July 2016 NARFE Magazine

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CHOOSING A FINANCIAL ADVISER

P.41

THE FEDERAL FAMILY BY THE NUMBERS

t Volume 92 • Number 7

COVER STORY

CHARTING YOUR COURSE Financial Planning for Feds P.24

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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

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Sharing Your Advocacy Information Helps Amplify NARFE’s Message

7

2017 COLA Could Be a Lose-Lose Situation

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Help Wanted on WEP Reform

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Panel Considers Postal Retiree Benefit Changes

8 9

Groups Oppose Vets Bill

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NARFE Bill Tracker

Appropriations Bills Proceed as Budget Stalls

COLUMNS

4

COVER STORY SETTING YOUR COURSE. Federal agencies provide some financial planning information, but it may not be enough to bring feds safely to a secure retirement. It’s your ship. Take command!

From the President

38 Managing Money 40 The Informed Citizen DEPARTMENTS

32 CHOOSING A FINANCIAL ADVISER. If you need help reaching your financial goals, a professional can steer you in the right direction.

14 Questions & Answers 42 For the Record: TSP

Returns, Retirement Claims Status, Countdown to COLA

44 NARFE News

Strategic Planning

52 The Way We Worked On the Web

SPECIAL SECTIONS

VISIT US ONLINE AT:

41

www.narfe.org

46 National Convention

LIKE US ON FACEBOOK:

NARFE National Headquarters FOLLOW US ON TWITTER:

@narfehq

The Federal Family Reno Tour Opportunities

ON THE COVER

Illustration by Bill Pragluski, Critical Stages, LLC

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

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JULY 2016 | Volume 92 | Number 7

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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From the President

WHY I SUPPORT THESE RESOLUTIONS

I

n June’s column, I said I would devote this month’s column to the three resolutions that the National

Executive Board (NEB) has submitted for consideration at the upcoming NARFE National Convention. The NEB voted decisively for these resolutions because it believes their adoption is critical to the future viability of NARFE, and they are in keeping with NARFE’s Strategic Plan.

Optional Chapter Membership: This resolution would remove the requirement from the bylaws that every new member must join a chapter. Since the mid-1980s, when mandatory chapter membership was implemented, NARFE membership has been on a steady, steep decline.

Research has told us that many prospective members are not interested in participating in chapters. Research also has revealed that 25 percent of lapsed membership is directly related to the chapter requirement. So mandatory chapter membership is having a negative impact on both recruitment and retention. However, passage of this resolution will not mean the immediate demise of chapters. Chapters closing now are doing so because members are not stepping up into leadership positions, not for lack of members on the rolls. In fact, research has found that 74 percent of members who joined before 2008 will retain their chapter memberships, as will 66 percent of those who joined after 2008. Passage of this resolution means that new members will “join NARFE” and then will have the option of joining a chapter.

One Member, One Vote (OMOV): This

resolution would modify the voting structure within NARFE. Currently, chapters are authorized one vote for every 50 members or fraction thereof. At the 2014 National Convention, when NARFE’s membership totaled 237,359, only 581 delegates cast ballot votes. Unless members attend chapter meetings, their views are not reflected in the balloting. We know the vast majority of NARFE members do not attend chapter meetings, so our current structure effectively disenfranchises those members.

With OMOV, all NARFE members will have a voice in the governance of NARFE. Authorize NEB to Adjust National Dues Within Specific Limits: This resolution would provide the NEB with the agility to respond to unexpected financial situations. Currently, it takes a ballot vote at a National Convention to raise dues. So, it could take as long as two years for the Association to react after the identification of a resource shortfall or an impending calamity. The resolution is not a blank check because it limits the board to only one adjustment of up to 10 percent every two years.

I am aware that some members fear these changes will destroy NARFE as they know it. I am a product of the current NARFE structure: I was a chapter officer, a district officer, a federation officer and a regional vice president before I became your National Treasurer and, now, your National President. But from where I sit today, I recognize that NARFE cannot survive with our current governance structure and mandatory chapter membership. We must evolve. I strongly urge your support for these resolutions.

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

FOR MORE INFORMATION... ... including a video by National President Richard G. Thissen about the NEB-sponsored resolutions, go to www.narfe.org, log in and click on the Strategic Planning banner.

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DID YOU KNOW?

National Active and Retired Federal Employees could get a special discount on GEICO car insurance.

Tell GEICO that you are a NARFE member 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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geico.com/fed/narfe | 1-800-368-2734 Some discounts, coverages, payment plans and features are not available in all states or all GEICO companies. GEICO contracts with various membership entities and other organizations, but these entities do not underwrite the offered insurance products. 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 may not be involved in a formal relationship with each organization; however, you still may qualify for a special discount based on your membership, employment or affiliation with those organizations. GEICO is a registered service mark of Government Employees Insurance Company, Washington, D.C. 20076; a Berkshire Hathaway Inc. subsidiary. GEICO Gecko image Š 1999-2016. Š 2016 GEICO

Washington Watch

SHARING ADVOCACY INFORMATION AMPLIFIES NARFE’S POLICY MESSAGES

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hether you had a meeting in a legislator’s office or an informal conversation at the county fair, sharing information about your grass-roots

advocacy plays an important role in NARFE’s legislative success. August is “NARFE Grass-Roots Advocacy Month,” when NARFE members see and speak with their members of Congress when they are home for the long summer recess. As NARFE works on critical legislative priorities, reporting on your advocacy efforts is more important than ever.

Echo Chamber. Most members of Congress spend their time in just two places: Washington, DC, and their home districts. If they hear a message during a meeting on Capitol Hill and hear it repeated in their district offices, they will think that everybody across the nation is talking about that issue. Advocacy is often about creating an echo chamber.

If NARFE’s lobbyists know about members’ advocacy efforts, they can echo your message in their meetings. It also allows NARFE to strengthen its message within its broad agenda.

For example, we never know 6

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when a junior member of Congress will be thrust into the leadership. When Rep. Kevin Brady, R-TX, introduced the Equal Treatment of Public Servants Act (H.R. 711), which would reform the Windfall Elimination Provision (WEP), he was a member of the House Committee on Ways and Means. But by the end of the year, he was the chairman of the committee and an influential member of the Republican leadership team in the House. Knowing about the outreach that NARFE members in Rep. Brady’s district had done enabled us to act quickly to form a relationship with his

Capitol Hill office.

You can tell us about your advocacy by emailing the NARFE Legislative Department at advocacyinaction@narfe.org.

Make sure to include: • To whom you spoke and where; • What NARFE issues were discussed; and • What, if any, follow-up is needed.

Don’t Forget Your Colleagues. It also is important to share the information with the members and leaders of your chapter so they can build upon your conversation.

For example, if you attend your representative’s town hall meeting and discuss postal reform, a chapter officer can take a copy of narfe magazine to the district office of that member of Congress when postal reform legislation is introduced in the House. This coordination tells lawmakers NARFE has a well-oiled advocacy machine and presents a united front.

—BY SARAH WEISSMANN, GRASS-ROOTS PROGRAM MANAGER

2017 COLA COULD BE A LOSE-LOSE SITUATION

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ederal retirees usually welcome cost-of-living adjustments (COLAs) to their annuities, as they typically mean a larger check. But next year could be different, as a small COLA could result in a significant increase in Medicare Part B premiums for some retirees – an increase that could be larger than the increase in their annuity checks. It’s an odd situation that results from the interaction of several laws.

First, the so-called “hold harmless” provision applicable to Part B premiums states that the dollar increase in an individual’s Part B premium is limited to the dollar increase in an individual’s Social Security benefit. If there is no COLA, there can be no Part B premium increase for anyone paying those premiums from a Social Security benefit – about 70 percent of beneficiaries. Also, if there is a very small COLA that does not cover the increase in Part B premiums, the Part B increase is limited to the amount of the COLA. But this “hold harmless” provision does not apply to about 30 percent of beneficiaries – individuals who have higher incomes or who do not pay their Part B premiums from a Social Security benefit, including many federal retirees under the Civil Service Retirement System (CSRS). Making matters worse, Part B premiums are set at

a level to ensure that 25 percent of the cost of providing benefits is covered by total premiums.

This would force the beneficiaries not held harmless to shoulder the full cost of Part B premium increases. Last year, when those not held harmless faced a 52 percent increase in Part B premiums, NARFE was instrumental in obtaining a fix in the November 2015 budget deal that kept the full increase from taking effect. Instead, premiums for those not held harmless rose only as much as they would have had there been a COLA (approximately 15 percent).

Because of a provision enacted as part of that same budget deal, if there is a zero COLA for 2017, the same situation would occur.

Unfortunately, this provision does not apply if there is a small COLA for 2017. For example, if there is a 0.1 percent COLA, someone with a Social Security benefit totaling $2,500 per month would see a Part B premium increase of only $2.50 per month. This would cover some of the overall cost of the Part B premium increases, but it wouldn’t be enough to prevent a substantial spike in Part B premiums for those not held harmless.

The 2017 COLA won’t be known until the September inflation number (CPI-W) is released in October.

A small increase in prices could spell trouble for federal retirees.

HELP WANTED ON WEP REFORM! AT PRESS TIME, 102 members of the House of Representatives had cosponsored H.R. 711, a Windfall Elimination Provision (WEP) reform bill supported by NARFE. Rep. Kevin Brady, R-TX, the bill sponsor and chairman of the House Committee on Ways and Means, which has jurisdiction over the bill, has said he is “cautiously optimistic” it could pass this year. Please use the Legislative Action Center on NARFE’s website, www. narfe.org, to ask your representative to cosponsor and support H.R. 711.

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.

—BY JOHN HATTON, DEPUTY LEGISLATIVE DIRECTOR W W W. N A R F E . O R G

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Washington Watch

PANEL CONSIDERS POSTAL RETIREE BENEFIT CHANGES

B

ipartisan postal reform legislation is on its way. This sounds like a good thing, until you realize it could include changes to postal retiree health benefits.

