September 2013 NARFE Magazine

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P.36

two views on social security reform

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retiree relocation: finding a place To call home

COVER STORY

don’t take the bait!

‘Pension Advance’ Offers Lure Annuitants P.30

Volume 89 • Number 09

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WashingTon Watch

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You Sent the Coupons; Now, Make the Calls

9

“Call Congress Week” Phoning Instructions

9

What Would You Lose Under the Chained CPI?

10 Budget Update: Search for Common Ground

12 House Committee Reviews Workers’ Comp Proposals

14 OPM’s Advice on Benefits for Same-Sex Couples

16 House Hearing Examines Proposed CFC Changes

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18 NARFE Bill Tracker 20 House Panel Approves Postal Reform Bill

Cover Story don’t take the bait. Some financial firms are offering retirees unconventional, sometimes illegal, “pension advance” products.

Congress and some states are investigating. Be aware!

Columns

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From the President

48 Managing Money 50 The Informed Citizen 51 Alzheimer’s Update

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Point, Counterpoint. We asked two policy experts to weigh in on the status of the Social Security Trust Fund. Let the debate begin.

DEPARTMENTS

22 Questions & Answers 52 For the Record: TSP

Investments, COLA Chart

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On the Web

54 NARFE News P.36

TWO VIEWS ON SOCIAL SECURITY REFORM

visit us online at:

www.narfe.org

P.42

RETIREE RELOCATION: FINDING A PLACE TO CALL HOME

COVER STORY

like us on facebook:

NARFE National Headquarters follow us on twitter:

@narfehq

DON’T TAKE THE BAIT! ‘Pension Advance’ Offers Lure Annuitants P.30

60 The Way We Worked special section

42 Where to Retire

ON THE COVER

Illustration by Bill Pragluski, Critical Stages, LLC

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september 2013 | Volume 89 | Number 09

Editor Margaret M. Carter Assistant Editor Ken Fanelli Editorial Administrator Toni Vallario Graphic Design Charlene Gridley Editorial Board Joseph A. Beaudoin, Paul H. Carew, Elaine C. Hughes, Richard G. Thissen 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 725, 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 Tape: Issues of narfe magazine are also available on cassette through the National Library Service for the Blind and Physically Handicapped. To find out about availability in your area, call 800-424-8567 and ask for the Reference Section.

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

National Active and Retired Federal Employees Association NATIONAL OFFICERS JOSEPH A. BEAUDOIN, President; natpres@narfe.org PAUL H. CAREW, Vice President; natvp@narfe.org ELAINE C. HUGHES, Secretary; natsec@narfe.org RICHARD G. THISSEN, Treasurer; nattreas@narfe.org

REGIONAL VICE PRESIDENTS

REGION I Arthur Pike (Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont) Tel: 207-764-4468 Email: artpike1937@aol.com REGION II Evelyn Kirby (Delaware, District of Columbia, Maryland, New Jersey and Pennsylvania) Tel: 410-604-1141 Email: ekirby@atlanticbb.net REGION III Donald Stewart (Alabama, Florida, Georgia, Mississippi, Puerto Rico, South Carolina and Virgin Islands) Tel: 305-442-6388 Email: dejs33149@aol.com REGION IV Paul E. Johnson (Illinois, Indiana, Michigan, Ohio and Wisconsin) Tel: 812-306-5137 Email: pejohnson@tds.net REGION V Carol R. Ek (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota) Tel: 620-241-1131 Email: ek617@att.net

Here’s How to Contact Us… If you want to:

Join NARFE Call (toll-free): 800-627-3394 or go to: www.narfe.org Change or update your membership record Call (toll-free): 800-456-8410 Email: memberrecords@narfe.org

REGION VI Jerome S. Smith (Arkansas, Louisiana, Oklahoma, Republic of Panama and Texas) Tel: 903-534-5849 Email: retiredjer@aol.com REGION VII Frank Impinna (Arizona, Colorado, New Mexico, Utah and Wyoming) Tel: 303-482-1747 Email: impinna@gmail.com REGION VIII Helen L. Zajac (California, Guam, Hawaii, Nevada and Republic of Philippines) Tel: 707-644-7565 Email: hlz17@aol.com REGION IX Lanny G. Ross (Alaska, Idaho, Montana, Oregon and Washington) Tel: 360-692-9741 Email: lannyjean@comcast.net REGION X William F. Martin (Kentucky, North Carolina, Tennessee, Virginia and West Virginia) Tel: 540-872-3345 Email: billmartin@narferx.org

For any other NARFE matter:

Call NARFE Headquarters: 703-838-7760 Email: hq@narfe.org Fax: 703-838-7785 Write: NARFE 606 N. Washington St. Alexandria, VA 22314

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 © 2013, 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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“WOW!” You are cordially invited to RETHINK PINK with the $59 Palos Ring!

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OW! That's what they said last year when the 12-carat "Pink Martian" diamond sold for $17.4 million. They said it again this year when the 34-carat pink “Princie Diamond” fetched an amazing $39 million at auction. "WOW!" has become the official exclamation of stunning pink stones.

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Please mention this code when you call.

Smart Luxuries—Surprising Prices™

From the President

Your benefits are at stake

N

one of us would hesitate to pick up the phone and dial 911 in the case of a medical emergency. I am asking

you to pick up the phone this month and make three calls to help avoid a financial calamity that could affect you now or in the future.

If Congress adopts the so-called Chained CPI to calculate annual cost-of-living adjustments to federal annuities and Social Security benefits, it would mean thousands of dollars in lost income for seniors. And it won’t just affect those already collecting benefits; it will reduce the income of everyone who qualifies for benefits in the future.

