

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By Everett A. Chasen

Many federal employees considering separating from government service can decide when they can begin receiving their annuities. Here are the options. enough to retire and immediately begin drawing that annuity.

The government also offers a postponed annuity for federal employees who are eligible to retire but face a reduction in their annuity because they have not yet met the age requirements for a full pension.

In fiscal year (FY) 2015, the Office of Personnel Management (OPM) processed 3,842 deferred or postponed annuity requests. While the number of such requests is shrinking (OPM processed 4,230 such requests in FY14, and 4,259 in FY13), many employees still have questions about these two types of annuities, according to James Marshall, a federal retirement counselor. “I talk to folks about deferred annuities every week,� says Marshall, whose company, Federal Retirement Planning LLC (www.federalretirementinfo.com), offers information on retirement issues.

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sliding scale, depending on the year in which For employees covered by CSRS and CSRS Offthe employee was born. Employees born before set, eligibility rules for deferred retirement are 1948 with 10 years of service can retire at age relatively simple. They must have completed at 55; those born between 1953 and 1964 can least five years of creditable civilian service to be retire at 56; those born in 1970 and after can eligible for deferred retirement. retire at 57. (For the full chart, see www.opm.

As long as they have not taken a refund of gov/retirement-services/fers-information/ their CSRS contributions upon separation from eligibility/.) federal service, former CSRS employees will However, retiring at their MRA but before age have deferred retirement waiting for them when 62 subjects those covered by FERS to a penalty. they reach age 62.

For every month in which they are younger than If CSRS employees are eligible for an imme62, their annuity is reduced by 5/12 of 1 percent, diate annuity within one month of their separawhich equals 5 percent per year. tion from service, they don’t have to worry about This reduction does not take place, however, deferred retirement. CSRS employees are not if the employee has completed at least 30 years eligible for postponed annuities. of service, or if he or she has completed at least Because no new federal employees were 20 years of service and does not begin to collect enrolled in CSRS after 1983, most CSRS employ- an annuity until age 60. ees still working today are now eligible for FERS employees who are eligible to retire immediate retirement. They become eligible at at the time they separate from federal service 55 years of age with 30 years of service, or 60 no longer need to be concerned about deferred years of age with 20 years of service, or 62 years annuities. Instead, they can receive a postponed of age with five years of service. annuity, waiting to collect their annuity until Eligibility for deferred annuities under they are older, up to age 62 if necessary, to FERS is more complicated. Unlike their CSRS lessen or eliminate the age reduction penalty, if counterparts, those in the FERS retirement applicable. system are eligible to receive postponed annuiThere’s a major difference between employties as well. ees choosing deferred or postponed annuities.

Former FERS employees are eligible to Those who elect to receive a deferred annuity receive deferred retirement annuities: if they cannot continue to carry either their Federal are not eligible for immediate annuities within Employees Health Benefits Program (FEHBP) one month of their separation; if they meet the health insurance or Federal Employees’ Group minimum service requirement for their annuity Life Insurance (FEGLI) into their retirement. to be vested, which is currently five years; and On the other hand, those who are eligible to if they do not take a refund of their retirement receive postponed annuities are also eligible to deductions after separating from service.

OPM provides information about eligibility requirements These former employees for postponed and deferred annuities for FERS employees then can begin collecting at www.opm.gov/retirement-services/fers-information/ their annuities if they are types-of-retirement, and for those covered by CSRS at age 62 and have had at www.opm.gov/retirement-services/csrs-information/ least five years of creditable types-of-retirement. federal service, or if they reach their FERS minimum OPM recommends that applicants submit their deferred or retirement age (MRA) havpostponed annuity applications 60 days before the date ing had at least 10 years of they would like to begin receiving the annuity. Form RI 92-19 creditable service. for FERS employees can be found online at www.opm.gov/ The FERS minimum forms/pdf_fill/ri92-19.pdf. retirement age varies on a 32

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re-enroll in both FEHBP and FEGLI when they begin to draw their annuity.

BEFORE DEFERRING

There are several things to consider before making a decision on whether to take a deferred or postponed annuity on leaving federal service.

One is whether it makes financial sense.

“Generally, someone will receive more money taking a deferred annuity, as opposed to getting a refund of his or her retirement contributions,” says Kenneth J. Zawodny, Jr., OPM’s associate director of retirement services, although Zawodny cautions that someone who takes a refund and invests it might do better.

Those taking deferred retirements cannot regain health or life insurance.

Marshall, who has counseled many employees on this subject, takes a more nuanced view.

“Always be aware of what your options are,” he advises. “It’s not always about money.”

In his experience, most people who take a deferred retirement are in the middle of their work careers. “There are four things a deferred retiree will never get – and one of these is very important to most feds.” He enumerates: Those taking deferred retirement and their spouses will not be able to regain federal health benefits when they or their spouses finally retire.

They also will be unable to retain, or get back, federal life insurance.

Deferred retirees do not get credit in their pensions for unused sick leave, as other federal retirees do.

Finally, there is no FERS annuity supplement payable to a deferred retiree.

(The FERS supplement, not available to CSRS or CSRS Offset retirees, is a bridge pay34

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ment for some FERS employees who retire before age 62. It is designed to make up for the inability of FERS retirees younger than 62 to access their Social Security fund payments until they reach that age and is payable only until the retiree becomes eligible for Social Security.)

Marshall said that, of these four items, health insurance is by far the most important. He notes that many former federal employees can get equal or better life insurance terms somewhere else; that many of the federal employees he counsels don’t have much sick leave, especially those close to retirement age; and that the supplement is temporary.

Health insurance, however, is different.

“People would be hard pressed in private employment to find better coverage than they get in FEHB,” he says.

Marshall has suggested a “work-around” to clients who are concerned about this issue.

“What I tell them is to plan your federal career path to come back later,” he says. “It doesn’t have to be a high-paying job, and your highthree salary won’t be any less than what it was when you previously left the federal government, even if you’re returning to a low-paying job.

“Once the government hires you,” he continues, “they can’t stop you from retiring. As long as you were under FEHBP for the last five years of your federal career, OPM doesn’t care about calendar years, they only look at your federal years. There’s no guarantee that the federal government will rehire you, but you can always try to come back later.”

CSRS or CSRS Offset employees who previously left federal service mid-career would have to work at least one year under CSRS or CSRS Offset before qualifying for immediate retirement, unless they elect FERS coverage upon rehire, in which case they could retire within days of rehire. FERS employees don’t have to meet this one-year rule to qualify for an immediate retirement.

And Marshall offers a major caution to those under CSRS Offset: “If you elect FERS when you’re rehired, any previous CSRS Offset or CSRS Interim service would now be treated as FERS service for retirement purposes.”

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PUTTING YOUR ANNUITY O N

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the event of a terminal illness, that this is the For those people eligible to take postponed ancase)?” Then he asks the “big” question many nuities, instead of deferred, “it’s not a health of those considering postponed retirement insurance issue, it’s a money issue,” explains must consider: How does my decision affect my Marshall. spouse if my spouse becomes widowed?

Those considering postponed annuities meet “If you’re aware of what your options are, the minimum requirements for retirement. you’re going to be the best person to make a They’ve reached their MRA with at least 10 decision,” he says. “I don’t offer any personal years of service, but don’t yet have 30 years in recommendations.” and haven’t yet reached their 62nd birthday. Or they’ve reached age 60 or 61 with more than 10 OTHER THINGS TO KNOW years of service, but less than 20.

Zawodny says federal employees considering the These people can resign from federal service option of either deferred or postponed annuities and wait until they are either 60 or 62 (dependshould be aware of the consequences of taking a ing on the number of years of service they have refund of their retirement contributions. Unhad) to collect their full pension, or they can less they return to government service at some retire immediately and accept a permanent other point in their career and make a redeposit reduction in their annuity. of these funds, they are out of luck. “Taking a “The only reason why anyone would ever refund of (retirement) contributions would make select postponed retirement is because you are (an) employee ineligible for a deferred annuity if getting a reduced pension on account of your he or she was never rehired as a federal employee age,” Marshall says. “There’s no reason to postor covered under a federal retirement system,” he pone any other type of retirement.” explains.

There is, however, one exception: employees Zawodny also advises that the time to begin who plan to return to federal service and don’t thinking about these issues is early in a federal want to accept the reduced level of pay retired employee’s career. “OPM recommends that annuitants receive might also consider a postemployees make informed decisions about poned annuity. their benefits throughout their lives,” he says.

Taking a postponed annuity in that situation “In order for employees to do this, they must allows employees to return to the government periodically meet with their Human Resources at any time and collect a full salary for the work office and use the benefits tools provided by their agency.” they are doing. Once they begin to receive an Marshall suggests that the current system is annuity, however, they can only return as a re“fair the way it’s set up. It’s definitely a lot better employed annuitant. than private people get.” David Snell, NARFE’s Marshall reminds those considering postfederal benefits service director, agrees, but poned annuities they have another option. adds, “what would really improve the current Working a few extra years, until they are eligible law would be to allow those former employees for full retirement, may make a very big differwho left government service the opportunity to ence in the annuity they receive. re-enroll in the FEHBP when they apply for a He recently talked with a federal employee deferred retirement.” who expected to retire as a GS-15. In this “Everyone needs to see what their options employee’s case, retiring at 62 instead of retirare,” Marshall concludes. “I expect federal ing a little bit sooner made a difference of $500 agencies to tell people about them, but somea month for the rest of the employee’s life. times they don’t. That’s why people like me To help them frame their decision, he asks exist.” clients: “Are you married? Does your spouse —EVERETT A. (EV) CHASEN IS A WRITER AND COMMUNICATIONS want a survivor benefit from your FERS penCONSULTANT IN THE WASHINGTON, DC, AREA. HE RETIRED FROM sion? Is it possible that your spouse might THE FEDERAL GOVERNMENT AFTER 35 YEARS OF SERVICE. outlive you (and it’s always possible, even in 36

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We’ve all had nights when we just can’t lie down in bed and sleep, whether it’s from heartburn, cardiac problems, hip or back aches – it could be a variety of reasons. Those are the nights we’d give anything for a comfortable chair to sleep in, one that reclines to exactly the right degree, raises feet and legs to precisely the desired level, supports the head and shoulders properly, operates easily even in the dead of night, and sends a hopeful sleeper right off to dreamland.

minimum of internal and external stresses. You’ll love the other benefits, too: It helps with correct spinal alignment, promotes back pressure relief, and encourages better posture to prevent back and muscle pain.

Save * thousands on hearing aids through TruHearing

速

Get this exclusive offer now! Call (877) 360-2432 or go to blue365deals.com/truhearing/FEP.

TruHearing is an independent company providing discounts on hearing aids. * Savings calculated based on a nationwide survey of hearing aid prices from independent audiology clinics compared to TruHearing pricing (2014).

TruHearing savings on hearing aids made available to Service Benefit Plan Members through Blue365. Price shown does not include cost of comprehensive hearing exam. Examination and testing for prescribing of hearing aids is covered under the Blue Cross and Blue Shield Service Benefit Plan. The Insured may need to submit for reimbursement. Must be a Service Benefit Plan member to access TruHearing pricing. State and local taxes and/or fees may apply.

Prices and products subject to change.

The Blue Cross and Blue Shield Service Benefit Plan will pay a hearing aid benefit up to $2,500 total every 3 calendar years for adults age 22 and over, and up to $2,500 total per calendar year for members up to age 22. Do not rely on this communication piece alone for complete benefit information. All benefits are subject to the definitions, limitations, and exclusions in your Service Benefit Plan brochure. The Blue365速 Discount Program offers access to savings on items that you may purchase directly from independent vendors, which may be different from items covered under your Service Benefit Plan or

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YOU PAY

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$3,100

$2,500

$600

OTICON

Nera

$5,250

$2,700

$2,500

$200

WIDEX

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$5,160

$3,190

$2,500

$690

STARKEY

Z Series i90

$4,560

$2,850

$2,500

$350

RESOUND

Verso 7 W

$4,820

$2,500

$2,500

$0

Over 100 Hearing Aids to Choose From Most Popular Styles

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Behind-the-ear More power and features

Prices and products subject to change.

TruHearing is off ered through Blue365® which provides exclusive health and wellness deals and is a program of Blue Cross Blue Shield Association, an association of independent Blue Cross and Blue Shield companies.