At a May 11 House hearing, all signs pointed to a bipartisan consensus emerging around reform legislation that would require all postal retirees to enroll in Medicare or forfeit the health benefits that they earned through a career of service. For nearly 100,000 postal retirees, their spouses or survivors, this would mean another $122 per month in premiums (at a minimum) for Part B coverage. While there will be corresponding benefits to this enrollment in the form of lower co-pays and deductibles, it is NARFE’s position that no postal retiree should be forced to take additional health insurance coverage under threat of total loss of

their earned health benefits.

Yet members of the House Committee on Oversight and Government Reform, which held the May 11 hearing examining the state of the U. S. Postal Service (USPS) and potential reforms, indicated support for that proposal as part of a package of reforms likely to be introduced as legislation.

Support was expressed from both sides of the aisle, including from Rep. Jason Chaffetz, R-UT, chairman of the committee, and Rep. Elijah E. Cummings, D-MD, ranking minority member, as well as subcommittee leaders Reps.

Mark Meadows, R-NC, and Gerald E. Connolly, D-VA. Postmaster General Megan J. Brennan and National Association of Letter Carriers President Fredric V. Rolando also expressed support for so-called “Medicare integration.”

NARFE President Richard G. Thissen sent a letter to the com-

GROUPS OPPOSE VETS BILL

N

ARFE joined 11 other federal employee organizations in opposing provisions of the Veterans First Act, S. 2921, a Department of Veterans Affairs (VA) reform bill.

The groups sent a letter May 18 to Senate Majority Leader Mitch McConnell, R-KY, and Senate Minority Leader Harry Reid, D-NV, identifying three sections of the bill that they said would undermine due process and merit-based service protections for VA employees who are subject to discipline for misconduct or performance

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and allow undue political influence over the VA workforce. Federal agencies already have ample authority to hold their employees accountable, the groups said.

While the bill would apply only to VA employees, the coalition said it sets a dangerous precedent for the larger federal workforce.

The bill was introduced April 28 by a bipartisan group of senators. The Senate Committee on Veterans’ Affairs approved the bill unanimously on May 12. At press time, the bill had not been scheduled for action by the full Senate.

MYTH vs.

REALITY MYTH: NARFE endorses and supports a presidential candidate.

REALITY: NARFE does not endorse or support any presidential candidate.

NARFE has sent a candidate questionnaire to each of the 2016 presidential campaigns and will publish the responses received from the two major party candidates in narfe magazine to educate members on the candidates’ positions.

However, this is not, and should not be perceived as, an endorsement of any candidate. NARFE’s political arm, NARFE-PAC, also does not contribute funds to any presidential candidates.

mittee in advance of the hearing expressing NARFE’s views on postal reform, including its concerns with the proposal to mandate Medicare enrollment for postal retirees. Thissen argued that “postal retirees earned their health benefits throughout long careers of service. They should not be required to pay for additional health insurance coverage as a condition of continuing to receive those benefits.”

Unfortunately, none of the members – including traditional friends of NARFE – expressed similar concerns about forcing postal retirees to pay additional health insurance premiums for coverage they specifically declined.

At press time, the legislation had not yet been introduced.

—BY JOHN HATTON, DEPUTY LEGISLATIVE DIRECTOR

APPROPRIATIONS BILLS PROCEED AS BUDGET RESOLUTION STALLS

W

hile the House and Senate have all but abandoned efforts to pass a fiscal year 2017 budget resolution, the House and Senate Appropriations Committees are moving ahead with annual spending measures. The Senate Appropriations Committee has cleared six of the 12 bills, two of which have been passed by the full Senate. The House Appropriations Committee has approved seven, and the House has passed one.

By law, passage of the annual budget resolution conference

report, setting out the aggregate level of spending for all 12 annual appropriations bills, is the starting point for congressional budgetmaking. But, the 2015 budget deal struck by former Speaker John A. Boehner, R-OH, and embraced

by Speaker Paul D. Ryan, R-WI, includes aggregate discretionary funding levels criticized by more conservative House Republicans.

It is the disagreement over the budget deal that has stymied movement on the budget resolution. To skirt the dispute, Republican leaders have resorted to

some procedural sleight-of-hand.

Rather than divulge the total pot of money available to the appropriations committees, leaders have allocated the dollars piecemeal as each of the measures is readied for the floor. That way, the budget caps can be ignored, temporarily.

It remains to be seen if the process will hold together as Congress tries to keep its schedule of considering all 12 bills before recessing for the Republican and Democratic conventions in July and its traditional August recess.

—BY ALAN LOPATIN, LEGISLATIVE COUNSEL

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.

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

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Washington Watch

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

HEALTH CARE

BILL NUMBER / NAME / SPONSOR

WHAT BILL WOULD DO

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: 36 (D)

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 (FEHBP).

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

H.R. 4461: Federal Employee Rights Act / Rep. Tom Price, R-GA UNION RIGHTS

Cosponsors: 41 (R)

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

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

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 3.8 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

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: 62 (D) S. 2699: The Federal Adjustment of Income Rates (FAIR) Act / Sen. Brian Schatz, D-HI

narfe, April 2016

Referred to the Senate Committee on Homeland Security and Governmental Affairs

Cosponsors: 3 (D) H.Res. 12: Expresses the sense of the House that the Postal Service should take measures to ensure continuPOSTAL REFORM ation of six-day delivery / Rep. Sam Graves, R-MO

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

Cosponsors: 176 (D), 57 (R) 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)

H.R. 784: Protect Overnight Repeals the service standards Delivery Act / Rep. Rosa implemented by the Postal DeLauro, D-CT Service on 1/5/15 and directs the Postal Service to reinstate Cosponsors: 100 (D), 3 (R) 12/31/2011 service standards.

Referred to the House Committee on Oversight and Government Reform

S. 1742: Rural Postal Act of Returns to service standards 2015 / Sen. Heidi Heitkamp, of July 2012, preserves six-day D-ND delivery and puts a two-year 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: 2 (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), 49 (R)

H.R. 20: The Government By the People Act / Rep. John Sarbanes, D-MD CAMPAIGN FINANCE

Cosponsors: 159 (D), 1 (R)

H.R. 973: Social Security Fairness Act of 2015 / Rep. Rodney Davis, R-IL Cosponsors: 114 (D), 37 (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), 6 (R), 2 (I)

narfe, September 2015

(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

GPO/WEP

OPM SECURITY BREACH

BILL NUMBER / NAME / SPONSOR

WHAT BILL WOULD DO

H.R. 711: Equal Treatment of Reforms the Windfall Elimination Provision (WEP). For Public Servants Act of 2015 individuals who turn 62 in / Rep. Kevin Brady, R-TX 2017 or later, it provides a new formula that would deCosponsors: 38 (D), 62 (R) crease the 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.

Referred to the House Committee on Ways and Means

H.R. 3029: RECOVER Act / Del. Eleanor Holmes Norton, D-DC

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

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

Cosponsors: 33 (D), 1 (R)

S. 1746: RECOVER Act / Sen. Benjamin J. Cardin, D-MD

Cosponsors: 5 (D), 1 (I) H.R. 532: Federal Employees Paid Parental Leave Act / Rep. Carolyn Maloney, D-NY Cosponsors: 62 (D), 1 (R) PAID PARENTAL LEAVE

PENSION SCAM PROTECTION

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See story, p. 7

Referred to the Senate Committee on Homeland Security and Governmental Affairs

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

LATEST ACTION(S)

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: 132 (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 COVERAGE FOR OUT-OF-NETWORK SERVICES

Q

I need some guidance on Medicare coverage. I will be turning age 65 in September 2016 and plan to continue to work full time as a federal employee until at least December 2017 and possibly beyond. I have Blue Cross Blue Shield (BC/BS) Standard Option coverage under the Federal Employees Health Benefits Program (FEHBP) and use a number of out-of-network providers, including a concierge-practice internist.

Does Medicare cover any out-of-network costs?

A

Medicare will cover much of the cost not covered by your FEHBP BC/ BS plan when you get services from an out-of-network provider.

Since you are still employed, your FEHBP BC/BS coverage will be primary and Medicare will be secondary until you retire.

Concierge care is when a doctor charges you a membership fee before he or she accepts you into the practice. Neither Medicare nor your FEHBP plan will cover

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the membership fee.

Doctors who provide concierge care still must follow all Medicare rules: If they accept Medicare assignment, they can’t charge you extra for Medicare-covered services. In other words, the membership fee can’t include additional charges for services that Medicare covers unless the services are not medically necessary. If the concierge doctor does not accept Medicare assignment, he or she can charge you more

than the Medicare-approved amount but not more than 115 percent of the Medicare-approved amount.

OPM REDUCES ANNUITY IN CASE OF CSRS OFFSET

Q

I am a federal employee in the Civil Service Retirement System (CSRS) Offset system. When I retire, will the Office of Personnel Management (OPM) deduct the Social Security offset from my CSRS annuity, or does the Social Security Administration deduct it from my Social Security benefit?

A

OPM will calculate the amount of the Social Security benefit that you earned during the years you were under CSRS Offset. Using the same formulas Social Security would use, OPM will do two different calculations to establish the

offset amount. The amount will be the lesser of the two calculation results. OPM then will apply the offset to your annuity at age 62, if you are retired, or at retirement, if you are over age 62 at that time.

SMALL RAISE; NO COLA

Q A

Where is the 2016 raise?

When will it show up?

Every penny counts, and I could use the raise.

If you are still federally employed, you were scheduled to receive a 1 percent pay raise plus any applicable locality pay increase, payable on and after the first pay period in January 2016. If you did not get one, you should contact your agency payroll office.

If you are a retired federal worker, there was no cost-of-living adjustment in federal annuities triggered for 2016, so your gross annuity did not change.

RETIREES FEHBP IN RETIREMENT IS NOT AN ‘EMPLOYER’ PLAN

Q

I just finished viewing the NARFE Federal Benefits Institute webinar “Claiming Social Security” and am contacting you to clarify several issues, as suggested in narfe magazine and on NARFE’s website.

I am a Civil Service Retirement System (CSRS) retiree, carrying over my Federal Employees Health Benefits Program (FEHBP) health insurance into retirement. I

turned 65 last year and elected to take only Medicare Part A. Now I am hearing that if I don’t have employer-sponsored health benefits, I am subject to a penalty if I don’t take Medicare Part B within eight months of my eligibility.

I thought that because I have the FEHBP through the Office of Personnel Management (OPM) as a retiree, I don’t have to take Part B, hence the source of my confusion over the penalty as well as when I must elect Medicare Part B. Isn’t OPM an “employer” by definition? I am still working part time, so my income will put me at the higher costs for Part B. If I am penalized, it will also be at the higher rate, correct? I thought I would get NARFE’s view before I attempt to contact my Social Security office, as I will reach my full retirement age under Social Security this year and wanted as much clarity as possible on this matter first. (I am not taking Social Security yet, but I am eligible with more than 40 quarters.)

The other issue is whether the Windfall Elimination Provision (WEP) applies if I am over my full retirement age of 66. I have read conflicting statements on this. I believe I am subject to the WEP reduction, regardless of when I take Social Security.

A

Medicare Part B is not mandatory. It is your choice whether to enroll in Part B. You might want to view the NARFE Federal Benefits Institute webinar “FEHBP & Medicare: Make the BEST Choice” as you consider whether to take Part B.

Information also is available on the NARFE website, www.narfe. org. Log in and click on “Medicare and the FEHBP” under Federal Benefits Topics.

If you decide to enroll in Part B, you would be subject to the late enrollment penalty in addition to any income-related premium increase because of your earnings.

The facts are: If you are retired when you first become eligible for Medicare, you have a sevenmonth period within which to enroll in Medicare Part B without incurring the late enrollment penalty. While you have group health insurance coverage under the FEHBP in retirement, it is not considered employer-sponsored group health coverage, as it was while you were working; rather, it is considered retirement group health coverage. OPM pays your annuity but is not your employer.

The answer to your question about the WEP is yes, your Social Security benefits will be reduced because you are receiving an annuity for work where you did not pay into Social Security. This is the case even if you have reached your full retirement age when you apply for Social Security benefits.

SUSPENDING FEHBP

Q

I am a retired federal employee with a 65-yearold spouse. I have heard that I can temporarily suspend my spouse’s coverage under the Federal Employees Health Benefits Program (FEHBP) so that he can try out a less expensive Medicare Part C Advantage (Medigap) plan W W W. N A R F E . O R G

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15

Questions & Answers

and a Medicare Part D drug plan.

These cost less per month than the $200 per month of having him on a Self Plus One FEHBP plan this year. If he is not happy with the plan, can I re-enroll him in FEHBP again during Open Season?

A

Since you are the retiree and the enrollee in the FEHBP, you are the only one who can suspend or change enrollment coverage. The law does not provide dependent spouses with that authority. The facts are: If you are retired and are enrolled in a Medicare Part C Advantage plan, you can ask the Office of Personnel Management to suspend your FEHBP enrollment. If you

16

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suspend your FEHBP enrollment, no one who also was covered under your enrollment will have coverage. After you suspend your FEHBP enrollment, you may reenroll during any future annual Open Season or re-enroll immediately if you lose coverage under the Medicare Advantage plan.

SPOUSES, SURVIVORS AND THE FEHBP

Q

On page 18 of the May 2016 issue of narfe magazine, you answered a question about spousal survivor benefits. The NARFE member said he did not elect survivor benefits, yet he and his spouse

were covered by a Self Plus One plan under the Federal Employees Health Benefits Program (FEHBP).

How is this possible? I understood that if no survivor benefits were selected, the spouse was not eligible for the FEHBP.

A

If a retiree does not elect a survivor benefit for his or her current spouse, then upon the retiree’s death, the surviving spouse would not be eligible to continue FEHBP coverage. But until the retiree dies, he or she can cover a spouse under their FEHBP enrollment whether the retiree elected a survivor benefit or not.

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ANNUAL LEAVE LUMP SUM FOR DEC. 31 RETIREMENT

Q

I retired December 31, 2015, under the Federal Employees Retirement System (FERS). I was paid a lump sum of more than $7,000 for my unused annual leave. This sum was not included on my 2015 tax form. In fact, I received the money in 2016.

According to my former human resources office, the $7,000 will be included in the 2016 tax form.

Since it looks as though I received earned income in 2016, although I did the work in 2015, I can contribute money to an IRA in 2016. This appears to me to be a previously unreported perk for FERS employ-

ees who retire on the last day of the year.

My broker says the key is the year in which the income is reported to the Internal Revenue Service (IRS), not the year in which the work was accomplished.

Does NARFE have any comments on this situation? I don’t want to end up in trouble with the IRS for contributing unqualified money to an IRA.

A

We are not qualified to provide tax advice. However, we are under the impression that money is taxable in the year it is paid, not in the period it represents.

DUES WITHHOLDING CANNOT BE DONE ONLINE

Q

I am a NARFE member and a retired federal employee. I am interested in setting up dues withholding so that my NARFE dues can be taken out on a monthly basis from my federal annuity. Is it possible to do so online, either on the NARFE website or using the Office of Personnel Management (OPM) website Services Online? I don’t see it listed among the eligible organizations on the OPM site.

A

Thank you for your interest in the NARFE dues withholding program. Not only is it convenient, it also comes

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Questions & Answers

NARFE at Your Service with a 15 percent discount for members on their national dues.

It is not possible to sign up for NARFE’s dues withholding program online. The form for dues withholding is available on the NARFE website, www.narfe.org.

Log in as a member, then click on Dues Withholding in the Resource Library on the left of the page.

Save the document to your computer (“save as” command) and fill it out on your computer, or print it and fill it out manually. But in both cases, it must be signed and mailed to NARFE. This is largely for security reasons. (The dues withholding form also appears regularly in narfe magazine.)

With regard to OPM’s Services

Online, you can use it to make voluntary allotments from your annuity to some organizations and financial institutions. Dues withholding for NARFE must originate from Headquarters. This is the case with other organizations as well. The organizations notify OPM when their retiree members want funds withheld and the amounts to be withheld and paid from their annuities.

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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Clip and mail to: NARFE Q&A Book, 606 N. Washington Street, Alexandria, VA 22314 Name___________________________________________________________________ Address _________________________________________________________________

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Navigating Choppy Federal agencies may provide some But is it enough? It’s

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By David Tobenkin

Financial Waters retirement planning and financial literacy information. your ship; take command!

AS EXECUTIVE DIRECTOR OF THE HONOLULU PACIFIC FEDERAL EXECUTIVE BOARD, CHRISTOPHER CONKLIN INTERACTS WITH 125 FEDERAL AGENCIES OR AGENCY SUBUNITS TO ADDRESS FEDERAL ISSUES, including the training of federal employees for retirement. Conklin says in that capacity he frequently encounters federal employees, many nearing retirement, who demonstrate a disturbing lack of knowledge regarding their federal retirement benefits.

“Some are not aware that they are entitled to a pension as a federal employee,” says Conklin. “Some are unsure if they are under the FERS (Federal Employees Retirement System) or the CSRS (Civil Service Retirement System). And some are unaware that under the FERS system, Thrift Savings Plan (TSP) holdings are supposed to represent a large portion of their retirement income.”

Federal employees have a package of retirement benefits and generally

Illustration by Bill Pragluski, Critical Stages, LLC

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Navigating Choppy Financial Waters respectable salaries, but whether that will translate into financial security depends upon the degree to which they can implement good financial planning. Lack of knowledge of any of the areas Conklin cited above, for example, would render good financial planning very difficult.

Federal agencies are mandated by law to provide some retirement planning and financial literacy information to employees. Nonetheless, federal employees may have to be proactive in seeking out financial planning information, as the extent and quality of the training provided by agencies varies significantly. Even at agencies that offer extensive training, there are limits to the degree of personalized financial planning advice they and their consultants will provide. narfe magazine surveyed NARFE members about the financial planning advice they received and their level of confidence regarding their financial decisions. While many federal employees and retirees praised the information they received from their agencies, many others said they received training that was less than adequate to enable them to plan effectively.

The good news is that there is a variety of federal sources of financial planning information that can supplement what agencies provide.

Even then, however, some employees may decide to retain financial advisers to help them navigate choppy financial waters.

Agencies are mandated by law to provide retirement planning and financial literacy information to employees.

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THE CHALLENGE

Good financial planning generally involves creating an approach to saving, use of benefits and spending that allows an employee to meet his or her financial needs. Among the issues that should be considered, according to survey respondents and financial planning experts, include: • How much to save, whether to invest exclusively in the TSP or also in other investments, and how much to invest in different types of assets; • Working out a budget and adjusting it as life circumstances change; • How to plan jointly upon marrying; • Saving for specific life events such as buying a home or sending children to college; • When to retire; • Whether to roll over money from the TSP to an individual retirement account (IRA) or other savings vehicle upon retirement; • Whether to take survivor benefits or life insurance; • The tax implications of various decisions; • A strategy for withdrawing money upon retirement; • Making retirement savings last; and • Estate planning.

“Benefits are the foundation. Employees must understand those before they can address financial planning and then tax planning,” says Tammy Flanagan, senior benefits director for the National Institute of Transition Planning, Inc., who conducts benefits training seminars at many agencies, writes a weekly retirement planning column for Government Executive magazine and hosts the webinars produced by the NARFE Federal Benefits Institute. “An ideal preretirement planning program, for example, would instruct employees on their benefits the first day; address financial planning and tax planning the next day; and estate planning, such as wills and trusts, the third day,” Flanagan says.