All appointments must be scheduled through TruHearing. any other applicable federal healthcare program.

For hearing aids, acupuncture, chiropractic and vision services, you must exhaust your Service Benefit Plan benefits first. To find out what is covered under your policy, contact the Service Benefit Plan. The products and services described herein are neither offered nor guaranteed under any local Blue company’s contract with the Medicare program. In addition, these items are not subject to the Medicare appeal process. Any disputes regarding these products and services are not subject to the Service Benefit Plan’s Disputed Claims process. Blue Cross Blue Shield Association (BCBSA) may receive payments from Blue365 vendors. Neither the Service Benefit Plan, BCBSA, nor any local Blue company recommends, endorses, warrants or guarantees any specific Blue365 vendor or item. The Service Benefit Plan reserves the right to change, modify, or terminate any item and vendors made available through Blue365, at any time.

Blue Cross Blue Shield Association is an association of independent, locally operated Blue Cross and Blue Shield Companies.

Managing Money

TAXES ON INVESTMENT EARNINGS: PART ONE

T

axes are a fact of life. We pay taxes on our wages and pensions. We pay taxes on the things we buy.

We also pay taxes on the money our money makes.

While we can’t escape taxes completely, you’ll be better equipped to keep more of your investment earnings if you understand how the various types of investments are taxed. After all, as the old adage goes, “It’s not what you make, it’s what you keep that counts.”

All investments, and in particular the earnings the investments generate, aren’t created equal. To understand the impact taxes will have on your investments, you first need to understand what type of income the investments generate.

In this article, we’ll focus on interest, dividends and capital gains, all of which have their own set of tax rules.

Interest is earned on a number of investments, including savings accounts, certificates of deposit (CDs) and money market accounts. Interest typically is taxed at your marginal tax rate, which can be as high as 39.6 percent.

Bonds, which come in too many varieties to cover all of them in this article, also pay interest and are generally issued by the U.S. Treasury, local municipalities and corporations.

Municipal bonds are generally exempt from federal income taxes, and if you own a municipal bond that was issued in the

40

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state in which you live, the interest will be exempt from state income taxes as well. Bonds issued by the U.S. Treasury are taxable at the federal level, but exempt from state taxes.

Stockholders may receive dividends, which come in two flavors – qualified and nonqualified. Nonqualified dividends are taxed at the taxpayer’s marginal tax rate, but qualified dividends receive preferential treatment with a maximum rate of 20 percent. But that only applies to tax filers who are in the 39.6 percent marginal tax bracket. For those in the 25, 28, 33 and 35 percent tax brackets, the qualified dividend tax rate is only 15 percent, and for those in the 10 percent and 15 percent marginal tax brackets, the qualified dividend tax rate is zero!

Capital gains are generated when you sell an investment for more than its adjusted cost. For example, if you bought Apple stock for $75 per share and

BY MARK A. KEEN,

CFP®

later sold it for $100 per share, capital gains tax would apply to the $25 per share gain. The rate you owe is dependent upon two factors – the length of time you held your investment and your marginal tax rate.

If you held the investment for less than one year, the capital gains are considered short-term, and if you held the investment for longer than one year, the capital gains are considered long-term. The tax rate for short-term gains is equal to your marginal tax rate. Like qualified dividends, long-term gains are treated more favorably and are dependent on your marginal rate. Tax filers in the 39.6 percent marginal bracket pay 20 percent; those in the 25, 28, 33 and 35 percent tax brackets pay 15 percent; and those in the 10 and 15 percent brackets pay no capital gains tax.

Many investors invest in mutual funds, which is an investment vehicle that pools investors’ funds together for the purpose of investing in a collection of stocks, bonds and other assets. To the extent the investments held by a mutual fund pay interest and dividends, the mutual fund will distribute that income as dividends to the mutual fund’s shareholders.

Depending on the composition of the income, the dividends distributed to mutual

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

fund shareholders may be qualified and nonqualified.

In addition, realized capital gains from trading activity within the mutual fund will be distributed to mutual fund shareholders as well. The mutual fund’s holding period will dictate whether the capital gains distributions will be short-term or long-term. In some years, these capital gains distributions can be quite high, and many investors

are unpleasantly surprised to find out they have to pay capital gains tax even if they never sold their shares of the mutual fund.

To further complicate the issue of how investment earnings are taxed, there are tax-deferred retirement accounts, such as traditional individual retirement accounts (IRAs) and the Thrift Savings Plan (TSP), that have their own set of tax rules regardless of the type of investments held in the account.

In next month’s Managing Money column, we will cover these tax rules along with some strategies that may help you keep more of the money your money makes.

MARK A. KEEN, CFP®, IS PARTNER, KEEN & POCOCK, 10300 EATON PLACE, FAIRFAX, VA, AND AN INVESTMENT ADVISER REPRESENTATIVE AND REGISTERED PRINCIPAL OF THE STRATEGIC FINANCIAL ALLIANCE, INC. (SFA). SECURITIES AND ADVISORY SERVICES ARE OFFERED THROUGH SFA. EMAIL: MKEEN@KEENPOCOCK.COM.

NARFE’s WEBINARS

Provide Answers for the Federal Community New Webinars Upcoming NARFE Federal Benefits Institute Webinars Presented by Tammy Flanagan:

EXPLORING TSP WITHDRAWAL OPTIONS Thursday, May 26 2 p.m. ET

Tammy Flanagan, nationally recognized federal benefits expert and NARFE member, helps you take control of your future with straightforward guidance on complex federal benefits.

View Now On-Demand View archived webinars at www.NARFE.org/Institute Claiming Social Security Survivor Benefits: Key Decisions for Feds of All Ages

5-YEAR COUNTDOWN TO RETIREMENT Thursday, June 30 2 p.m. ET

NARFE Federal Benefits Institute

www.NARFE.org/Institute

What’s Your Best Retirement Date?

From Federal Employee to Annuitant: Master the Process FEHBP and Medicare: Make the BEST Choice Will You Be Ready for Retirement?

NARFE members always view FREE! Not a member? Join NARFE today at

www.narfe.org/join to access all NARFE Federal Benefits Institute recorded and upcoming live webinars.

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

|

41

The Informed Citizen

INFORMATION SHARING

C

ommunication is vital to any organization. NARFE’s communication platforms begin with this magazine, the only vehicle that all members receive by virtue of its delivery through the U.S. Postal Service. However, internet-based products and services are increasingly crucial to information delivery, legislative advocacy, and membership recruitment and retention. Are you receiving all of the information you should?

NARFE’s website, www. narfe.org, creates a positive first impression for potential members and provides timely, focused content for members. As important, email allows two-way communications. NARFE staff provides timely alerts to inform and engage an ever-growing portion of members, activists and advocates. Members’ emails provide vital feedback. For example, tracking emails sent by NARFE activists to their members of Congress via NARFE’s Legislative Action Center (http:// cqrcengage.com/narfe/) complements and empowers our lobbyists.

Another Face of NARFE: Federation Websites While nine of NARFE’s 54 federations lack a current website, 45 federations offer one of widely varying quality. Of these, 18 use the website template provided

by NARFE and are hosted on NARFE.org. The 27 remaining federations have independently hosted websites. As a whole, federation websites are improv-

42

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ing. All provide some electronic link to one or more federation officers. Most provide a colorful home page with a welcoming message and links to further information. Many present an inviting face for both current and prospective members. Some are very professional, offering a wide menu of information including recent newsletter(s), chapter and district officer listings, national and state advocacy information, a photo gallery, national and federation convention particulars, and quick links to other NARFE. org-hosted information. The quickest fix for the most glaring problem, long-expired content, is to plug upcoming federation and national conventions, including the 2016 convention in Reno, NV, and 2018 convention in Jacksonville, FL. It is without question that federation webmasters are performing a vital service to their fellow members.

NARFE Email The NARFE email system also allows NARFE Headquarters and federation and chapter

BY CHRISTOPHER FARRELL, SENIOR ANALYST

presidents to communicate on some or all issues, depending on the member’s appetite for information. Sadly, however, the majority of NARFE members do not have an email address in their member record, so they are in the dark when NARFE issues an Action Alert on legislation that threatens their benefits; issues an invitation to partake of a NARFE information initiative, such as our new NARFE Federal Benefits Institute webinars; or informs them of pending changes in their benefits. Without an email address on record, members also cannot get our weekly electronic news digest, NARFE NewsWatch, which reprints select stories from the major news outlets that cover federal benefits issues.

To add your email address to your record, call toll-free 800-456-8410 or go online to www.narfe.org, log in using your member ID (found on your magazine mailing label) and select “Update My Record.” You will be provided several options.

You can choose to receive all NARFE email messages, only those sent by NARFE Headquarters on matters involving legislative and federal benefits issues, only those sent by your state federation and local chapter, or no email messages. We hope you will opt in to these informative messages. The benefits you help protect might be your own.

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Witness the 128th Tournament of Roses Parade and tour the “City of Angels.” Enjoy a private YMT exclusive float viewing with included multimedia presentation by the parade organizers and dinner.

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Alzheimer’s Update

REDUCING ALZHEIMER’S RISK FACTORS

A

ccording to the Alzheimer’s Association, most experts believe that the majority of Alzheimer’s disease may be the result of interactions among genes and lifestyle.

Age, family history and heredity are all risk factors we cannot change. Now, research indicates we may be able to reduce our risk factors through a healthy lifestyle and effectively managing other health conditions.

Head Trauma’s Link to Alzheimer’s There may be a strong link between serious head injury and future risk of Alzheimer’s, especially when trauma occurs repeatedly or involves loss of consciousness.

Protect your brain by buckling your seat belt while driving or riding in a moving vehicle. Wear your helmet when participating in sports. And “fall-proof” your home. Falls are the leading cause of traumatic brain injury for people of all ages.

The Heart-Brain Connection Growing evidence links brain health to heart health. Several conditions − such as high blood pressure, diabetes, hypertension and high cholesterol (LDL) – that are known to increase the risk of cardiovascular disease also increase the risk of developing Alzheimer’s.

Autopsy studies show as many as 80 percent of the people with Alzheimer’s disease also had cardiovascular disease.

Current evidence also suggests 44

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that heart-healthy eating may help protect the brain. These are diets that limit sugar and saturated fats and include plenty of fruits, vegetables and whole grains.

Though no one diet is best, two that have been studied and may be beneficial are the DASH (Dietary Approaches to Stop Hypertension) diet and the Mediterranean diet. The former emphasizes vegetables, fruits and fat-free or low-fat dairy products and includes whole grains, fish, poultry, beans, seeds, nuts and vegetable oils, while it limits sodium, sweets, sugary beverages and red meats. A Mediterranean diet includes relatively little red meat and emphasizes whole grains, fruits and vegetables, fish and shellfish, nuts, olive oil and other healthy fats.

Although the brain represents only about 2 percent of body weight, it uses about 25 percent of the energy we consume; so maintaining a healthy cardiovascular system to deliver that energy is critically important.

BY MERV STUCKEY, NARFE-ALZHEIMER’S CHAIR

The Benefits of Exercise Keeping muscles fit also matters. A 2009 study reported that those who maintained muscle strength were significantly less likely to develop memory impairment or Alzheimer’s disease.

Regular physical exercise may be a beneficial strategy to lower the risk of Alzheimer’s and vascular dementia.

Walk to End Alzheimer’s The Alzheimer’s Association Walk to End Alzheimer’s® is the world’s largest event to raise awareness of and funds for Alzheimer’s care, support and research. In January, NARFE President Richard G. Thissen signed the agreement making NARFE a member of the Walk to End Alzheimer’s National Team Program. As a National Team, NARFE will gain exposure and will have its logo on the National Team website as well as on banners displayed at events nationwide. In the 2015 Walk season, NARFE raised more than $26,000. This year, the Association’s goal is to raise at least $50,000. (The money raised does not count toward NARFE’s Alzheimer’s research fund total.)

To learn more, visit www.alz. org/NARFEwalks.

MERV STUCKEY IS CHAIR OF THE NARFEALZHEIMER’S NATIONAL COMMITTEE. EMAIL: NARFEROADRUNNER@COMCAST.NET. THIS COLUMN APPEARS QUARTERLY.