THE HOME AGENCY

A 2005 statute, codified at 5 U.S.C. § 8350, requires the Office of Personnel Management (OPM)

to establish a training program for all retirement counselors of federal agencies that is designed to promote fully informed retirement decisions by employees. Agencies must educate employees on the need for retirement savings and investment, and must provide information on how to plan for retirement and how to calculate the retirement investment needed to meet their retirement goals.

“Each agency is responsible for providing direct education and resources to their respective employee groups,” says Kenneth J. Zawodny, Jr., associate director of retirement services at OPM. “OPM provides resources and training opportunities to federal HR professionals to help them meet their agency needs in educating their specific workforce. Each agency is required to submit an annual financial literacy plan to OPM. OPM reviews these plans and provides feedback to the agencies to ensure their plans are meeting the needs of the federal employee population.”

Despite these measures, the Federal Executive Board’s Conklin says large disparities exist in the level and extent of retirement and other financial planning training that is provided by different agencies, an assessment that is echoed by some financial advisers who lecture to federal employees about financial planning at multiple agencies.

And many narfe magazine survey respondents said the financial and retirement training they received from their agencies was lacking.

Ideally, according to several experts, financial training would be given soon after employees commence federal service; at midcareer; five or six years from retirement as serious retirement planning begins; and the year or two prior to retirement to get into the specifics of various key retirement factors and decisions, such as the exact annuity and other post-retirement streams of income to be expected, survivorship annuity decisions, the best month and day to retire, finalization of the employment record, and postretirement spending targets.

One agency’s financial planning training program cited as exemplary by an executive of one of the major federal benefits agencies is that offered

by the U.S. Department of State’s chief learning organization, the Foreign Service Institute (FSI).

“FSI’s Transition Center provides several courses related to retirement planning designed for employees in various stages of their careers,” says a Transition Center representative. “These courses are open to federal employees from any U.S. federal agency. The [Foreign Service Institute or FSI] runs a two-day seminar targeted at early to midcareer employees, and a four-day seminar is open to employees within 10 years of retirement.

Spouses or partners are welcome to attend these courses with their State Department employee spouse or partner.”

Much of the value of agency financial planning training depends upon who is giving the training. Conklin says that at the top are independent financial planners who specialize in such training, who are very knowledgeable regarding the particular needs of federal employees, who provide objective advice, and who have the depth of knowledge and willingness to provide at least some degree of individualized counseling to employees in Q&A sessions during or between program segments. Some agencies have good online programs on their intranets or internet websites, he adds. Conklin and many survey respondents said, in contrast, that some agencies allow training to be provided by financial counselors who are less qualified or who try to cross-sell financial products that are more expensive than TSP offerings and that provide them commissions.

Experts and survey respondents also report a hollowing-out of a traditional ally of federal employees in retirement planning, local agency HR staff, as human resources functions have been centralized in the home office or pushed onto an intranet.

Generally, there also is a limit to the specificity of information that is provided to employees on some financial planning issues, such as investing.

Many agencies do not believe that it is appropriate for them to recommend financial advice that is individualized for a particular employee’s circumstances. The Federal Retirement Thrift

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Navigating Choppy Financial Waters Investment Board (FRTIB), which administers the TSP, advises federal agencies that the vendors they retain to provide retirement counseling should not “make financial recommendations that are specific to an individual employee.” Some financial advisers themselves say they often limit the specificity of information provided in response to questions related to participants’ individual circumstances.

Answering such questions in depth detracts from the time available for general topics intended for the entire audience, they say, and many questions are too broad and complicated to be answered succinctly in these sessions.

KEY GOVERNMENTWIDE BENEFITS OFFICES

Those employees who believe their agencies may be providing insufficient resources or using vendors providing biased advice, and retirees who no longer have access to agency presentations and materials, may need to find supplements or substitutes. That may involve relying more heavily on key federal benefits offices’ information, such as content on the websites of OPM, the Social Security Administration (SSA) and the FRTIB. These agencies have made concerted efforts in recent years to add user-friendly tools and simplified information to help support the financial planning efforts of federal employees and retirees.

OPM. For one-stop retirement planning advice for federal employees, a key tool is OPM’s Federal Ballpark E$timate® tool, available at www.opm. gov/retirement-services/calculators/federal-ballpark-estimator/. The Federal Ballpark E$timate includes projected federal annuity, TSP and SSA benefits to help employees quickly identify approximately how much they need to save to fund a comfortable retirement (the general rule of thumb is that retirement sources of income should add up to 75 to 85 percent of preretirement income, according to OPM). Since March 2014, more than 20,000 people have visited the Federal Ballpark E$timate page, Zawodny says.

OPM also has a considerable number of resources that explain the workings and benefits

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provided by the CSRS and FERS annuities, as well as other aspects of the FERS three-legged stool of retirement benefits: the basic FERS annuity, the TSP and SSA benefits. OPM also provides a list of recommended public financial literacy tools available at www.opm.gov/retirement-services/ benefits-officers-center/#url=Financial-Literacy.

FRTIB: One of the heaviest training lifts is for the FRTIB, given the importance of adequate savings in the TSP to assuring a comfortable retirement for FERS employees. Contribution levels and investment choices depend to a greater extent upon employee decisions than do federal annuity and Social Security benefits. Among the key factors that are stressed in training counseling by that agency to agencies’ HR offices for their employee training efforts are the low costs of the plan, which over time can be a decisive investment advantage; the FRTIB’s status as a fiduciary obligated to act in the best interests of OPM participants and its nonprofit nature; the need for FERS federal employees to contribute 5 percent of income to receive a full match from their home agency; the availability of the plan (without employer contributions) to CSRS employees; and the ability to roll in funds to the TSP from more expensive nongovernmental plans.

One challenge of the TSP is that the investor freedom it provides can lead financially unsophisticated employees and retirees to make poor asset allocations for where they stand relative to retirement, such as simply dividing up investments evenly among the different funds it offers, despite their different holdings and risk profiles. To help provide some guidance, in 2005, the TSP began offering lifecycle funds (L Funds) that employ a combination of the five basic TSP funds and that shift from more aggressive (more stock) to more conservative investments (more bonds and government securities) as retirement approaches.

As noted in a story in the April 2016 issue of narfe magazine (“Closing the TSP Rollover Gap”), the FRTIB has said it soon will request legislation to address an acknowledged shortcoming of the plan: inflexible withdrawal offerings. In addition,

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Navigating Choppy Financial Waters the TSP is considering offering a wider range of mutual fund options for more sophisticated and risk-tolerant investors and personalized online financial advice, though the exact form and start date for these reforms are undetermined, says Kim Weaver, FRTIB director of external affairs.

The FRTIB provides a wide range of educational materials, including YouTube posts on such things as why investment expenses matter, as well as planning tools and calculators at www.tsp.gov/ PlanningTools/index.html.

Social Security. While it no longer mails paper Social Security Statements on an annual basis, the Social Security Administration provides the statements online to anyone who signs up for a my Social Security Account on its website, www. socialsecurity.gov. In 2014, SSA began mailing paper statements to workers attaining ages 25, 30, 35, 40, 45, 50, 55 and 60 and over who aren’t receiving Social Security benefits and who do not yet have a my Social Security account.

SSA also offers several online planners that give an overview of SSA programs, benefits and services. These can be accessed by going to the SSA website, www.socialsecurity.gov, and clicking on “Benefits,” then “Learn.”

SSA also provides a page examining the best age at which to start benefits, citing the factors that should be considered, including employment status, longevity, health, availability of health insurance, eligibility of benefits on another individual’s records, availability of other income, and the eligibility of other family members for benefits on an individual’s record. Find it at https://socialsecurity. gov/planners/retire/otherthings.html.

Additional information is available at www. socialsecurity.gov/pubs/EN-05-10147.pdf. SSA also provides assistance at local SSA offices (https:// secure.ssa.gov/apps6z/FOLO/fo001.jsp) and over the phone (toll-free, 800-772-1213).

THE CHALLENGES THAT REMAIN

Despite the extensive financial benefits and planning information provided by many federal agencies, challenges remain for even generally financially

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well-educated federal employees and retirees. Unless they are very diligent readers or receive particularly thorough federal agency training, they may not be aware of important twists regarding benefits that are relevant to them.

“While agencies may be doing retirement seminars – teaching them about their benefits and options – employees are not getting advice on those benefits and options that is tailored specifically to their circumstances,” says Mark Keen, CFP, a partner at Fairfax, VA-based Keen & Pocock, and a longstanding financial columnist for narfe magazine. “Understanding what your options are is one thing, understanding what to do with those options is another,” Keen says. “I bet if you polled all CSRS employees and asked them about the Voluntary Contribution program [which allows CSRS employees to contribute up to 10 percent of their posttax lifetime earnings to increase the size of their annuities], most would say they didn’t know about it. And of those who do know about it, most don’t know you can use it to funnel hundreds of thousands of dollars into a Roth IRA without incurring additional taxes.”

Key benefits considerations are often discussed by NARFE in narfe magazine and other NARFE publications, on its website and through educational programs such as the webinars produced by the NARFE Federal Benefits Institute.

Tammy Flanagan’s Government Executive columns, which are indexed by topic and are publicly available, also provide valuable advice. The most recent index is available at: www.govexec. com/pay-benefits/retirement-planning/2016/01/ index-2016-edition/125144/.

Some federal employees and retirees, including those who face more complicated financial planning issues or who have an aversion to being proactive in doing their own planning, may decide to get professional help. How to retain a competent and ethical private financial adviser is examined in a story on p. 32.

—DAVID TOBENKIN IS A FREELANCE WRITER BASED IN THE GREATER WASHINGTON, DC, AREA.

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STEADY HAND ON THE WHEEL HOW TO CHOOSE THE RIGHT

FINANCIAL ADVISER

AMONG THE QUESTIONS FEDERAL EMPLOYEES AND RETIREES WILL WANT TO CONSIDER IN THEIR RETIREMENT PLANNING PROCESS is whether it makes sense to use a paid financial adviser to help steer them toward meeting their financial objectives. And, if it does, how do they select an adviser they can trust to keep them on course.