M

New amplified phone lets you hear AND see the conversation.

o ct N t ra e n Fe Co No ly th on

Breakthrough technology converts phone calls to captions.

The Captioning Telephone converts phone conversations to easy-to-read captions for individuals with hearing loss.

A simple idea… made possible with sophisticated technology.

If you have trouble understanding a call, the Captioning Telephone can change your life. During a phone call the words spoken to you appear on the phone’s screen – similar to closed captioning on TV. So when you make or receive a call, the words spoken to you are not only amplified by the phone, but scroll across the phone so you can listen while reading everything that’s said to you. Each call is routed through a call center, where computer technology – aided by a live representative – generates voice-to-text translations. The captioning is real-time, accurate and readable. Your conversation is private and the captioning service doesn’t cost you a penny.

Captioned Telephone Service (CTS) is regulated and funded by the Federal Communications Commission (FCC) and is designed

exclusively for individuals with hearing loss. In order to use CTS in your home, you must have standard telephone service and high-speed Internet connectivity where the phone will be used.

Callers do not need special equipment or a captioning phone in order to speak with you.

Finally… a phone you can use again.

The Captioning Telephone is also packed with features to help make phone calls easier.

SEE what you’ve been missing!

“For years I avoided phone calls because I couldn’t understand the caller… now I don’t miss a thing!”

See for yourself with our exclusive home trial. Try the Captioning Telephone in your own home and if you are not completely amazed, simply return it within 60-days for a refund of the product purchase price. It even comes with a 5-year warranty.

The keypad has large, easy to use buttons. You get adjustable volume amplification along with the ability to save captions for review later.

It even has an answering machine that provides you with the captions of each message.

Captioning Telephone Call now for our special introductory price!

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The Captioning Telephone is intended for use by people with hearing loss. In purchasing a Captioning Telephone, you acknowledge that it will be used by someone who cannot hear well over a traditional phone.

81112

Do you get discouraged when you hear your telephone ring?

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

2016

G FUND

F FUND

C FUND

S FUND

I FUND

APRIL

0.14%

0.41%

0.39%

1.73%

1.89%

MARCH

0.15%

0.93%

6.79%

8.24%

6.59%

FEBRUARY

0.15%

0.68%

-0.12%

0.50%

-2.82%

YTD

0.63%

3.55%

1.77%

1.02%

-0.39%

1 YEAR

2.05%

3.05%

1.29%

-5.53%

-9.94%

3 YEAR*

2.12%

2.77%

11.34%

8.72%

1.43%

5 YEAR*

1.96%

3.94%

11.08%

8.55%

1.81%

10 YEAR*

2.85%

5.19%

6.96%

7.11%

1.75%

L INCOME

L 2020

L 2030

L 2040

L 2050

APRIL

0.34%

0.58%

0.75%

0.85%

0.95%

MARCH

1.53%

3.35%

4.54%

5.25%

5.94%

FEBRUARY

0.01%

-0.24%

-0.41%

-0.51%

-0.63%

YTD

0.96%

1.05%

1.14%

1.15%

1.10%

1 YEAR

1.40%

-0.31%

-1.10%

-1.73%

-2.49%

3 YEAR*

3.55%

5.39%

6.23%

6.79%

7.19%

5 YEAR*

3.54%

5.49%

6.36%

6.92%

7.30%

10 YEAR*

3.94%

4.90%

5.32%

5.52%

N/A

2016

*ANNUALIZED

*ANNUALIZED

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

G Fund: Government securities (specially issued to the TSP) F Fund: Government, corporate and mortgage-backed bonds C Fund: Stocks of large- and medium-size U.S. companies S Fund: Stocks of small- to medium-size U.S. companies (not included in the C Fund) I Fund: International stocks of 21 developed countries L Fund: (Lifecycle) Invested in the G, F, C, S and I Funds (The proportion of L Fund balance invested in each of the individual TSP funds depends on the L Fund chosen.)

OPM RETIREMENT CLAIMS PROCESSING STATUS

Global stock markets started the month strong and then faded due to disappointment over a lack of monetary easing in Japan. The C and S Funds were hurt by poor earnings from technology stocks and helped by energy stocks as the price of oil continued to rebound from recent lows. The I Fund had the best performance with a boost provided by a weakening dollar. The F Fund had modest gains.

All of the L Funds performed as expected and managed gains for the second straight month.

—BY RAVINDRA DEO, CHIEF INVESTMENT OFFICER, THRIFT SAVINGS PLAN

COUNTDOWN TO COLA

T

he Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 0.54 percent in March. To calculate the 2017 cost-of-living adjustment (COLA), the indices of July, August and September 2016 will be averaged and compared with the 2014 third-quarter average of 234.242. The percentage increase, if any, determines the COLA. March’s index, 232.209, is down 0.87 percent from the base.

Benefits awarded under the Federal Employees’ Compensation Act (FECA) to individuals suffering work-related injuries or illnesses are adjusted according to each calendar year’s percentage change in the CPI-W. March’s index is 0.61 percent higher than the December 2015 base index of 230.791.

The CPI represents purchases of food and beverages, housing, apparel, transportation, medical care, recreation, education and communication, and other goods and services. Included are various government fees, such as water charges, auto registration fees, and sales and excise taxes.

MONTH

2015

’16

For the Record

FUNDS ALL POSITIVE IN APRIL; I FUND GETS HIGHEST RETURNS

THRIFT SAVINGS PLAN FUND RETURNS

Claims Received Inventory

APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH

6,292 7,845 6,920 9,862 7,341 6,300 8,374 6,019 4,753 15,423 11,293 5,741

18,226 15,374 14,511 16,455 16,350 14,706 12,642 12,562 11,399 19,761 22,692 19,211

Avg # of Days % Processed in to Process Case in 60 Days or Less (YTD) More Than 90 Days

73% 68% 69% 69% 70% 70% 74% 76% 78% 79% 80% 82%

74 79 99 97 98 94 86 98 104 94 96 118

FOR THE NUMBER of new retirement cases the Office of Personnel Management (OPM) receives each month by agency and the percent with errors that it returns to those agencies, go to www.opm.gov/retirement-services/. Source: OPM 46

| J U N

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CPI-W

Monthly % Change

% Change from 234.242

OCTOBER 2015

232.373

-0.12

-0.80

NOVEMBER

231.721

-0.28

-1.08

DECEMBER

230.791

-0.40

-1.47

JANUARY 2016

231.061

+0.12

-1.36

FEBRUARY

230.972

-0.04

-1.40

MARCH

232.209

+0.54

-0.87

APRIL MAY JUNE JULY AUGUST SEPTEMBER

Donate to NARFE Programs Support Alzheimer’s Research

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

WRITE YOUR CHAPTER NUMBER ON CHECK; MAKE IT PAYABLE TO: NARFE-Alzheimer’s Research

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

Please circle: Mr. Mrs. Miss Ms. AND MAIL TO: Name: Alzheimer’s Association Address: 225 N. Michigan Ave., 17th Floor City: State: ZIP: Chicago, IL 60601-7633 Chapter Number: Credit Card Information:

MasterCard VISA NARFE MEMBERS CONTRIBUTED FOR If you have any questions, write to:

Discover AMEX ALZHEIMER’S RESEARCH: $12 Million Fund NATIONAL COMMITTEE CHAIR Card Number: Merv Stuckey, 2272 E. Buster Mountain Dr. Expiration Date: (mm)/ (yy) Oro Valley, AZ 85755-4709 *Total as of March 31, 2016 3-Digit Security Code: 100% of all contributed funds go to Name: (please print) EMAIL: narferoadrunner@comcast.net

$11,756,378* Alzheimer’s research.

Signature

Join the Silver CIrcle CLIP THIS CONTRIBUTION FORM AND MAIL TO: NARFE Silver Circle, 606 N. Washington St. Alexandria, VA 22314

•For a contribution of $25 or more, you will receive a Silver Circle pin, and your name will be listed in narfe magazine with other contributors.

•For a contribution of $1,000 or more, your name will be placed on the “Wall of Fame” at NARFE Headquarters.

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

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

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

INSTALLMENT PLAN Wall of Fame 12-month installment plan

Give to the Scholarship and Disaster Funds

PLEASE MAIL COUPON AND CHECK TO: FEEA 3333 S. Wadsworth Blvd., Suite 300 Lakewood, CO 80227

/

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

My check is enclosed

(Please make check payable to NARFE Silver Circle.)

Please charge my credit card Card type MasterCard VISA

Discover AMEX Card Number: Expiration Date: (mm)/ (yy) Name: (please print)

Signature

MAKE CHECK PAYABLE TO: NARFE-FEEA Disaster Fund or NARFE-FEEA Scholarship Fund.

Date

YES!

Date

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/

I would like to help with my contribution.

Please check appropriate box(es). To make credit card contributions, call 800-338-0755. Scholarships are available to children, grandchildren and great-grandchildren of federal civilian retirees and current federal employees who are NARFE members.

NARFE-FEEA Disaster Fund

Amount: $

NARFE-FEEA Scholarship Fund

Amount: $

Name: Address: City: State: ZIP:

NARFE News

NEW DISCOUNTS!

AWARD-WINNING SERVICE OFFICERS

N

ARFE has named Geneva C. Howe the Association’s 2016 National Service Officer of the Year. Howe is service officer for Tarrant County Chapter 1583 and for the Texas Federation. She previously had won on the state and regional levels.

Howe reinvigorated the Texas Federation’s Area Service Officer Program and conducts training for chapter service officers. “Her leadership has produced dedicated service officers at all levels of the federation, addressing a problem and providing a solution that was sorely needed,” said Philip R. Kraus, federation president.

Howe also “spends countless hours in service guidance to her NARFE community, interacting with the Office of Personnel Management and NARFE Headquarters to resolve their problems and

SILVER CIRCLE DONORS UPDATE As of April 15, NARFE’s Silver Circle donation program stood at $140,185.

The program gives members a vehicle to donate to the Association beyond the norm.

Donors of $25 or more are listed in narfe magazine and receive a Silver Circle pin. Donors of a total of $1,000 or more have their names engraved on the Wall of Fame at NARFE Headquarters.

Donors from December 16,

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Omaha Steaks, Avis Car Rental and Budget Car Rental recently joined NARFE’s Affinity Partner Program. Affinity Partner companies provide discounts on products and services to members and per-transaction revenue to NARFE. Everyone wins! Check out all the discounts offered by NARFE’s Affinity Partners on pp. 62-63 in this issue.

concerns,” Kraus added.

“NARFE Chapter Service Officers provide members with help and information not immediately available from any other source,” said David Snell, director of the NARFE Federal Benefits Service Department. “These men and women give their time and effort in providing a service members can use and, by doing so, contribute greatly to NARFE’s recruitment and retention efforts.”

In the annual awards program, chapter presidents nominate their service officers, sending written nominations to their federation president. The federation president selects a federation winner and forwards the name to the regional vice president, who selects the regional winner. The national winner is chosen from the regional winners.

The 2016 regional winners are listed here. Region II: Renee Robinson of Wilmington, DE, Chapter 1922. Region III: Barbara E. Boomershine of Huntsville, AL, Chapter 443. Region IV: Dean D. Hemmer of Swansea, IL, Chapter 1019. Region V: Donna J. Kimmes of Bemidji, MN, Chapter 1049. Region VI: Geneva C. Howe of Fort Worth, TX, Chapter 1583. Region VII: Elizabeth Hicks of Roswell, NM, Chapter 731. Region VIII: William B. Doll of Santee, CA, Chapter 4. Region IX: Dorothy Smith of Pasco, WA, Chapter 1192.

Region X: Paula M. Dansker of Basye, VA, Chapter 2358.

2015-April 15 are listed here with their chapter numbers. Rodney Adelman of Chapter 1789 in Arizona qualifies for the Wall of Fame with a contribution of $1,000 or more.