Most career federal employees earn a retirement package that includes a Civil Service Retirement System (CSRS) or Federal Employees Retirement System (FERS) annuity and investments in the Thrift Savings Plan (TSP), which offers low-cost bond and equity fund choices as well as Lifecycle funds with asset allocations that automatically adjust from more aggressive to more conservative as the retirement date approaches. They also receive general benefits guidance provided by many federal agencies (see story, p. 24).

Tammy Flanagan, senior benefits director for the Rockville, Md.-based National Institute of Transition Planning, Inc., which conducts retirement planning workshops and seminars at

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R

By David Tobenkin

federal agencies, says that many feds who are willing to be reasonably proactive in monitoring their finances likely do not need to retain financial advisers to supplement information provided by the government. But for some feds, including those with special considerations, such as an outside business or a large inheritance, such consulting may make sense, Flanagan says.

Others say that with the availability of financial advisers who will charge on an hourly basis, even federal employees who choose to plan and execute their own financial planning strategy would benefit from having someone with expertise in federal retirement and financial planning issues perform at least a quick review of their plans. These experts can make sure the federal employee has addressed key retirement and other challenges that apply to them, has not made false assumptions or omissions, and has considered all available options.

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“Not everyone needs a financial planner, but I do think the default answer to that question would be that it would behoove just about everyone to spend one or two hours to get a checkup, even if it is just for validation that they are doing everything right,” says Dylan Ross, director of communications and financial planning for the Garrett Planning Network, an association of more than 270 independent financial planners who offer hourly consulting to clients, including 23 who specialize in servicing federal employees. “There is great value in knowing you are doing the right thing. But frankly, it’s uncommon that our professionals see an individual who is doing everything they could do to improve their financial situation.

There is almost always something you can do to improve.”

The key caveat, however, is that the financial adviser must be competent, ethical and working on behalf of the client’s best interests – rather than maximizing his or her own financial fees or compensation.

A considerable number of respondents to a narfe magazine survey said they had retained financial advisers. Many praised their planners or brokers as having given them a better understanding and control of their investing, provided an important check on their own decisions, made up for their inability to manage their finances and allowed them to achieve better returns on their investments.

“Looking at the history of our portfolio gives us confidence and peace of mind – our financial adviser takes time to talk with us,” said Louise and Daryl Soles, retired U.S. Postal Service workers who consult a certified financial planner (CFP®), in a joint survey response. “He wants to know when something changes in our lives and tells us how we need to modify our financial planning for best advantage.”

But other survey respondents said that the financial advisers they retained provided costly services that did not advance, and in some cases injured, their financial health.

“We placed some inheritance funds with a private company in 2014 with costs of a percentage of assets managed,” said one respondent.

“They advised us to move all our funds to them.

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them have the inherited funds. We left our other IRA funds and TSP funds where they were.

“After a year, we measured performance of all three places we had investments in and discovered the private broker’s costs had eaten up all the money we made that year. The other two, because they were low-fee investments, made money.” After the year was up, the respondent withdrew the funds from the private broker and reinvested them elsewhere.

FIRST DO NO HARM

Perhaps the greatest dangers in this area are to retain an adviser who charges too much or who steers clients to financial choices that are inferior to those generally available to federal employees and retirees. Financial advisers likely will add to the costs of retirement planning.

They often assess a 1 percent-of-assets-managed fee on top of the administrative, management and transactional costs of funds and investments themselves, or charge significant by-thehour investment fees, which Ross says generally can range from $150 to $250 for Garrett Planning Network advisers.

Some retained advisers may recommend investing some or all funds outside of the TSP. Federal employees or retirees, particularly employees under FERS, who are eligible for a federal match on some funds and who are reliant upon investment portfolio values for a large portion of their postretirement cash flow, should consider carefully the effect of any additional costs over time, including both asset management or other adviser costs and the higher costs for non-TSP investments, before doing so.

The fee cost advantage of TSP funds over many private-sector alternatives is great. TSP equity funds, which track major stock indices, cost an average 29 cents per $1,000 invested.

That is less than a fifth of the fees of Vanguard Group’s Vanguard 500 Index Fund, which is similarly designed to track a major index, in that case, the S&P 500 Index. And it is less than onetwentieth the $6.40 per $1,000 cost of all mutual funds in 2014, as measured by Morningstar, an investment research and management firm.

Those fee differences can add up to large cost savings over time for those in the TSP. A 2013 TSP analysis compared how $50,000 would

An adviser must be competent, ethical and working on behalf of the client’s best interests. grow over 30 years at various fee levels (assuming a 7 percent annual rate of return). It found that those who held the $50,000 in a TSP fund at its 2013 fee level of .027 percent would grow to $377,742, compared to $301,318 for those holding a mutual fund charging the .83 percent average for mutual funds, and $257,842 for a plan charging the 1.38 percent fee level for a fund at the top 10 percent fee level for all funds.

Thus, the difference between an extremely lowfee fund like those of the TSP and a very highfee fund would result in a 32 percent decrease in the portfolio value over that period.

WHAT FINANCIAL ADVISERS CAN DO FOR FEDERAL EMPLOYEES

Financial advisers note that management fees and investment costs are not the only factors to consider in deciding whether to use financial advisers.

“It’s easy to illustrate the market return and then do a simple comparison of investing in inexpensive index funds versus paying someone, say, 1 percent annually, but this fails to illustrate real outcomes,” says Mark Keen, CFP®, a partner at Fairfax, VA-based Keen & Pocock, and a longstanding contributor to narfe magazine. “What would a specific investor, on his or her own, actually have earned over the illustrated time frame? For many, it’s not the market return minus the small expense of the index fund. Many, if not most, investors fail to earn the market return because they either let emotions drive their investment decisions, or they invest by looking in the rearview mirror and, as a result, continually buy and sell at the wrong time. A good adviser will keep clients focused on what’s important and help keep them from making devastating emotion-driven mistakes.”

Many financial planners specialize in servicing more affluent clients, who tend to have more complex financial challenges that can justify seeking ongoing advice. Reston, VA-based financial advising firm ClearLogic Financial, Inc. has five financial planners who serve a client base of roughly 50 percent federal employ-

ees, says ClearLogic President Mark Atherton.

The firm normally will work only with clients who have at least $500,000 in investments to manage, charging a fee of 1 percent or less of assets under management. This client profile has tended to concentrate the firm’s practice in the top 25 percent of federal employees in terms of assets and income.

According to Atherton, there are two primary reasons federal employees pay for his company’s advisers to handle their financial matters. First, they want a holistic, rigorous view of their finances that considers all the facets of their assets and financial challenges and to ensure that they take the right steps at the right time to execute their financial plan. Second, they are seeking tax-efficient distribution planning, namely how much to take out of various accounts (such as TSP or non-TSP assets, or Social Security benefits) and when. Optimizing these decisions can have large tax implications and stretch retirement dollars while providing additional safety margins and peace of mind, Atherton says.

Among the guidance topics that ClearLogic and similar financial advisers provide to federal employee and retiree clients are: •​ Whether to roll over TSP accounts to other accounts and where to invest them if that makes sense; •​ Key benefits decisions, such as whether to enroll in Medicare Part B, whether to take a survivorship benefit for spouses, health insurance and life insurance decisions, and when and how to take Social Security benefits; •​ Retirement distribution planning issues, such as which “bucket” to take money from first (such as Social Security, TSP and other investment assets), to minimize tax bills and maximize lifetime income; •​ Calculations regarding how much retirees can afford to spend to avoid running out of money; • Projections that answer the question “Can I afford to retire now, or should I wait?”; •​ Double-checking agency retirement calcuW W W. N A R F E . O R G

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lations; and •​ Managing a married couple’s assets to maximize their combined portfolios and retirement income.

Increasing numbers of large financial services companies are providing advice and support services designed to help clients beyond those who are high-net-worth individuals. The emergence of “robo” advisers and hybrid services that offer access to advice at a reasonable cost constitute a “revolution” in the field of financial advice, says Melissa Nassar, a principal in Vanguard Retail Investor Group. “These new services are scaling advice with the use of technology and provide varying levels of service for investors who were previously unable to meet the minimum investment required to work with a traditional financial adviser,” Nassar says.

In 2013, Vanguard debuted its Vanguard Personal Adviser Services, a hybrid service that combines technology, online tools and access to a financial planner to provide services such as portfolio construction and ongoing rebalancing, and other financial planning services, at a cost of 0.30 percent on a minimum of $50,000 in assets managed. Other robo advisers include Betterment, Wealthfront, FutureAdviser, and Personal Capital.

SELECTING A FINANCIAL ADVISER

Those considering using a financial adviser should carefully evaluate an adviser’s qualifications, ethical commitments and approach.

The guidelines that the TSP provides to agencies on who should provide such training for agency employees may provide a baseline for qualifications.

“If your provider claims to be a ‘licensed federal benefits coach,’ ‘certified Thrift Savings Plan counselor,’ or something similar, be prepared to investigate,” notes the TSP. “Designations such as these are generally not vetted by any federal entity and may simply be made-up titles. Meaningful professional designations require meeting rigorous education requirements, documented professional experience and a commitment to specific ethical standards. Legitimate professional designations include CFP® (Certified Financial Planner), 36

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ChFC (Chartered Financial Consultant), AFC® (Accredited Financial Counselor) and Certified Employee Benefit Specialist (CEBS).”

Generally, clients should seek advisers who act as fiduciaries to them by ensuring that the advice they provide is in the financial best interests of those counseled, rather than what will maximize the profits of the financial adviser.

Some certifying organizations, such as the CFP Board, require that CFP® professionals act as fiduciaries to clients.

In April, the U.S. Department of Labor (DOL) released a new rule that will require, starting in April 2017, that financial advisers who provide retirement investment advice must act as fiduciaries to clients and either avoid payments that create conflicts of interest or comply with the protective terms of an exemption issued by the Department. But observers say even with the DOL rule, a key question to ask potential financial advisers is whether they will be acting as fiduciaries with respect to the advice they provide.