Arizona: Helen C. Cox, 1874; John B. Cox, 1874. California: Denis T. McSweeney, 1255; Joyce E. McLaughlin, 1354. Colorado: Dennis Jones, 0821. eNARFE: Beverly Hale, 2363; Rene Williams, 2363. Florida: Anthony J. Copperill, 1683; Susan J. O’Brien, 2247. Georgia: Betty L. Godwin, 0316; William E. Zwicker, 1348. Illinois: Lynne Adams Whitaker, 1771. Indi-

ana: Donica R. Miller, 0330; Ernest H. Smith, 1612. Maryland: James DeSantis, 0422; Betteanne M. Priest, 1734; Edward E. Priest, 1734. Michigan: Mark Carver, 1593. Missouri: Mary McManus, 0112. New Jersey: William Gizzi, 1000. North Carolina: Richard A. Martino, 0337; Carolyn S. Hunsucker, 0692. North Dakota: Kenneth L. Grosz, 0119. Oregon: Lou Piha, 0210.

Tennessee: Joseph T. Schartung, 0324. Texas: Karen E. Cooper, 0030.

Virginia: Harriett Vandegrift, 0180.

Wisconsin: Gordon T. Sander, 0094; Kenneth L. Smith, 0094.

In the photo above, Geneva C. Howe accepts the 2015 Region VI Service Officer Award from Marshall L. Richards, Region VI vice president.

Why the Boomers?

B

aby boomers are boomers now find themNARFE’s marketing team has people born durselves likely to outlive conducted studies and continually ing the posttheir money.” monitors the reasons that prospecWorld War II baby Now, boomtive customers cite for joining and boom, approxiers face a world not joining NARFE. Mandatory mately between in which their chapter membership is one objecthe years 1946 and incomes will no tion that comes up repeatedly. While SECURE 1964. They include longer grow at prospective boomer members can THE people who are the rate they once see the benefits of NARFE’s legisbetween the ages of did, and costs for lative programs that protect their FUTURE 52 and 70 in 2016. food, housing, health- interests, they are not willing to pay One of the recomcare and transportation what, to them, is additional dues mended strategies in the are likely to keep growing. for a requirement they don’t value.

NARFE Strategic Plan is to consider While federal employees in the That’s an objection that NARFE can behavior of baby boomers for future boomer age category are fortunate work around while stabilizing its NARFE membership recruiting to have retirement benefits, they will largest source of income: memberefforts. There is good reason for face the same need to protect those ship dues. that. In 2014 (the last year that the government has published figures), “For years, by their sheer heft in numbers, there were 831,032 federal workers baby boomers altered the economy, and above the age of 50.

It is important to recognize that now, it has altered them. After experiencing boomers do not join organizations historic wealth, many boomers now find and participate in them in the same themselves likely to outlive their money.” way that previous generations have.

But, throughout their adult lives, —Tom Brokaw, CNBC report on boomers boomers have benefited from their large numbers and uniformity of interests. benefits that their predecessors in The benefit for NARFE members Because of boomers’ size and NARFE have had. They will face the will be realized when the Associaspending power, businesses and orsame squeeze on income in the face tion’s financial picture improves and ganizations have changed to benefit of rising prices that NARFE’s curNARFE can continue to fund its legfrom boomer attention. Two good rent members face. islative program, anticipate future examples are Levi’s, which introMarketers who have a great challenges and threats to its memduced the relaxed fit style of jeans product to promote look for populabers’ incomes, and be strong enough for older boomers, and the auto tions of people for whom the product to surmount those challenges. industry, which created the minivan answers a pressing need. When for boomer parents. they encounter objections from a TO READ THE PLAN ...

“For years, by their sheer heft in potential customer, they find ways to The NARFE Strategic Plan is available numbers, baby boomers altered the eliminate the objection without dieconomy, and now it has altered minishing the product or service and online at www.narfe.org. Log in as a them,” observed Tom Brokaw in a in a way that will ultimately benefit member and click on the Strategic CNBC report on boomers. “After the seller. That brings us back to the Planning banner. experiencing historic wealth, many issue of boomers not joining NARFE.

S T R AT E G I C PL ANNING

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CONVENTION Seize the Opportunities!

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oing to the NARFE National Convention for the first time?

The convention holds many opportunities for you to learn about NARFE’s role in securing the wellbeing of the federal community. Here are just a few of the convention’s highlights: ORIENTATION Prior to the official kickoff of the convention on Sunday, August 28, all are invited to attend this session, which provides an overview of the convention agenda and details about your role.

BUSINESS SESSIONS Beginning Monday morning and continuing through Thursday morning, the convention will take care of Association business, with invited speakers and updates of major national programs.

BREAKOUT SESSIONS The convention will offer several

REGISTER ONLINE! Convention registration is now open online at www.narfe.org/convention 2016. Using the online registration form, members also can purchase banquet tickets.

Alternatively, members can register for the convention and purchase banquet tickets by using the mail-in paper registration form, found on the facing page (p. 51), and paying by check or credit card.

Convention registration deadline is August 1.

In addition, chapter officers now can visit the convention website to designate a delegate or proxy.

Candidate statements also appear on the convention website as they are submitted to the NARFE Communications Department.

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VOTING A major item of business during the National Convention will be voting on national bylaws amendments and general resolutions. The convention also will elect national officers for two-year terms.

training/information-sharing sessions during the course of the event. Topics include strategic planning, legislation, service officer training and information technology.

REGIONAL CAUCUSES The Association’s 10 regional vice presidents will host individual caucus sessions on Tuesday afternoon, primarily to conduct regional business and to elect regional vice presidents. All convention attendees within the jurisdiction of each region are invited to attend and participate.

STATE NIGHT AND CLOSING BANQUET In addition to the business sessions, make time for some fun at State Night, Tuesday from 6:30-9:30 p.m.

Attendees have the choice of attending two concurrent events, CountryWestern Night or Casino Night. For more information, visit the convention website, www.narfe.org/convention2016. Also, don’t forget to buy a ticket to the Banquet on Thursday night! Purchase your Banquet ticket online or by using the form on the facing page.

DEADLINES

• Delegate Forms: June 1 • Registration: August 1 • Proxy Forms: August 1

HOTEL ARRANGEMENTS Grand Sierra Resort and Casino 2500 E. Second St., Reno, NV 89595 800-648-5080

NARFE Rate: Single/Double Tier 1: $79 + tax; Luxury Summit Single/Double: $129 + tax. Additional person, more than two per room: $20 each.

For the NARFE Rate when calling, use Group Code: NRF16

Visit convention website for link to book hotel online. Cutoff date: July 24

AIRLINE DISCOUNTS Delta Airlines: www.delta.com/meetings. When booking online, select “Book Your Flight” and enter meeting ID NMMM5. A $25 charge will apply if booking by phone (800-328-1111).

United Airlines: www.united.com. When booking online, select “All Search Options” and enter Offer code ZVVB272256. A $25 per ticket charge will apply if booking by phone through United Meeting Reservations, 800-426-1122.

CONVENTION PRICING

$99 if postmarked by Aug. 1; $125 after Aug. 1 and onsite.

Each attendee must complete a separate form. Includes lunch on Monday, Tuesday and Wednesday.

BANQUET PRICING

$70 per ticket.

CANCELLATION POLICY

The convention registration fee is nonrefundable.

Banquet refunds are available only if reservations are cancelled 72 hours prior to Banquet.

PAYMENT BY CHECK

Make checks payable to NARFE and send to: NARFE Secretary/Treasurer’s Office 606 N. Washington St. Alexandria, VA 22314-1914 BANQUET SEATING

Tables will be assigned on a first-come, first-served basis.

Tables will seat 10 people.

Groups wishing to sit together should submit only one request, specifying number of seats desired and attach list of names.

Banquet tickets will be included in your registration packet.

Groups may pick up tickets at the NARFE Information Desk.

REGISTRATION FORM FOR CONVENTION AND BANQUET We encourage you to register online at www.narfe.org/convention2016.

CONVENTION REGISTRATION ATTENDEE TYPE Please check: o Member

o Nonmember Guest

NARFE ID # _____________________________________________________ Name ___________________________________________________________ Address _________________________________________________________ Name for Badge __________________________________________________ Chapter # ______________ Location of Chapter________________________ NOTIFY IN CASE OF EMERGENCY: Name __________________________________________________________ Phone number ____________________________________________________ SUBTOTAL – FOR CONVENTION (if postmarked by August 1): $

99

BANQUET TICKETS PLEASE RESERVE ___ TICKET(S) AT $70 EACH SUBTOTAL – FOR BANQUET: TOTAL (CONVENTION + BANQUET)

+$ $

CHARGE MY CREDIT CARD o MasterCard o VISA o Discover o AMEX Credit Card # ____________________________________________________ Expiration Date ____/____ (mm/yy) Name on card (print) ______________________________________________ Signature ________________________________________________________ DIETARY RESTRICTIONS/ ALLERGIES ____________________________

_____________________________________________________

Active and Retired Federal Employees ...

JOIN NARFE TODAY!

National Active and Retired Federal Employees Association The only organization dedicated solely to protecting and preserving the benefits of all federal workers and retirees, NARFE informs you of any developments and proposals that affect your compensation, retirement and health benefits, AND provides clear answers to your benefit questions.

Who Should Join?

Three Easy Ways To Join

If your future security is tied to federal retirement benefits — 1. Complete this application and return by mail with your payment. federal retirees, current employees, spouses, and individual 2. Join online at www.narfe.org. survivors — you should join NARFE. 3. Call 800-627-3394, Monday through Friday, 8 a.m. to 5 p.m. ET.

NARFE MEMBERSHIP APPLIC ATION

1Q5

q YES. I want to join NARFE.

I am a (check all that apply) q Active Federal Employee q Active Federal Employee Spouse q Annuitant q Annuitant Spouse q Survivor Annuitant

Street Address _____________________________________

Apt./Unit __________________________________________

q Please enroll my spouse

City _______________________ State _____ ZIP __________

Spouse’s Full Name ________________________________

Phone (__________) _________________________________

Spouse’s Email

Email _____________________________________________

NARFE respects the privacy of our members. Personal information is used to provide content and relevant communications to our members, and will not be sold or rented to third parties without your express permission.

q Mr. q Mrs. q Miss q Ms.

Full Name _________________________________________

Choose Your Membership Type

All NARFE members receive narfe magazine, access to federal benefits specialists, NARFE’s News Watch, legislative Hotline, and exclusive member discounts, along with professional lobbyists advocating on your behalf. Members choose one of two chapter options.

q Local Chapter

Under the direction of local leadership, chapters offer regular meetings often with invited speakers, as well as networking, volunteer and grass-roots lobbying opportunities. Annual chapter dues, determined by the locality, are charged in subsequent years.

Chapter Affiliation: Chapter # __ __ __ __

OR

_____________________________

PAYMENT OPTIONS q Check, Money Order or Bill Pay (Payable to NARFE) q Bill me (NARFE membership will start when payment is received.) q Charge my: q MasterCard q VISA q Discover q American Express Card No. ____________________________________ Expiration Date _____ /_________ mm yyyy Name on Card ________________________________

q eNARFE

The eNARFE Chapter provides a place for members to keep active in and informed about the federal community without the formality of a local chapter. Advocacy is encouraged within the e-community, and members may join with local groups for grass-roots participation. There are no additional dues for the eNARFE Chapter.

TOTAL DUES $40 First-Year Dues X __________ = __________ Per Person # Enrolling Total Dues

Signature ____________________________________ Date ________________________________________ MAY WE THANK SOMEONE? If applicable, please provide the name, membership and chapter number of the member who introduced you to NARFE: Recruiter’s Name_________________________________ Recruiter’s Membership ID _________________________ Recruiter’s Chapter Number ________________________

MAIL THIS APPLICATION TO NARFE Member Records 606 N. Washington St. / Alexandria, VA 22314-1914

Special Section

National Active and Retired Federal Employees Association

Consolidated Financial Statements for the Year Ended December 31, 2015

REPORT OF THE NATIONAL SECRETARY/TREASURER NARFE’s trend is to become leaner and smaller. In 2015, total revenue was greater than in 2014, but less than in 2013. Membership dues decreased by more than $663,000 from 2013 as membership declined.

Although not a convention year, we increased revenue in nondues areas such as seminars and conferences, advertising and royalties. Revenue also grew in contributions (NARFE’s card and calendar fundraising programs), although some was from late receipt of donations from 2014. Contributions to NARFEPAC also increased through the efforts of federations, chapters, Headquarters and the growing number of members who choose to become sustainers.