Another step is to use the free service offered by the Financial Industry Regulatory Authority (FINRA) to investigate the background of an adviser. FINRA is an independent, not-for-profit company authorized by Congress that acts as a self-regulatory organization for the investment industry. FINRA’s brokercheck. finra.org website will show any disciplinary actions against the adviser, the number of years of registration, when they took the required exams and what licenses they have. Further research on financial professionals can be conducted on FINRA’s investor designations database, www.finra.org/investors/ professional-designations. Also helpful is the U.S. Securities and Exchange Commission’s investment adviser public disclosure website, www.adviserinfo.sec.gov/IAPD/Default.aspx.

Finally, experts recommend that feds seek financial advisers with extensive experience serving the needs of the federal community.

Such experience may allow them to go beyond the basics to identify additional opportunities to improve the financial decisions of federal employees.

—DAVID TOBENKIN IS A FREELANCE WRITER BASED IN THE GREATER WASHINGTON, DC, AREA.

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Managing Money

TAXES ON INVESTMENT EARNINGS: PART TWO

T

axes don’t always go down in retirement. Taxdeferred retirement plans, such as the Thrift Savings Plan (TSP) and traditional individual

retirement accounts (IRAs), often play a big role in why that is true. This month, we’ll take a look at the tax rules for retirement plans. And we’ll incorporate what we learned in June’s column and come up with a few tax tips.

When you contribute to a tax-deferred retirement plan, you’re deferring federal and state income taxes on every dollar you contribute. As an added bonus, you also defer the taxes on any investment income as well. As a result, the money you’ve accumulated in your TSP or traditional IRA consists of untaxed income (assuming no nondeductible contributions to the IRA) and untaxed investment earnings.

You don’t get to avoid taxes entirely; you’re simply pushing back the due date of those taxes until the time you take a distribution from the retirement plan. When you do start taking distributions, every dollar distributed will be considered ordinary income and taxed at your marginal tax rate, regardless of the underlying investment or type of investment income generated.

Be smart about where you hold your investments.

You can improve the after-tax return on your investment

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portfolio by using the tax rules on investment income to your advantage. Since your tax-deferred retirement plan distributions will be taxed as ordinary income, use those accounts to hold the investments that would be taxed as ordinary income anyway. For example, these investments would include bonds that generate taxable interest or investments that generate short-term capital gains and nonqualified dividends. You can then allocate more tax-favorable investments, such as those that generate qualified dividends and long-term capital gains, to nonretirement accounts.

Tax-free income does not always produce the highest after-tax income.

When it comes to investing in bonds, tax-free interest may not always yield the highest after-tax return. This is due to the fact that tax-advantaged bonds, such as municipal bonds, generally pay a lower rate of interest than a comparable (similar credit quality

BY MARK A. KEEN,

CFP®

and maturity) taxable bond.

To illustrate this point, at the time of this writing, the average yield on 10-year, AAA rated (the highest credit rating) municipal bonds was 1.26 percent, the yield on 10-year U.S. Treasury bonds was 1.73 percent, and the average yield on 10-year AAA rated corporate bonds was 2.34 percent.

Which one is better? To answer this, simply solve for what’s known as the taxable equivalent yield (TEY) by dividing the tax-advantaged bond yield by one minus your tax rate – include your state tax rate if it’s a municipal bond that’s also exempt from state taxes. Don’t forget U.S. Treasury bonds are exempt from state taxes, so you’ll want to run the calculation for them as well.

Assuming a federal marginal tax rate of 15 percent and a state tax rate of 5 percent, the municipal bond’s TEY is 1.575 percent (assuming exempt from state tax) and the U.S. Treasury Bond’s TEY is 1.82 percent. For someone in a higher federal bracket, say 35 percent, the taxable equivalent yield for the municipal bonds jumps to 2.1 percent.

As you can see, the higher the tax rate, the more attractive the tax-advantaged bond becomes.

Do your homework to ensure you’re getting the highest aftertax return.

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

It’s important to note it’s the bond’s interest that is tax-advantaged. If you sell a bond for a gain, you’ll have to pay federal capital gains tax and state tax if applicable.

Harvest losses … and gains. The upside to an investment that goes south is the ability to sell, realize a loss and use the loss to offset gains elsewhere. If you have more losses than gains, you can use the losses to reduce your

income by up to $3,000 per year.

Investors in the 10 or 15 percent tax brackets also should consider selling appreciated investments, realizing the gain and then rebuying the investment to lock in a higher cost basis. Remember, investors in the 10 and 15 percent brackets don’t pay long-term capital gains tax.

If you sell the investment later on, you’ll have less gain to report (and pay tax on if you’ve moved to a higher tax bracket), or a larger loss, which you can use as noted above.

If all this has your head spinning, don’t worry, even Albert Einstein quipped, “there’s nothing harder to understand than income tax.”

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 Webinar

View Now On-Demand

Upcoming NARFE Federal Benefits Institute Webinar Presented by Tammy Flanagan:

View archived webinars at www.NARFE.org/Institute

5-YEAR COUNTDOWN TO RETIREMENT Thursday, June 30 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.

Exploring TSP Withdrawal Options Claiming Social Security Survivor Benefits: Key Decisions for Feds of All Ages 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!

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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

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39

The Informed Citizen

THE FEDERAL FAMILY IS LARGE, BUT HOW POTENT?

T

he federal family is large: 5,031,022 individuals (see counts by state on the facing page). But whether our collective political impact is waxing or waning is an entirely separate question. Since my August 2014 column titled “Big Numbers, High Expectations,” the number of federal annuitants, the largest contingent of NARFE members, has increased overall because the increase in employee annuitants dwarfs the decrease in survivor annuitants. Looking ahead, a large portion of the federal workforce is retirement-eligible.

Our task during the July and August peak advocacy months and through the November elections is to meet candidates for Congress, the state legislature and governor. When meeting with incumbents or their challengers, provide a copy of The Federal Family chart at right or even more precise numbers for their constituency. Inform policymakers of the modest fixed incomes of federal retirees by using the median annuity amounts shown below. The median is the middle of a range of numbers – half of the annuities are larger, half are smaller – and should not be confused with the average. These monthly income amounts are the most accurate available at press time.

State, County and ZIP Code Counts In addition to our state-by-state federal family snapshot, at right, a large variety of counts are available: • By State: NARFE’s Protect

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America’s Heartbeat Toolkit makes regularly updated federal family counts for each state readily available. The gateway is www.narfe.org/heartbeat.

• By County: Eye on Washington and the Office of Personnel Management (OPM) post 2014 counts of federal employees and retirees by county to their websites. The gateway address is www.eyeonwashington.com/ few_map_2014/.

• By ZIP Code: OPM has provided NARFE with 2015 annuitant counts by five-digit ZIP Code. These counts are available by request; use the contact information at the end of this column.

BY CHRISTOPHER FARRELL LEGISLATIVE REPRESENTATIVE

• Back in time. For comparison purposes, OPM’s FedScope online tool, www.fedscope. opm.gov, has quarterly federal employment counts going back to September 1998. Like all OPM employee data, the count is based on place of employment, not residence.

Two-Edged Sword While NARFE members should use these large numbers to advocate on behalf of the entire federal family, realize this creates high expectations. Lawmakers, told of the impressive size and financial impact of the federal family in their states, must hear from NARFE activists.

Data for All Members The cited websites provide access to valuable information. However, the information is meant to be available to all NARFE members, including those without access to a computer. If you want to obtain counts mentioned here, contact me, using cfarrell@narfe.org or 571-483-1265.

MEAN (AVERAGE) AND MEDIAN (MIDPOINT) MONTHLY ANNUITIES BY SYSTEM BY YEAR

CSRS 2015 FERS 2015 CSRS 2014 FERS 2014 CSRS 2013 FERS 2013 EMPLOYEE MEAN $3,529 $1,355 $3,414 $1,297 $3,303 $1,238 EMPLOYEE MEDIAN 3,066 1,049 2,969 999 2,876 952 SURVIVOR MEAN 1,560 544 1,520 524 1,484 505 SURVIVOR MEDIAN 1,387 420 1,349 404 1,318 390

the federal family Civilian Annuitants, Employees and Postal Employees The chart is a snapshot in time of the federal family. Dates and sources of the data are listed below. Please note, federal and U.S Postal Service (USPS) employee categories are based on place of employment, not residence. Use these numbers in communications with elected officials.