Total expenses decreased by more than $365,000 from 2013. We continue to find ways to economize, but we must continue to improve. We completed some deferred maintenance on the Headquarters building. This included replacing some windows at a cost of $100,000. We also expensed improved facilities for the media room and software, which has permitted us to support the new NARFE Federal Benefits Institute webinars. The webinars have resulted in the recruitment of hundreds of new members and are providing a service to existing members as well.

Investments had an unrealized loss of $60,000, compared to gains of $257,000 in 2014 and $537,000 in 2013. Gains have been reinvested, so we have not incurred any actual losses.

Although net assets increased, propelled by growth in NARFE-PAC contributions, we had a $36,000 decrease in the operating fund. As membership declines, we are being more efficient; we are traveling less and using our technology to our advantage. But prices of most of our supplies continue to rise.

The staff continues to suggest ways we can work smarter and more efficiently. The Budget and Finance Department continues its support of our organizational improvements.

REPORT OF THE NATIONAL EXECUTIVE BOARD AUDIT COMMITTEE The National Executive Board (NEB) Audit Committee met March 22 with representatives of the audit firm Councilor, Buchanan & Mitchell, P.C., Certified Public Accountants, to review the Association’s audit of NARFE finances for the calendar year ended December 31, 2015.

The NEB Audit Committee members participating were Region IX Vice President Lanny G. Ross (Chair), Region III Vice President Jerry Janci and Region X Vice President William Shackelford. Also participating were NARFE President Richard G. Thissen, Secretary/Treasurer Jon Dowie and Budget & Finance Director Tayo Coker.

The audit firm’s representatives, Peter Reilly and Julia Lafferty, provided a comprehensive review of NARFE’s Consolidated Financial Statements and Supplementary Information Audit. They reported finding no weaknesses.

With the declining NARFE membership, it should be noted that the auditors indicated that they were pleased to see that NARFE’s financial situation continues to improve, largely as a result of membership services, nondues revenue and fundraising.

The NEB Audit Committee accepts the report. Based upon the report, the Committee commends the Budget and Finance staff for their continued excellent performance.

Lanny G. Ross, Chair

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Independent Auditors’ Report The Executive Board National Active and Retired Federal Employees Association Alexandria, Virginia Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statements of National Active and Retired Federal Employees Association, which comprise the consolidated statement of financial position as of December 31, 2015, and the related consolidated statements of activities and cash flows for the year then ended, and the related notes to the consolidated financial statements.

Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the Association’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Association’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of National Active and Retired Federal Employees Association as of December 31, 2015, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

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Councilor Buchanan & Mitchell, P.C. Certified Public Accountants Bethesda, Maryland March 22, 2016

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National Active and Retired Federal Employees Association and Affiliate Consolidated Statement of Financial Position December 31, 2015 National Active and Retired Federal Employees and Affiliate (With Comparative Totals as of DecemberAssociation 31, 2014 and 2013)

National Active and Retired Federal Employees Association and Affiliate Consolidated Statement of Financial Position Consolidated Statement of Financial Position December 31, 2015 2015 Comparative Totals as of December 31, 2014 and 2013) December 31, 2015 (With(With Comparative Unrestricted Totals as of December 31, 2014 and 2013) Assets

Current Assets Cash and Cash Equivalents $Operating 293,160 Short-TermAssets Investments Accounts Receivable Net 340,949 Current Assets Interorganization Receivables $ 293,160 1,846 Cash and Cash Equivalents Prepaid Expenses and Deposits 129,611 Short-Term Investments Investments 2,833,142 Accounts Receivable - Net 340,949 Interorganization Receivables 1,846 Total Current Assets 3,598,708 Prepaid Expenses and Deposits 129,611 Investments 2,833,142 Property and Equipment Land 700,000 Total Current Assets 3,598,708 Buildings 4,355,237 Furniture, Property andEquipment, Equipmentand Software 2,056,090 Land 700,000 Less Accumulated Buildings 4,355,237 Furniture,Depreciation Equipment, and (3,741,769) Software and Amortization 2,056,090 Less Accumulated Net Property and Depreciation Equipment and Amortization

Total Assets Net Property and Equipment Liabilities and Net Assets Total Assets Current Liabilities Accounts Payable andAssets Liabilities and Net Accrued Expenses Interorganization Current Liabilities Payables Chapter Payable Accounts Dues Payable and Deferred AccruedRevenue Expenses Interorganization Payables Total Current Liabilities Chapter Dues Payable Deferred Revenue Noncurrent Deferred Revenue

Board Designated

Temporarily Restricted

Unrestricted Board Designated $ 147,480 10 $ 147,480 -3,002,280 -

Total Unrestricted 2015

Total Unrestricted $ 440,640 340,949 1,856 $ 440,640 129,611 5,835,422 340,949

Temporarily $Restricted 789,750 14,547 $ 789,750 2,862 14,547 -

3,149,770 -

700,000 6,748,478 4,355,237

807,159 -

--

2,056,090 700,000 4,355,237

--

(3,741,769) 2,056,090

Operating

10 3,149,770 3,002,280

3,369,558 (3,741,769) $ 6,968,266

1,856 6,748,478 129,611 5,835,422

-

3,369,558 (3,741,769)

$ 3,149,770

$10,118,036

-

3,369,558

-

3,369,558

$ 6,968,266

$ 3,149,770

$10,118,036

$

413,041 10 117,764 $ 2,458,947 413,041 10 2,989,762 117,764 2,458,947 479,473

$

$

1,846 38,000 -

$

1,846 39,846 38,000 393,196

413,041 1,856 117,764 $ 2,496,947 413,041 1,856 3,029,608 117,764 2,496,947 872,669

39,846 433,042

3,029,608 3,902,277

807,159 2,862 -

$

$

700,000 * 7,204,932 4,257,398

700,000 * 7,031,239 4,179,268

--

2,056,090 700,000 4,355,237

2,073,888 700,000 4,257,398

2,301,393 700,000 4,179,268

--

(3,741,769) 2,056,090

(3,234,780) 2,073,888

(3,250,101) 2,301,393

-

807,159

807,159 2,096 2,096 -

2,096 -

Total Current Liabilities Total Liabilities

2,989,762 3,469,235

Noncurrent Deferred Revenue Net Assets Unrestricted Total Liabilities Temporarily Restricted

479,473

393,196

872,669

3,499,031 3,469,235 -

2,716,728 433,042 -

6,215,759 3,902,277 -

2,096 805,063

3,499,031 3,499,031 -

2,716,728 2,716,728 -

6,215,759 6,215,759 -

805,063 805,063

$ 6,968,266 3,499,031

$ 3,149,770 2,716,728

$10,118,036 6,215,759

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

$ 6,968,266

$ 3,149,770

$10,118,036

2,096 2,096 -

$

$

2013 Total

2015 2014 2013 Total Total Total $ 1,230,390 $ 1,055,325 $ 1,155,293 355,496 124,688 214,434 $ 1,230,390 - * $ 1,055,325 - * $ 1,155,293 - * 132,473 149,542 119,418 5,835,422 5,875,377 5,542,094 355,496 124,688 214,434 - * - * - * 7,553,781 * 7,204,932 * 7,031,239 * 132,473 149,542 119,418 5,835,422 5,875,377 5,542,094

3,369,558 (3,741,769)

807,159 805,063 807,159

3,796,506 (3,234,780)

3,930,560 (3,250,101)

$10,923,339 * $11,001,438 * $10,961,799 * 3,369,558

$

2014 Total

700,000 * 7,553,781 4,355,237

$

2015 Total

3,796,506

3,930,560

$10,923,339 * $11,001,438 * $10,961,799 * $

415,137 $ 634,414 $ 504,794 - * - * - * 117,764 118,126 125,993 $ 2,496,947 415,137 $ 2,658,486 634,414 $ 2,784,387 504,794 - * - * - * 3,029,848 * 3,411,026 * 3,415,174 * 117,764 118,126 125,993 2,496,947 2,658,486 2,784,387 872,669 863,921 968,379 3,029,848 * 3,902,517 *

3,411,026 * 4,274,947 *

3,415,174 * 4,383,553 *

872,669

863,921

968,379

6,215,759 3,902,517 * 805,063

6,305,184 4,274,947 * 421,307

6,251,554 4,383,553 * 326,692

7,020,822 6,215,759 805,063

6,726,491 6,305,184 421,307

6,578,246 6,251,554 326,692

$10,923,339 * $11,001,438 * $10,961,799 * 7,020,822 6,726,491 6,578,246 $10,923,339 * $11,001,438 * $10,961,799 *

* Interorganization receivables and payable eliminated in consolidation.

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

-5-

See accompanying Notes to Consolidated Financial Statements.

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National Active and Retired Federal Employees Association and Affiliate

National Active and Retired Employees Association Affiliate Statement of Activities NationalFederal Active andConsolidated Retired Federal Employees Associationand and Affiliate For the Year Ended December 31, 2015 Consolidated Statement of Activities For the Year Ended December 31, 2015 (With Comparative Consolidated Totals for theStatement Years Ended December 31, 2014 and 2013) of Activities (With Comparative Totals for the Years Ended 31, 2014 and 2013) For the Year Ended December December 31, 2015

(With Comparative Totals for the Years Ended December 31, 2014 and 2013) 2015 Unrestricted 2015 Board Total Temporarily 2015 Unrestricted Operating Designated Unrestricted Restricted Total Board Total Temporarily 2015 Operating Designated Unrestricted Restricted Total Revenues and Support Membership Dues $ 7,265,324 $ 61,161 $ 7,326,485 $ - $ 7,326,485 Revenues and Support Contributions - Calendar and Cards 2,865,097 2,865,097 2,865,097 Membership $ 7,265,324- $ 61,161- $ 7,326,485- $ - $ 7,326,485 ContributionsDues - PAC 725,990 725,990 Contributions and and Cards 2,865,097 2,865,097 2,865,097 Contributions--Calendar Silver Circle Other 14,235 10 14,245 23,087 37,332 Contributions 725,990 725,990 Contributions--PAC Protect America’s Contributions 14,235 1014,245 23,08737,332 2,830 Heartbeat - Silver Circle and Other 2,830 2,830 Contributions Advertising - Protect America’s 936,860 936,860 936,860 2,830 Heartbeat 2,830 -2,830 -Royalties 159,889 159,889 159,889 Advertising 936,860 -936,860 -936,860 Seminars and Conferences 139,308 139,308 139,308 Royalties 159,889-159,889-159,889National Convention Revenue Seminars 139,308 -139,308 -139,308 Other and Conferences 22,850 22,850 22,850 National Convention -Net Assets Released Revenue from Restrictions 306,219 60,000 366,219 (366,219) Other 22,850 22,850 22,850 NetTotal Assets Releasedand from Restrictions 306,219 60,000 366,219 (366,219) Revenues Support 11,712,612 121,171 11,833,783 382,858 12,216,641

2014 Total 2014 Total $ 7,673,350 2,503,282 $ 7,673,350 594,599 2,503,282 30,401 594,599 30,401 4,638 767,141 4,638 127,975 767,141127,975 271,339 26,227 271,33926,227 11,998,952

2013 Total 2013 Total $ 7,990,435 2,849,402 $ 7,990,435 331,139 2,849,402 53,275 331,139 53,275 28,107 895,704 28,107 177,163 895,704 52,490 177,16352,490 38,942 -38,942 12,416,657

Total Revenues and Support Expenses Program Services Expenses Communications Program Services Rebates to Federations Communications New Member Rebates to Rebates to Federations Federations and Chapters New Member Rebates to Legislative Program Federations andProgram Chapters Federal Benefits Legislative Seminars Program Federal Benefits Program National Convention Seminars Protect America’s Heartbeat National Convention NARFE-PAC Protect Heartbeat NARFEAmerica’s Alzheimer’s Fund NARFE-PAC Life Membership Fund NARFE Alzheimer’s Fund LifeTotal Membership Program Fund Services

11,712,612

121,171

11,833,783

382,858

12,216,641

11,998,952

12,416,657

1,854,883 713,541 1,854,883 713,541 81,272 739,418 81,272 235,490 739,418 17,448 235,49017,448 81,302 343,132 81,302 23,087 343,13223,087 4,089,573

----------

1,854,883 713,541 1,854,883 713,541 81,272 739,418 81,272 235,490 739,418 17,448 235,49017,448 81,302 343,132 81,302 23,087 343,13223,087 4,089,573

----------

1,854,883 713,541 1,854,883 713,541 81,272 739,418 81,272 235,490 739,418 17,448 235,49017,448 81,302 343,132 81,302 23,087 343,13223,087 4,089,573

1,851,625 747,601 1,851,625 747,601 83,438 707,568 83,438 241,182 707,568241,182 308,607 94,364 308,607 500,871 94,364 21,117 500,87121,117 4,556,373

1,926,430 787,879 1,926,430 787,879 105,720 783,771 105,720 233,180 783,771233,180244,881 394,925 244,881 24,281 394,92524,281 4,501,067

Total Program Supporting ServicesServices General Administration Supporting Services Membership Recruitment General Administration Membership Services Membership Fundraising Recruitment Membership Services Fundraising Total Supporting Services

4,089,573

-

4,089,573

-

4,089,573

4,556,373

4,501,067

4,424,598 1,244,520 4,424,598 837,242 1,244,520 1,150,194 837,242 1,150,194 7,656,554

115,412 115,412-115,412

4,540,010 1,244,520 4,540,010 837,242 1,244,520 1,150,194 837,242 1,150,194 7,771,966

----

4,540,010 1,244,520 4,540,010 837,242 1,244,520 1,150,194 837,242 1,150,194 7,771,966

4,463,552 1,053,072 4,463,552 792,232 1,053,072 1,242,450 792,232 1,242,450 7,551,306

4,587,675 1,147,325 4,587,675 762,698 1,147,325 1,227,868 762,698 1,227,868 7,725,566

Total Supporting Total ExpensesServices

7,656,554 11,746,127

115,412 115,412

7,771,966 11,861,539

--

7,771,966 11,861,539

7,551,306 12,107,679

7,725,566 12,226,633

Total Expenses Increase (Decrease) in Net Assets from Operations Increase (Decrease) in Net Assets from Operations Investment Income (Losses)

11,746,127

115,412

11,861,539

12,107,679

12,226,633

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

-

11,861,539

(33,515)

5,759

(27,756)

382,858

355,102

(108,727)

190,024

(33,515) (64,014)

5,759 2,345

(27,756) (61,669)

382,858 898

355,102 (60,771)

(108,727) 256,972

190,024 536,633

(64,014) (97,529) 3,596,560 (97,529) $ 3,596,560 3,499,031

2,345 8,104 2,708,624 8,104 $ 2,708,624 2,716,728

(61,669) (89,425) 6,305,184 (89,425) $ 6,305,184 6,215,759

$

898 383,756 421,307 383,756 805,063 421,307

(60,771) 294,331 6,726,491 294,331 $ 6,726,491 7,020,822

256,972 148,245 6,578,246 148,245 $ 6,578,246 6,726,491

536,633 726,657 5,851,589 726,657 $ 5,851,589 6,578,246

$ 3,499,031

$ 2,716,728

$ 6,215,759

$

805,063

$ 7,020,822

$ 6,726,491

$ 6,578,246

See accompanying Notes to Consolidated Financial Statements.

See accompanying Notes to Consolidated Financial Statements.

56 | J U N 2 0 1 6

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National Active and Retired Federal Employees Association and Affiliate

National Active andFederal RetiredConsolidated Federal Employees and Affiliate National Active and Retired Employees Association and Affiliate Statement ofAssociation Activities For the Year Ended December 31, 2015 December 31, 2015 Consolidated Statement of Cash Flows For the Year Ended (With Comparative Totals for the Years Consolidated Statement ofEnded CashDecember Flows 31, 2014 and 2013) (With Comparative Totals for Years Ended December For the the Year Ended December 31, 2015 31, 2014 and 2013) (With Comparative Totals for the Years Ended2015 December 31, 2014 and 2013) Operating

Unrestricted Board Designated

Revenues and Support

Cash Flows from Operating Activities Membership Dues $ 7,265,324 $ Increase in Net Assets Contributions - Calendar and Cards 2,865,097 Adjustments to Reconcile Increase in Net Assets Contributions - PAC Contributions - Silver Circle and 14,235 to Net Cash Provided

by Other Operating Activities Contributions - Protectand America’s Depreciation Amortization Heartbeat Net Realized and Unrealized Losses 2,830 (Gains) Advertising 936,860 on Investments Royalties 159,889 Lossand onConferences Disposal of Property and Equipment Seminars 139,308 National Convention Revenue in Assets (Increase) Decrease Other Accounts Receivable - Net 22,850 Net Assets Released from Restrictions Prepaid Expenses and Deposits 306,219 Increase (Decrease) Total Revenues and Supportin Liabilities 11,712,612 Accounts Payable and Accrued Expenses Expenses Chapter Dues Payable ProgramDeferred Services Revenue

61,161 10

Supporting Services

Membership Recruitment Membership Services Supplementary Fundraising Disclosure

of Cash Cash Paid during the Year for Income Taxes Total Supporting Services Total Expenses

594,599 30,401

(30,124)

382,858

-

1,854,883 713,541

-

688,863

81,272 739,418 235,490 (728,325) 17,448 321,993 (107,466) 81,302 343,132 23,087 (513,798) -

175,065 1,055,325

4,089,573

4,540,010 $ 1,230,390 1,244,520 837,242 1,150,194

115,412 1,244,520 837,242 Flow Information 1,150,194 -

725,990 37,332

$ 7,990,435 2,849,402 331,139 53,275

17,069

(219,277) (362) (152,791)

General Cash andAdministration Cash Equivalents, End of4,424,598 Year

$ 7,673,350

469,545

11,833,783

-

$ 7,326,485

534,414

121,171

Net Increase (Decrease) in Cash and Cash Equivalents Total Program Services 4,089,573 Cash and Cash Equivalents, Beginning of Year

2013 Total

Total 2013

148,245 726,657 2,865,097 $ 2,503,282

2,830 936,860 446,287 159,889 139,308 22,850 (230,808) 366,219 (366,219)

-

2014

2014Total

$ 7,326,485 $ $ 294,331 $2,865,097 725,990 14,245 23,087

60,000

Communications 1,854,883 Rebates to Federations 713,541 Net Cash Provided by Operating Activities New Member Rebates to Federations and Chapters 81,272 CashLegislative Flows from Investing Activities 739,418 Program Federal Benefits Program 235,490 Purchases of Investments Seminars 17,448 Sales and Maturities of Investments National Convention Purchases of Property and Equipment 81,302 Protect America’s Heartbeat NARFE-PAC 343,132 NARFE Alzheimer’s Net Cash Used in Fund Investing Activities 23,087 Life Membership Fund -

2015

Total Temporarily Unrestricted 2015 Restricted

$

7,656,554

115,412

7,771,966

11,746,127

115,412

11,861,539

-

335,350

2,830 936,860 68,880 159,889 2,998 139,308 22,850 89,746 -

4,638 767,141 (339,993) 127,975 - 271,339 26,227 (30,203) -

28,107 895,704 177,163 52,490 38,942 -

2,027

12,216,641

11,998,952

12,416,657

1,854,883 713,541

1,851,625 747,601

1,926,430 787,879

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

(17,286) 7,016 (163,259)

640,684

-

81,272 739,418 235,490 (647,163) 17,448 245,000 (338,489) 81,302 343,132 23,087 (740,652) -

-

(99,968) 4,089,573 1,155,293

520,309

83,438 707,568 241,182 (1,733,199) 1,424,186 308,607 (795,662) 94,364 500,871 21,117 (1,104,675) -

105,720 783,771 233,180 244,881 394,925 24,281 -

(584,366) 4,501,067 4,556,373 1,739,659

4,540,010 $ 1,155,293 4,463,552 $ - 1,055,325

$

1,053,072 792,232 1,242,450

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

7,551,306

7,725,566

12,107,679

12,226,633

-

1,244,520 837,242 1,150,194

-

7,771,966

-

11,861,539

355,102

(108,727)

190,024

(60,771)

256,972

536,633

230

$

370

Increase (Decrease) in Net Assets from Operations

(33,515)

5,759

(27,756)

382,858

Investment Income (Losses)

(64,014)

2,345

(61,669)

898

(97,529) 3,596,560

8,104 2,708,624

(89,425) 6,305,184

383,756 421,307

294,331 6,726,491

148,245 6,578,246

726,657 5,851,589

805,063

$ 7,020,822

$ 6,726,491

$ 6,578,246

Increase (Decrease) in Net Assets Net Assets, Beginning of Year Net Assets, End of Year

$ 3,499,031

$ 2,716,728

$ 6,215,759

$

See accompanying Notes to Consolidated Financial Statements.

See accompanying Notes to Consolidated Financial Statements.

-6-7-

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57

National Active and Retired Federal Employees Association and Affiliate Notes to Consolidated Financial Statements December 31, 2015 1. ORGANIZATION National Active and Retired Federal Employees Association (the “Association”) was established to advance the general welfare of its members and to aid them in securing their rights under federal retirement laws. Fiftyfour (54) federations, located in the United States, Panama, Puerto Rico, and the Philippines, are affiliated with the Association and conduct local independent programs. Ten percent of all eligible member national dues collected are rebated to these federations to facilitate local association activities. In addition, there are 1,200 chapters affiliated with the Association that are located in the United States and some international locations. The chapters are established by members to increase the scope and effectiveness of the Association. Chapter dues, which are not reported as revenues and expenses of the Association in the accompanying consolidated statement of activities, are established by the chapters and are billed and collected by the Association with the national dues.

However, the Association rebates to the chapters one-third of the national fee charged for all new members.

The consolidated financial statements include the assets, liabilities, net assets, activities, and cash flows of the Association and its political action committee (NARFE-PAC or Affiliate), which was authorized by the executive board of the Association. All significant interorganization balances and transactions were eliminated in consolidation. The financial information of the 54 federations and the 1,200 chapters is not included in the Association and Affiliate’s consolidated financial statements.

58

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The consolidated financial statements have been prepared on the accrual basis of accounting.

Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents Cash and cash equivalents consist of cash deposits in checking accounts, certificates of deposit with original maturities of less than 90 days, money market accounts, and overnight investment accounts.

Investments Investments in debt and equity securities are stated at fair value as determined from published sources.

Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable consist primarily of amounts due to the Association for advertising in the narfe magazine and royalties.

Accounts receivable are reported at their outstanding balances.

The Association provides an allowance for doubtful accounts, as needed, for accounts deemed uncollectible. The allowance for doubtful accounts as of December 31, 2015, was $2,000.

Management periodically

evaluates the adequacy of the allowance for doubtful accounts by considering the Association’s past receivables loss experience, known and inherent risks in the accounts receivable population, adverse situations that may affect an obligor’s ability to pay, and current economic conditions.

The allowance for doubtful accounts is increased by charges to bad debts expense and decreased by charge offs of the accounts receivable balances. Accounts receivable are considered past due when no payments have been received for 30 days. Accounts receivable are charged off based on management’s case-by-case determination that they are uncollectible.

Property and Equipment Property and equipment are stated at cost and are depreciated and amortized on the straight-line method over the useful lives of the assets, ranging from 3 to 40 years.

The Association capitalizes items of property and equipment costing $1,500 or more. Depreciation and amortization expense for the year ended December 31, 2015, was $534,414.

Net Assets The Association and Affiliate classify net assets into two categories, unrestricted and temporarily restricted. All contributions are considered to be available for unrestricted use unless specifically restricted by the donors. Temporarily restricted net assets are contributed with donor-imposed purpose or time restrictions and are to be used for the restricted purposes or time periods as requested by the donors. The Association and Affiliate had no permanently restricted net assets at December 31, 2015.

Included in unrestricted net assets as of December 31, 2015, is

$2,000,000 that is designated by the Association’s executive board to pay operating expenses should the Association’s operations be disrupted by an unforeseen event. Also included in board-designated net assets are $571,243 for the life membership fund and $145,486 for the building fund.

Membership Dues Annual membership dues are deferred when received and are recognized as revenue over the periods covered by the memberships.

Life membership dues are recognized as revenue over the duration of the life membership based on the collective average life expectancy for life members, according to the “United States Life Tables,” 2007, published in the National Vital Statistics Reports, Volume 63, Number 7, published on November 6, 2014.

Contributions The Association and Affiliate report contributions as support when they are received. The Association and Affiliate report contributions as temporarily restricted support if restricted for use for specific programs or time periods.