TOTAL

TOTAL MONTHLY ANNUITANTS

ANNUITANTS EMPLOYEE SURVIVOR ANNUITIES FEDERAL USPS AND STATE/AREA ON ROLL* ANNUITANTS* ANNUITANTS* ($000s)* EMPLOYEES** EMPLOYEES*** EMPLOYEES ALABAMA 59,363 46,052 13,311 $150,931 38,027 8,937 106,327 ALASKA 8,250 6,964 1,286 $21,265 10,894 1,560 20,704 ARIZONA 57,514 46,536 10,978 $139,268 31,161 9,606 98,281 ARKANSAS 25,180 19,500 5,680 $52,949 13,170 5,459 43,809 CALIFORNIA 215,506 167,612 47,894 $539,022 139,075 65,836 420,417 COLORADO 51,161 41,688 9,473 $134,699 36,398 10,925 98,484 CONNECTICUT 14,873 11,423 3,450 $35,580 8,014 8,348 31,235 DELAWARE 10,486 8,547 1,939 $30,774 3,020 2,052 15,558 DISTRICT OF COLUMBIA 44,446 36,728 7,718 $156,039 160,780 4,982 210,208 FLORIDA 176,425 140,028 36,397 $450,699 77,376 35,115 288,916 GEORGIA 87,458 69,257 18,201 $216,250 71,077 17,558 176,093 GUAM 2,510 1,691 819 $4,496 2,376 110 4,996 HAWAII 25,291 18,773 6,518 $68,097 22,035 2,338 49,664 IDAHO 15,427 12,736 2,691 $37,373 8,200 2,602 26,229 ILLINOIS 70,238 56,368 13,870 $175,958 41,328 29,557 141,123 INDIANA 37,946 30,259 7,687 $86,513 22,679 12,535 73,160 IOWA 21,464 16,916 4,548 $47,318 8,630 7,917 38,011 KANSAS 25,033 20,017 5,016 $58,640 15,892 6,485 47,410 KENTUCKY 34,024 26,858 7,166 $73,378 22,600 7,756 64,380 LOUISIANA 27,878 22,199 5,679 $64,270 17,863 8,311 54,052 MAINE 14,089 11,049 3,040 $31,785 10,181 3,397 27,667 MARYLAND 163,238 133,403 29,835 $585,570 129,653 13,350 306,241 MASSACHUSETTS 42,376 31,961 10,415 $103,081 24,806 16,470 83,652 MICHIGAN 45,903 37,583 8,320 $110,304 25,459 21,346 92,708 MINNESOTA 30,055 24,020 6,035 $69,510 16,009 12,765 58,829 MISSISSIPPI 25,982 20,262 5,720 $58,684 17,868 4,964 48,814 MISSOURI 55,222 44,393 10,829 $130,418 34,120 15,539 104,881 MONTANA 13,632 11,378 2,254 $33,340 9,082 2,125 24,839 NEBRASKA 13,643 10,672 2,971 $29,864 9,710 4,700 28,053 NEVADA 24,408 20,221 4,187 $61,098 10,674 4,397 39,479 NEW HAMPSHIRE 12,752 10,080 2,672 $32,502 3,782 3,237 19,771 NEW JERSEY 53,968 40,463 13,325 $146,501 20,591 22,113 96,672 NEW MEXICO 28,681 23,349 5,332 $70,895 21,833 3,137 53,651 NEW YORK 95,358 73,960 21,398 $218,374 52,291 45,791 193,440 NORTH CAROLINA 77,546 62,022 15,524 $195,611 43,021 19,180 139,747 NORTH DAKOTA 6,674 5,338 1,336 $14,165 5,469 1,895 14,038 OHIO 76,201 60,043 16,158 $191,012 48,635 23,651 148,487 OKLAHOMA 48,262 37,379 10,883 $109,027 37,125 6,936 92,323 OREGON 34,340 27,834 6,506 $85,804 18,614 6,991 59,945 PENNSYLVANIA 109,765 85,689 24,076 $266,440 59,438 28,973 198,176 PUERTO RICO 11,843 9,226 2,617 $22,510 9,386 2,614 23,843 RHODE ISLAND 7,776 5,616 2,160 $18,141 7,206 2,720 17,702 SOUTH CAROLINA 45,524 35,821 9,703 $108,234 20,228 8,075 73,827 SOUTH DAKOTA 10,912 8,956 1,956 $24,133 8,229 2,047 21,188 TENNESSEE 47,979 38,145 9,834 $113,673 26,320 12,337 86,636 TEXAS 174,684 137,283 37,401 $417,345 112,096 42,367 329,147 US VIRGIN ISLANDS 641 508 133 $1,146 357 166 1,164 UTAH 34,884 27,692 7,192 $85,652 27,029 5,792 67,705 VERMONT 4,596 3,706 890 $10,677 3,274 1,657 9,527 VIRGINIA 144,492 116,403 28,089 $479,729 134,811 16,061 295,364 WASHINGTON 68,793 55,156 13,637 $176,141 53,286 12,320 134,399 WEST VIRGINIA 18,671 15,335 3,336 $45,491 15,051 3,747 37,469 WISCONSIN 28,118 22,740 5,378 $62,163 15,075 11,810 55,003 WYOMING 6,006 5,003 1,003 $13,971 5,550 1,074 12,630 FOREIGN COUNTRIES & TERRITORIES NOT BROKEN OUT ABOVE 24,610 14,535 10,075 $37,593 319 19 24,948 TOTAL 2,612,097 2,067,556 544,541 $6,704,102 2,053,019 631,752 5,031,022 *OFFICE OF PERSONNEL MANAGEMENT, FISCAL YEAR 2015 **OFFICE OF PERSONNEL MANAGEMENT FEDSCOPE, DECEMBER 2015. (THE LOCATIONS OF AN ADDITIONAL 235,309 EMPLOYEES ARE SUPPRESSED FOR SECURITY REASONS. EXCLUDES THE INTELLIGENCE COMMUNITY, FOREIGN SERVICE PERSONNEL AT THE STATE DEPARTMENT, THE JUDICIAL BRANCH, MUCH OF THE LEGISLATIVE BRANCH AND CERTAIN OTHER POSITIONS.) ***U.S. POSTAL SERVICE, MAY 2016 W W W. N A R F E . O R G

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2016

G FUND

F FUND

C FUND

S FUND

I FUND

MAY

0.15%

0.08%

1.80%

1.81%

0.27%

APRIL

0.14%

0.41%

0.39%

1.73%

1.89%

MARCH

0.15%

0.93%

6.79%

8.24%

6.59%

YTD

0.78%

3.63%

3.60%

2.85%

-0.12%

1 YEAR

2.03%

3.41%

1.79%

-5.56%

-9.32%

3 YEAR*

2.13%

3.41%

11.14%

8.40%

2.60%

5 YEAR*

1.94%

3.68%

11.73%

9.22%

2.46%

10 YEAR*

2.82%

5.20%

7.46%

7.78%

2.18%

L INCOME

L 2020

L 2030

L 2040

L 2050

MAY

0.38%

0.69%

0.91%

1.03%

1.15%

APRIL

0.34%

0.58%

0.75%

0.85%

0.95%

MARCH

1.53%

3.35%

4.54%

5.25%

5.94%

YTD

1.35%

1.75%

2.06%

2.20%

2.27%

1 YEAR

1.48%

-0.12%

-0.81%

-1.42%

-2.13%

3 YEAR*

3.62%

5.52%

6.40%

6.97%

7.41%

5 YEAR*

3.63%

5.79%

6.76%

7.39%

7.85%

10 YEAR*

4.02%

5.19%

5.67%

5.94%

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

Increased expectations for interest rate hikes by the Federal Reserve kept the F Fund return subdued in May. The C and S Funds gained on evidence of continued U.S. economic strength and rising earnings in the tech sector.

The I Fund was helped by good returns in Asia and Europe, but hurt by big gains in the U.S. dollar.

All of the L Funds performed as expected and managed gains for the third 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 0.53 percent in April. 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. April’s index, 233.438, is down 0.34 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. April’s index is 1.15 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

2016

For the Record

ALL TSP FUNDS POST GAINS IN MAY; BOND FUND LAGS STOCKS

THRIFT SAVINGS PLAN FUND RETURNS

Claims Received Inventory

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

7,845 6,920 9,862 7,341 6,300 8,374 6,019 4,753 15,423 11,293 5,741 7,241

15,374 14,511 16,455 16,350 14,706 12,642 12,562 11,399 19,761 22,692 19,211 14,517

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

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

79 99 97 98 94 86 98 104 94 96 118 92

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 42

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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

233.438

+0.53

-0.34

MAY JUNE JULY AUGUST SEPTEMBER

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NARFE News

IN TIMES OF TROUBLE

S T R AT E G I C P L A N

PREPARING FOR RENO

A

quick check on the Association’s strategic planning process, leading up to the NARFE National Convention August 28-September 1 in Reno, NV, indicates that NARFE has done much work to prepare the organization to proactively address daunting challenges.

Change-management experts say three criteria are important ones to fold into the planning process: clarity, reducing uncertainty, and benefits. NARFE’s Strategic Planning Committee, Strategic Planning Team, the National Executive Board and National Officers worked diligently for 16 months on a strategic plan, with resulting resolutions, that honors these criteria.

Clarity. Is it clear why the changes are being proposed?

Yes. The Strategic Plan includes a situation analysis, which lays out the circumstances facing the Association, as well as a detailed examination of NARFE’s organization and structure.

Reducing Uncertainty. Would implementing the plan’s recommendations provide more certainty for the Association?

Yes. The plan establishes three objectives for the Association going forward: • Transform governance to be more efficient, effective, agile, consistent and accountable; • Establish a consistent brand to increase awareness, eliminate confusion and convey the value of 44

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NARFE; and • Stabilize and grow membership to support effective advocacy and to deliver financial stability.

It then enumerates key strategies that the Association can take in the next two years to achieve the stated objectives.

Benefits. Are there specific benefits that NARFE will receive from the plan?

Yes. In keeping with the Strategic

As the summer storm season begins, NARFE members should know that the NARFE Disaster Fund offers $500 cash grants to members who have been injured, incurred property damage or have other needs during and after a declared national disaster. To find out more, go to www.narfe.org, log in and click on “Special Programs” on the left side of the page.

per 50 chapter members. Although NARFE prides itself on being a member-directed organization, “in reality, only a small fraction of NARFE members actually participates in the voting process,” the Strategic Plan points out. For example, at the 2014 NARFE National Convention, only 581 members cast ballot votes on bylaw amendments and in elections. “One member, one vote would help ensure that the

NARFE has done much work to prepare the organization to proactively address daunting challenges.

Plan, the National Executive Board has drafted three resolutions that will be considered at the upcoming National Convention. These resolutions would bring about important changes for NARFE. Specifically, they would: • Make NARFE membership more attractive to potential new members by making chapter membership a choice. The current NARFE membership model, which requires chapter membership, is not attractive to baby boomers, who are the primary demographic group from which NARFE will draw its new members, the plan makes clear.

• Enable all members to express their choices on key decisions by adoption of one member, one vote. Currently, delegates cast ballot votes at national conventions on the basis of one vote

voting power of each voter would be equal to that of any other voter,” the plan says.

• Protect the NARFE budget in times of financial stress by authorizing the National Executive Board to raise dues within limits.

Currently, it requires a two-thirds ballot vote at a national convention for approval of any change in national dues. The resolution would enable the Board to raise dues by no more than 10 percent once every two years.

TO READ THE PLAN ...

The NARFE Strategic Plan, supporting documents and multimedia presentations are available online at www.narfe.org. Log in as a member and click on the Strategic Planning banner.

2016 Convention Committees Named

C

ommittees perform important functions at NARFE National Conventions. To comply with Standing Rule V, members appointed to serve on 2016 convention committees are published below. For more convention news, see p. 46.

dore Van Hintum, CO, VC; Timothy Gartner, OH; Gaston Gianni, VA; Philip Kraus, TX; D. Thomas Longo, eChptr; Gary Roundtree, MD; Nicholas Shestople, CA; Stuart Sklamm, MD; Roger Youngman, SD. Credentials: Vivian Nathanson, CA, CH; Joseph Landry, LA, VC; Diana Ballot & Teller: Jimmy Coleman, Diller, OH; Judith Mayora, CA; Sandra GA, Chair (CH); Johanna Caylor, WA, Threadcraft, eChptr.

Vice Chair (VC); Michael Cornelison, Legislation: Pierce Johnson, VA, KY; Deborah Corner, AZ; Donald CH; Louis Bornman, KS, VC; RuthCouzens, MI; Kathleen Freund, OR; ann Couch, OR; George Eads, WA; Virginia Giordano, PA; Clyde GumbRoger Finley, GA; Scott Halstead, MN; mann, AZ; Bonnie Herndon, GA; P. A. Marilyn Khan, HI; Ralph Nelson, TX; Jeffries, MD; Gwendolyn Ketter, KS; Sharon Reese, NM; Thomas Sutor, DE; Eduardo Marrero, FL; Dorothy McWilliam Wayne, MA. Bride-Samuels, OK; V. Ann McCraw, Membership: John Creswell, TX, CA; Anna Pike, ME; Robert Ruskamp, CH; Malin Babcock, AK, VC; Kathy NV; Stephen Saylor, KY; Yvonne Arpa, VA; Huelyn Harper, GA; Jean Terrell, OH; Johnny Thompson, GA; Parke, OH; Stanley Sartain, TX. Betty Warren, VA; Lynda White, GA; Resolutions: Richard GiangerWilliam R. Gary White, IL; Barbara elli, VA, CH; Dorothy Creswell, TX, Wrinkle, AZ. VC; Cindy Renee Blythe, KS; David Life Membership Apl_New Design 3/26/13 3:49 PM Page 1 Bylaws: Robert Allen, NC, CH; Theo- Epstein, AK; Vilma Geisert, eChptr;

Noreene Morgan, KY. Rules: Janette Crawford, NH, CH; Yoggi Riley, CA, VC; Ronnie Castaneda, AZ; Paula Moore, CO; Mary Williams, MT. Secretary: Melinda Atwater, FL, CH; Clifford McCraw, CA, VC. Sergeant at Arms: Donald Wiese, OH, CH; Ronald Larsen, IA, VC; Robert Arthurs, HI; John Bails, VA; Barbara Boomershine, AL; Shirley Coleman, GA; James Crandall, CA; E. Karen Dockter, WY; Malcolm Freund, OR; Lloyd Geisert, eChptr; Doris Katz, NJ; Larry Minniear, TN; Joseph Murone, NJ; Betty Newman, AZ; Joseph Padua, CA; Victor Peterson, AZ; Donald Pierson, MS; Arthur Pike, ME; Randell Self, OH; Marcele Skelton, NM; John Henry Wheeler, DC; Diana Wiest, CA. Timekeeper: Evelyn Seabrook, FL, CH; Constance Bails, VA, VC; Shirley Dewey, AZ; J. Henry Duncan, KY; Margaret Finley, GA; Dee Price, AZ.

NARFE NATIONAL LIFE MEMBERSHIP APPLICATION Life Membership Fee Schedule Ages

Contact Information n Mr. n Mrs. n Miss n Ms. Full Name _____________________________________________ Street Address _________________________________________ Apt./Unit______________________________________________ City _______________________ State _____ ZIP _____________ Phone (__________) ____________________________________ Email_________________________________________________ Date of Birth _________ /_________ /___________________ dd

mm

yyyy

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

Thank you for becoming a National Member for Life. You will receive a membership card, certificate and special lapel pin.

Please allow six weeks for processing. Dues payments & gift contributions to NARFE are not deductible as charitable contributions for income tax purposes.

Single or Quarterly Payment Installments 30-39 $1,796 $450.25 40-50 1,408 353.25 51-55 1,127 283.00 56-60 960 241.25 61-65 801 201.50 66-70 653 164.50 71-75 514 129.75 76-80 392 99.25 81-90 251 64.00 91-100+ 127 33.00

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

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

yyyy

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

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45

CONVENTION Reno Tour Opportunities

N

ARFE’s National Convention is not all business. The Convention Host Committee has organized several optional tours for attendees and their guests.

For those who arrive early, a Virginia City Tour will take place on Friday, August 26. A deluxe airconditioned motor coach will depart the Grand Sierra Resort and Casino, the Convention hotel, at 10 a.m. and return at 3 p.m. The cost is $59.

The itinerary includes some time in Virginia City, a 30-minute train excursion to Gold Hill, a driving tour of Carson City and a stop at the Chocolate Nugget.

Two additional tours are offered for guests: • The Reno-Lake Tahoe Tour will take place on Monday, August 29,

departing the Grand Sierra Resort and Casino at 9 a.m. and returning at 5 p.m. The cost is $69 and includes time in Tahoe City for photos, then around to the east side of Lake Tahoe for some shopping and lunch on your own.

• On Wednesday, August 31, a small bus will depart the Grand Sierra Resort and Casino at 10 a.m. and travel a few miles to the Legend Outlet Mall in Sparks, NV. Each participant will receive an outlet discount coupon book. The cost of the shopping tour is $20. The bus will return to the Grand Sierra Resort and Casino at 2 p.m.

Thank You to Our 2016 NARFE National Convention Sponsors!

REGISTER ONLINE! Convention registration is available 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.

Chapter officers also can go to the website to designate a proxy.

DEADLINES

• Registration: August 1 • Proxy Forms: August 1 46

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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

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

DW-2 (08/12)

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 50

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.

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

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The Way We Worked

SINCE 1918, THE SKY’S THE LIMIT ...

... AS THE MAIL TAKES FLIGHT In this 1930 photo, a U.S. Postal Department employee loads bags of mail into a Ford motor mail passenger plane through a lowered compartment in the wing.

Air Mail service began in 1918, when the Post Office Department borrowed planes and pilots from the War Department. It later used its own planes and pilots, but by 1925, it began contracting air mail routes. Postal Department staff would load the mail into the planes and private company pilots would fly it to its next destination.

PHOTO from the Records of the Post Office Department, 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.

52

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DID YOU KNOW? The U.S. Postal Service (USPS) ceased domestic air mail service in 1977 and international air mail service in 1995 because all mail was being sent by the most expeditious means, regardless of whether the air mail postage rate had been paid. During fiscal year 2015, USPS flew more than 2 billion pounds of mail on multiple air carriers, including cargo carriers and major commercial air carriers.

A

B LL Bu ig -NE tt ge W on r s

s o N ac t r nt Co

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Enough talk. Isn’t it time you found out more about the cell phone that’s changing all the rules? Call now, Jitterbug product

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Available in Red and Graphite.

NEW Jitterbug Flip Cell Phone Call toll-free to get your Jitterbug Flip.

Please mention promotional code 103558.

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We proudly accept the following credit cards:

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www.jitterbugdirect.com

IMPORTANT CONSUMER INFORMATION: Jitterbug is owned by GreatCall, Inc. Your invoices will come from GreatCall. Plans and Services require purchase of a Jitterbug phone and a one-time setup fee of $35. Monthly fees do not include government taxes or assessment surcharges and are subject to change. Coverage is not available everywhere. 5Star or 9-1-1 calls can only be made when cellular service is available. 1We will refund the full price of the Jitterbug phone and the activation fee (or setup fee) if it is returned within 30 days of purchase in like-new condition. We will also refund your first monthly service charge if you have less than 30 minutes of usage. If you have more than 30 minutes of usage, a per minute charge of 35 cents will be deducted from your refund for each minute over 30 minutes. You will be charged a $10 restocking fee. The shipping charges are not refundable. There are no additional fees to call GreatCall’s U.S.-based customer service. However, for calls to a GreatCall Operator in which a service is completed, you will be charged 99 cents per call, and minutes will be deducted from your monthly rate plan balance equal to the length of the call and any call connected by the Operator. Jitterbug and GreatCall are registered trademarks of GreatCall, Inc. ©2016 GreatCall, Inc. ©2016 firstSTREET for Boomers and Beyond, Inc.

Reg. 39.99 Dr. Scholl’s is a registered trademark of MSD Consumer Care, Inc. © 2016 MSD Consumer Care, Inc. All rights reserved.

MagicCling™ is a registered trademark of Haband®.

Soft padded microsuede insole

Stitched-in arch support

Shock-absorbing foam Heel cushion

Breathable perforated sock & insole

Layers of fabric for excellent flexibility Steel arch support

Cooling air tunnels

EVA heel insert absorbs shock Lightweight flexible TPR outsole

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D Widths: 7 7 ⁄2 8 8 1⁄2 9 9 1⁄2 10 10 1⁄2 11 12 13 14 *EEE Widths ($5 more per pair): 71⁄2 8 8 1⁄2 9 9 1⁄2 10 10 1⁄2 11 12 13 14

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WHAT WHAT HOW SIZE? WIDTH? MANY?

When you pay by check, you authorize us to use information from your check to clear it electronically. Funds may be withdrawn from your account as soon as the same day we receive your payment, and you will not receive your check back from your financial institution.

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