When donor restrictions expire, that is, when purpose or time restrictions are accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and are reported in the consolidated statement of activities as net assets released from restrictions.

Royalties Royalties are earned by the Association for granting the use of its name to third parties that market services to Association members. Revenues from these activities are recorded when earned.

Rebates to Federations and Chapter Dues and Rebates Rebates to federations and chapter dues payable for renewing members are disbursed to

federations and chapters after their receipt in the Association’s headquarters. Rebates due to the federations on life members are deferred for the duration of the life membership and disbursed to federations monthly, when earned. New member rebates disbursed to federations and chapters were approximately $33,100 and $48,100, respectively.

Income Taxes The Association is exempt from federal income taxes under Section 501(c)(5) of the Internal Revenue Code and applicable state law.

The accounting standard on accounting for uncertainty in income taxes addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements. Under that guidance, the Association may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities based on the technical merits of the position.

Examples of tax positions include the tax-exempt status of the Association and various positions related to the potential sources of unrelated business income tax (UBIT). The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement. There were no unrecognized tax benefits identified or recorded as liabilities for 2015.

The Association’s policy would be to recognize interest and penalties, if any, on tax positions related to its unrecognized tax benefits in income tax expense in the consolidated financial statements. No interest and penalties

were assessed or recorded during 2015.

The Association’s Forms 990, Return of Organization Exempt from Income Tax, that have been filed as of December 31, 2015, for the years ended December 31, 2014, 2013, and 2012 are subject to examination by the Internal Revenue Service, generally for three years after they were filed.

NARFE-PAC is generally exempt from federal income tax under Section 527 of the Internal Revenue Code. However, interest revenue earned on NARFE-PAC investments is subject to federal and state income taxes. The taxes on that interest for the year ended December 31, 2015, were not significant. As of December 31, 2015, NARFE-PAC’s tax returns filed with the IRS for the years ended December 31, 2014, 2013, and 2012 remain open for examination.

Prior Years’ Comparative Totals The consolidated financial statements include certain prior years’ summarized comparative information in total but not by net asset class. Such information does not include sufficient detail to constitute a presentation in conformity with accounting principles generally accepted in the United States of America.

Accordingly, such information should be read in conjunction with the Association and Affiliate’s consolidated financial statements for the years ended December 31, 2014 and 2013, from which the summarized information was derived.

3. CONCENTRATION OF CREDIT RISK For purposes of Federal Deposit Insurance Corporation (FDIC) coverage, cash accounts are maintained in several different banks.

As of December 31, 2015, bank deposits exceeded the $250,000 FDIC-insured limit by $726,170.

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National Active and Retired Federal Employees Association and Affiliate Notes to Consolidated Financial Statements December 31, 2015 National Active and Retired Federal Employees Association and Affiliate

4.

4.

4.

4. INVESTMENTS AND FAIR VALUE MEASUREMENTS National Active Retired Federal Employees Association and Affiliate AND Fand AIR V ALUE M EASUREMENTS INVESTMENTS As of December 31,to2015, the Association and Affiliate’s only assets or Notes Consolidated Financial Statements December 31, 2015 liabilities measured attofair value onFinancial a recurring basis only consisted folNotes Consolidated Statements As of December 31, 2015, the Association and Affiliate’s assets of or the liabilities December 31, 2015of the following investments: lowing investments: measured at fair value on a recurring basis consisted Level 1 INVESTMENTS AND FAIR VALUE MEASUREMENTS Fair Value Inputs INVESTMENTS AND FAIR VALUE MEASUREMENTS As of December 31, 2015, the Association and Affiliate’s$ only assets or liabilities Corporate Stocks and Equity Mutual Funds 3,085,369 $ 3,085,369 measured at fair value on a recurring basis consisted of the following investments: As of December 31, 2015, the Association and Affiliate’s only assets or liabilities Corporate Bonds 2,569,107 2,569,107 measured at Backed fair value on a recurring basis consisted of the following investments:Level Government Securities 175,535 175,535 1 Certificates of Deposit

5,411 Fair Value Fair Value 5,835,422 $$ 3,085,369

5,411 Inputs Level 1 Inputs Total Investments 5,835,422 Corporate Stocks and Equity Mutual Funds $$ 3,085,369 Corporate Corporate Bonds Stocks and Equity Mutual Funds $ 2,569,107 3,085,369 $ 2,569,107 3,085,369 Government Backed Securities 175,535 175,535 Financial assets valued using Level 1 inputs are based on unadjusted quoted market prices Corporate Bonds 2,569,107 2,569,107 Financial assets valued using Level 1 inputs are based on unadjusted Certificates ofBacked Deposit 5,411 5,411 within active markets.

Government Securities 175,535 175,535 quoted market prices within active markets.

Certificates of Deposit 5,411 5,411 Total Investments $ 5,835,422 $ 5,835,422 Financial using2Level inputs based primarily on for Financial assetsassets valuedvalued using Level inputs2are basedare primarily on quoted prices Total assets Investments 5,835,422 $ 5,835,422 similar in active or inactive markets. quoted prices for similar assets in active or inactive$markets.

Financial assets valued using Level 1 inputs are based on unadjusted quoted market prices Financial assets valued usinginputs Levelare 3 inputs, ifunadjusted any, arequoted valuedmarket usingprices within active markets.

Financial assets valued using using Level Level 31 inputs, based assets valued if any, are on valued using unobservable inputs to unobservable inputs to measure fair value to the extent that observable within active markets. measure fair value to the extent that observable inputs are not available, thereby allowing for Financial assets valued Level 2 allowing inputs are activity based primarily onwhich quoted prices inputs are available, thereby for situations in there situations in not which thereusing is little, if any, market for the asset or liability atisfor the similar assets in active or inactive markets.

Financial assets valued using Level 2 inputs are based primarily on quoted prices little, if any, market activity for the asset or liability at the measurement measurement date. The fair value measurement objective is to determine an exit price from for the similar assets in active ormeasurement inactive that markets. perspective of a market holdsobjective the asset orisowes the liability. an exit price date. The fair valueparticipant to determine Financial assets valued using Level 3 inputs, if any, are valued using unobservable inputs to from theassets perspective of Level a market participant holds thethereby assetallowing or inputs owesfor measure to theusing extent that 3observable arethat notare available, Financial valued inputs, if inputs any, are valued using None offair thevalue Association and Affiliate’s financial assets valuedunobservable using Level 2 or to3 the liability. situations in which there is little, if any, market activity for the asset or liability at the measure fair value to the extent that observable inputs are not available, thereby allowing for inputs. measurement date.

The fair is value measurement objective is tofor determine an exit price from None of Association and financial assets are valued using situations in the which there little, if Affiliate’s any, market activity the asset or liability at the perspective a inputs. market that holds theobjective asset owes the liability. measurement The fair valueended measurement is toconsisted determine exit price from the Investment income for participant the year December 31,or2015, ofanthe following: Level 2 orof 3date. perspective of a market participant that holds the asset or owes the liability.

Temporarily None of the Association and Affiliate’s financial assets are valued using Level 2 or 3 Unrestricted Restricted Investment incomeand for Affiliate’s the year ended December 31, 2015, consisted of 3 inputs.

None of the Association financial assets are valued using LevelTotal 2 or the following: inputs.

384,618 898 Dividends and Interest $ 385,516 Investment income for the year ended December 31,(446,287) 2015, consisted of the- following: Net Realized and Unrealized Losses (446,287) Investment income for the year ended December 31, 2015, consisted of the following: Temporarily Total Investment Income

5.

T EMPORARILY RESTRICTED NET ASSETS Dividends and Interest Net Realized Unrealized Losses Dividends andand Interest

Temporarily restricted assets are Net Realized and Unrealizednet Losses Total Investment Income December 31, 2015: 5.

5.

Total Investment Income

$ (61,669) Unrestricted Unrestricted 384,618

$ 898 Restricted Temporarily Restricted 898

(60,771) Total $ Total 385,516 (446,287) 384,618 898 $ (446,287) 385,516 available(446,287) for the following - purposes as of (446,287) $ (61,669) $ 898 $ (60,771) $ (61,669) $ 898 $ (60,771) $ 768,262 36,801

TNARFE-PAC EMPORARILY RESTRICTED NET ASSETS Alzheimer’s Fund TNARFE EMPORARILY RESTRICTED NET ASSETS NET ASSETS 5.

TEMPORARILY RESTRICTED Temporarily restricted net assets are available for the following purposes as of Temporarily net assets are available for the following$ purTotal Temporarilyrestricted Restricted Net Assets 805,063 December 31, restricted 2015: Temporarily net assets are available for the following purposes as of poses as of December 31, 2015: December 31, 2015: NARFE-PAC $ 768,262 - 12 National and Retired Federal Employees Association and Affiliate NARFE Alzheimer’s 36,801 NARFE-PAC ActiveFund $ 768,262 NARFE Alzheimer’s Fund Total Temporarily Restricted Assets Notes to Net Consolidated Financial Statements Total Temporarily Restricted Net December Assets 31, 2015

5.

$

$

36,801 805,063

$

805,063

- 12 - 12 Net assetsRwere released donor restrictions by incurring expenses TEMPORARILY ESTRICTED NETfrom ASSETS (CONTINUED )

Additional NARFE Financial Data The salaries of the National Executive Board, as of December 31, 2015, are as follows: President: $116,958 Secretary/Treasurer: $104,728 Regional Vice Presidents: $25,970 In 2015, NARFE’s investments were held with these firms: • Operating Fund: Morgan Stanley and The Vanguard Group • Life Membership Trust Fund: Morgan Stanley

NARFE-PAC NARFE Alzheimer’s Fund

• Contingency Fund: Wells Fargo and Morgan Stanley.

Total Net Assets Released from Restrictions Due to Satisfaction of Program Restrictions

$

343,132 23,087

$

366,219

RETIREMENT PLAN The Association contributes 2 percent of each eligible employee’s annual compensation to a retirement savings plan and also matches 60 percent of each employee’s voluntary contribution (up to 6 percent of annual compensation). For employees to be eligible, they must have been employed by the Association for at least six months. Total contributions were $156,836 for the year ended December 31, 2015.

60 made by the | JAssociation U N 2 016

7.

7. SUBSEQUENT EVENTS The Association and Affiliate have evaluated subsequent events through March 22, 2016, the date on which the consolidated financial statements were available to be issued.

or otherwise satisfying the restricted purposes for the year ended Decem-

Net assets were released from donor restrictions by incurring expenses or otherwise ber 31, 2015, as follows: satisfying the restricted purposes for the year ended December 31, 2015, as follows:

6.

6. RETIREMENT PLAN The Association contributes 2 percent of each eligible employee’s annual compensation to a retirement savings plan and also matches 60 percent of each employee’s voluntary contribution (up to 6 percent of annual compensation). For employees to be eligible, they must have been employed by the Association for at least six months. Total contributions made by the Association were $156,836 for the year ended December 31, 2015.

SUBSEQUENT EVENTS

NARFE’s Dues Withholding Program What is dues withholding?

It is a dues-payment method that gives NARFE members (retirees) the option of having their annual NARFE membership dues deducted from their annuities on a monthly basis.

How does it work?

One-twelfth of your total dues is automatically deducted from your monthly annuity. Your monthly deduction is determined by the following formula: (National dues ÷ 12) + (Chapter dues ÷ 12) = Total Monthly Deduction

Advantages • Save 15% off your annual membership dues!

• Sign up your spouse and double your savings!

• You’ll never get another dues reminder from us!

• Your monthly payment is affordable and convenient!

• You may cancel your dues withholding at any time!

Application process It takes 60-90 days to process your application. Once the process is complete, you will receive a special membership card distinguishing you as a NARFE dues-withholding member.

To learn more about dues withholding, call 800-627-3394.

Retirees, spouses of retirees and annuitant survivors are eligible for dues withholding.

NARFE Dues Withholding Application for Retirees n YES. I want to enroll in NARFE’s Dues Withholding Program (Annual dues of $34 plus Chapter dues of record to be withheld annually.)

Social Security Number (9-digit number)

–

Civil Service Annuity Number

–

C S

–

–

–

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

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

NARFE MEMBERSHIP INFORMATION

Street Address ___________________________________

NARFE Membership ID ____________________________________

Apt./Unit________________________________________

NARFE Chapter Number____________________________________

City _________________________ State _____ ZIP _____

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

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

mm

yyyy

Withheld From My Annuity. (Additional annual dues of $34 plus Chapter dues of record to be withheld annually.)

If YES, enter spouse’s information below.

Spouse’s Name ___________________________________________ Spouse’s Membership ID ___________________________________

AUTHORIZATION (Withholding will begin in 60-90 days). No payment should be forwarded with application.

I authorize the United States Office of Personnel Management to make appropriate deductions from my annuity payments, not to exceed the amount certified by the National Active and Retired Federal Employees Association as the amount of dues for which I am annually obligated, in accordance with elections I make below, and to pay the deducted sum to the National Active and Retired Federal Employees Association (NARFE). This authorization shall also apply to any and all dues changes certified by NARFE membership in accordance with elections I make below: Please allow 60-90 days for processing.

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

Signature of Annuitant or Survivor-Annuitant

Date

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

MAIL THIS FORM TO: NARFE, ATTN: Member Records, 606 N. Washington St., Alexandria, VA 22314-1914 www.narfe.org 800-627-3394 rr@narfe.org Do not send money with this form

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Member Perks

SAVE MONEY WITH NARFE PERKS NARFE appreciates your service, and so do businesses across the country.

Whether you are planning your next vacation or planning for retirement, members can save money on everyday purchases, thanks to our Affinity Partners.

It’s just one more way we’re able to say “thank you” for being a NARFE member.

FINANCE AND LEGAL

IDShield & LegalShield 571-830-5489 www.legalshield.com/info/narfe LegalShield offers legal service plans as well as identity theft protection plans to NARFE members at discounted monthly rates. For more information on rates and to sign up today, visit the website above.

to secure a comparable quote. Your completed quote will help benefit NARFE! For complete terms and conditions, visit www.narfe.org/memberperks.

NARFE Insurance Services 800-233-5764 www.narfeinsurance.com

NARFE General Store 855-99NARFE (855-996-2733) www.narfegeneralstore.com

Designed and administered by Mercer Consumer, exclusively for NARFE members: senior age whole life, term life, Medicare supplements, hospital income plan, short-term recovery insurance, pet insurance, accidental death and dismemberment, cancer care, enhanced dental insurance and long-term care.

As the official provider of NARFE merchandise, the NARFE General Store offers NARFE-approved name badges, business cards, clothing, accessories, cups and mugs, plaques and clocks, and much, much more. Check out our online catalog for our customizable product line.

MOVING SERVICES

InFirst Federal Credit Union 800-328-1500 www.infirstfcu.org

All NARFE members will receive contracted pricing for all interstate shipments. This will apply to packing, transportation and full-value coverage against damages. Please mention you are a NARFE member.

INSURANCE

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

GEICO offers a special discount opportunity for NARFE members. To find out how much you could save, visit our website or call today and mention that you are a NARFE member. Have your current coverage information available in order 62

Bekins Van Lines 800-248-4810 narfe@bekins.com

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

GEICO 800-368-2734 www.geico.com/fed/narfe

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NARFE MERCHANDISE

At Wheaton, we know interstate relocating is much more than trucks and boxes. Moving is not simply an address change. It’s a life change. With a network of top-quality agents throughout the United States, Wheaton provides peace of mind with every relocation.

We offer you, as a NARFE member, benefits to help you have a positive interstate relocation experience. Call today and mention you are a NARFE member to start the moving process.

PRODUCTS

Omaha Steaks 800-228-9055 www.omahasteaks.com/ NARFE Since 1917, Omaha Steaks has been delivering customers the finest gourmet steaks, seafood, poultry, pork, sides and desserts. Omaha Steaks make memorable gifts for any holiday, or you can enjoy a gourmet meal right at home.

NARFE members can enjoy FREE SHIPPING on select combos and an additional 10% DISCOUNT at checkout! If calling, use promo code YTZ.

TELECOMMUNICATIONS

Sprint 877-746-8249 www.sprint.com/fed NARFE members receive a 15% discount with Sprint! Access www.sprint. com/fed, call 877-746-8249 or visit the Sprint store nearest you to take ad-

vantage of this offer. Please bring your member ID card with you to our stores to sign up for the discount, and provide code GNARF_ZMB.

with approximately 3,500 locations around the world, Budget is a leading rental car supplier now offering discounts to members of NARFE. Call or book your reservation now at Budget. com using the NARFE BCD number D871500.

Verizon FiOS www.narfe.org/memberperks NARFE members can save up to $10 a month on a new qualifying Triple Play bundle with Verizon FiOS Internet, TV and home phone service – savings of up to $120 per year. The FiOS 100% fiberoptic network delivers award-winning broadband and entertainment to your home. Only FiOS Internet customers get upload speeds as fast as their download speeds. With FiOS TV, 625+ channels are available, including 185+ in HD, and over 130,000 On Demand titles, thousands free. This exclusive online-only savings is only available to new Verizon customers or those upgrading to the Triple Play Package.

TRAVEL

Wyndham Hotel Group 877-670-7088 Choice Hotels International 800-258-2847 www.choicehotels.com With 6,200 hotels in the United States and throughout the world, Choice Hotels® offers something for everyone. As a NARFE member, receive 20% off your next stay at participating hotels when you use Special Rate ID 00801967. This offer is subject to availability and cannot be combined with any other offer.

Advance reservations required through phone number or website above; cannot be redeemed at individual hotels.

Choice Hotels brands are: Comfort Inn, Comfort Suites, Sleep Inn, Ascend Collection, Cambria, MainStay Suites, Suburban, EconoLodge, Clarion, Quality and Rodeway Inn.

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

Avis Car Rental 800-633-3469 www.avis.com Avis Car Rental is one of the world’s best-known car rental brands with approximately 5,500 locations in more than 165 countries. Avis has a long history of innovation in the car rental industry and is one of the world’s top brands for customer loyalty. Call or book your reservation now at Avis.com using the NARFE AWD number A701900.

Budget Car Rental 800-633-3469 www.budget.com Budget Car rental was founded in 1958 for the “budget-minded” renter. Today,

5282909. For complete terms and conditions, visit www.narfe.org/ memberperks.

NARFE members receive up to 20% off the “Best Available Rate” at participating locations. Call and give the agent your special discount ID number, 8000002694, at time of booking to receive discount. Call to reserve your room today at one of these fine hotels: Wyndham Hotels and Resorts®, Days Inn®, Ramada Worldwide®, Baymont Inns and Suites®, Hawthorn Suites® By Wyndham, Microtel Inns and Suites®, Howard Johnson®, Travelodge® and Knights Inn®. Advance reservations required through phone number above; cannot be redeemed at individual hotels.

WELLNESS

Beltone Hearing Care 888-418-6763

Local Hospitality www.narfe.org/travel NARFE is pleased to offer its members an exclusive travel discount service.

Savings may exceed 50% and average 10-20% below market on all hotels and car rental suppliers around the world.

Any hotel, any car, anywhere, anytime!

Beltone has been helping the world hear better for 75 years. NARFE members receive 25% off, and those with Blue Cross Blue Shield Service Benefit Plan insurance coverage may be eligible for two Beltone True 3™ hearing aids for ZERO out-of-pocket.

Life Line Screening 800-324-9906 www.lifelinescreening.com/ NARFE National 800-CAR-RENT www.nationalcarrental.com You Drive A Hard Bargain. Receive up to 20% off rentals at National Car Rental. To make a reservation, call National Car Rental at 1-800-CARRENT® and reference Contract ID

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

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

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The Way We Worked

CENSUS COUNTED ON CARD PUNCH OPERATORS In this 1940 photo, U.S. Census Bureau card punch operators in Washington, DC, work on population cards.

Before the Civil Rights Era of the 1960s and 1970s, federal workplaces often were segregated based on race and gender. White and African American Census Bureau employees did the same job but sat in separate office areas. Workers “punched� each card to represent data on the large census information sheets. For the 1940 Census, they punched approximately 328,341,293 cards.

PHOTO from the Records of the Census Bureau, National Archives; courtesy of National Archives History Office; in collaboration with the Society for History in the Federal Government (SHFG), bringing together government professionals, academics, consultants, students and citizens interested in understanding federal history work and the historical development of the federal government. To join, visit http://shfg.org.

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DID YOU KNOW? The Census Bureau began using electromechanical punch card tabulators for the 1890 Census. The machines were invented and patented

by Census Bureau employee Herman Hollerith. The Census Bureau replaced the punch cards with computers in the 1950s, according to the Census Bureau website, www. census. gov. Today, the agency uses high-speed document scanning to capture the data.

NARFE Hospital Income and Short-Term Recovery Insurance Plan: Available to NARFE Members and spouses age 65 and older with guaranteed acceptance.*

The costly expense of a Hospital stay and home recovery due to an unexpected injury or illness can take you far off course. And with Hospitals discharging patients sooner these days, even after complex surgeries and treatments, being financially impacted by the high costs of at home recovery has become a much more common occurrence.

The NARFE Hospital Income and Short Term Recovery Insurance Plan can help you protect the savings you’ve worked so hard for and reach the future you’ve planned for, as well as help you take control of your health care choices — allowing you to maintain your self reliance, and receive the level of care you deserve after leaving the Hospital.

This plan pays you, or anyone you choose, cash benefits for Hospital stays and home recovery expenses you often need after leaving the Hospital.

And, you can you use the cash as you see fit. No questions asked.

Plan features include: • In-Hospital cash benefits, starting the first day you’re Hospitalized for a covered Injury or Sickness.

• At-Home cash benefits, paid to you directly as soon as Medicare approves any post-Hospital home recovery treatments your doctor recommends.

• Cash benefits paid in addition to any other coverage you may already have, and you can use the money however you choose.

• Coverage that cannot be canceled because of your health or your age.

• Economical group rates specifically negotiated

by NARFE for our members.

To learn more or enroll in the NARFE Hospital Income and Short Term Recovery Insurance Plan, Call 1-800-233-5764 or visit us at www.narfeinsurance.com Request Number 073763-1-1-1 Hearing-impaired or voice-impaired members may call the Relay Line at 1-800-855-2881.

*This policy is guaranteed acceptance, but it does contain a Pre-Existing Conditions Limitation.

All benefits are subject to the terms and conditions of the policy. Policies underwritten by Hartford Life and Accident Insurance Company detail exclusions, limitations, reduction of benefits and terms under which the policies may be continued in full or discontinued. Plans may vary by state.

AR Ins. Lic. #100102691, CA Insurance License #OG39709 The Hartford® is The Hartford Financial Services Group, Inc., and its subsidiaries, In CA d/b/a Mercer Health & Benefits Insurance Services LLC including issuing company Hartford Life and Accident Insurance Company. ( ) ( ) 73763 (5/16) Copyright 2016 Mercer LLC. All rights reserved.

SRP-1151 A HLA 5384

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

Twin Insets for Security & Ease!

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

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• Padded ankle collars • Hand-stitched mocc toe • Twin elastic insets • Updated TPR outsole with excellent traction

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EVA contributes to energy return

Fabric aids in moisture control

Latex padding helps with shock reduction

EVA inserts in heel and forepart for added shock absorption

Dr. Scholl’s is a registered trademark of MSD Consumer Care, Inc. © 2016 MSD Consumer Care, Inc. All rights reserved.

Perfs at the forepart promote better air circulation

Heel cup enhances foot positioning

TPR outsole for lightweight, flexible comfort

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Haband® #1 Bargain Place, Jessup, PA 18434-1834 Card # _______________________________________ Exp.: ______/_____ Mr. Mrs. Ms. ___________________________________________________ Address __________________________________________ Apt. # ______ City & State _____________________________________ Zip ___________ Phone/Email __________________________________________________

Visa MC AmEx I enclose $________ purchase price, and only $9.99 shipping & handling for my entire order.

Discover ® Please add applicable state & local sales tax for the following states: AZ, FL, GA, MA, MN, Check Imported NE, NJ, PA, WI, & WV. FREE SHIPPING! When you pay by check, you authorize Men’s D Widths: us to use information WHAT WHAT HOW 7 71⁄2 8 81⁄2 9 91⁄2 10 from your check to SIZE? WIDTH? MANY? clear it electronically.

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