The week of September 16-20 is “NARFE National Call Congress Week.” Your Association is asking you to make phone calls to the offices of your members of Congress – one to the House,

two to the Senate. We provide detailed instructions and a suggested script on p. 9.

When you make these calls, expect to talk to a staff person in the congressional office. Staff members will relate the calls and your opinions to their bosses. If you want a written response from your representative and senators, ask for one. You don’t have to have a computer to participate, just a phone. If legislators don’t hear from you, they won’t know you have strong views on the issue. It’s a fiscal emergency; please call.

NARFE serves as a legislative watchdog, protecting your interests on Capitol Hill. We also sound the alarm when a threat arises elsewhere.

Our cover story is a cautionary tale about safeguarding your benefits. Read our story and then read the fine print before you think about surrendering your annuity for fast cash.

In other news, I traveled to Boston in July and accepted a prestigious new award recognizing NARFE’s record of giving to Alzheimer’s research. The inaugural Jerome H. Stone Philanthropy Award for Alzheimer’s Research was presented to the Zenith Society, a group of 57 major donors to Alzheimer’s research, including NARFE. NARFE members are the true recipients of the award. Thank you, and congratulations!

Joseph A. Beaudoin NARFE national President natpres@narfe.org

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SWITCH AND SAVE ON HEAR PHONAK S SMART III COST Ex AMPlE

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All appointments must be scheduled through TruHearing. MemberPlus Membership fee waived * Price shown does not include cost of comprehensive hearing exam. Examination §The Service Benefit Plan will pay a hearing aid benefit up to $2,500 total every 3 calendar years and testing for fitting of hearing aids is covered under the Service Benefit Plan. The for adults age 22 and over, and up to $2,500 total per calendar year for members up to age Insured may need to submit for reimbursement. Service Benefit Plan members get 22. Do not rely on this communication piece alone for complete benefit information. All benefits the TruHearing MemberPlus membership fee waived through December 31, 2014. are subject to the definitions, limitations, and exclusions in your Service Benefit Plan brochure. The $108 is the regular yearly cost for the TruHearing MemberPlus membership. Must be Blue365Ž Discount Program offers access to savings on items that you may purchase directly from a Service Benefit Plan member to access TruHearing MemberPlus discounted pricing. independent vendors, which may be different from items covered under your Service Benefit Plan or State and local taxes and/or fees may apply. Prices and products subject to change. 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 The Blue Cross and Blue Shield Association is an association of independent, locally operated Blue Cross and Blue Shield Plans.

TO BlUE GREEN ING AIDS. 0 2,190

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With over 90 models from 5 leading manufacturers, dozens of top models are available for $0 out of pocket. First, become a Service Benefit Plan member. Then, to take advantage of these savings enroll in the TruHearing MemberPlus program for free by calling (877) 360-2432 M–F, 8am to 8pm Central. You can also enroll online at TruHearing.com/enroll and use group number HP2R-A365. TruHearing is an independent company providing discounts on hearing aids.

through 12/31/2014 (a $108 value). under your policy, contact the Service Benefit Plan. The products and services described herein are neither offered nor guaranteed under any local Blue company’s contract with the Medicare program.

In addition, these items are not subject to the Medicare appeal process. Any disputes regarding these products and services are not subject to the Service Benefit Plan’s Disputed Claims process. Blue Cross 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.

Washington Watch

You sent the coupons; Now, make the calls

C

ongress returns to Washington after Labor Day to continue negotiations over the fiscal year 2014 budget, sequestration and the debt ceiling. A likely part of that conversation will

be the Chained CPI. The proposed move from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to the Chained CPI for the purposes of determining annual cost-ofliving adjustments (COLAs) in Social Security benefits and federal annuities, among other things, would result in lower COLAs and hurt seniors already facing increasing costs.

“Hailed by many in Congress as a ‘technical adjustment’ to increase the solvency of Social Security, the Chained CPI is nothing more than a decrease in benefits for America’s seniors, veterans and disabled,” said NARFE President Joseph A. Beaudoin.

“After 30 years under the Chained CPI, a retiree would see nearly 10 percent less in benefits.”

NARFE has designated the week of September 16 as “NARFE National Call Congress Week.”

The Association is asking each member to help in the fight to oppose the Chained CPI by contacting his or her representative and senators during the week. Retir-

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ees will be defending their current benefits; active federal employees will be defending their future benefits. A switch to the Chained CPI ultimately will have an impact on anyone who receives, or who will receive, a federal annuity, military retired pay, Social Security, or veterans or disability insurance benefits.

NARFE estimates that the average Civil Service Retirement System annuitant would lose $48,000 over the course of a 25-year retirement under the Chained CPI. (See chart on p. 9, or use NARFE’s online calculator to estimate how the proposal would reduce your earned federal

Jason Freeman, legislative staff assistant, opens envelopes and tallies the thousands of coupons clipped by members for NARFE’s coupon campaign.

annuity and share that figure with your legislators. The calculator is available at www.narfe.org/ legislation/calculator.cfm.)

Over the course of the summer, NARFE collected $48,000 worth of coupons for a September media push. NARFE-member calls to Capitol Hill during the week of September 16 will echo that message. These phone calls are vital to NARFE’s success in preventing a switch to the Chained CPI. See the instructions on page 9 on how to make the calls.

“NARFE is extremely grateful to all of the members who took the time, made the effort and paid the postage to clip and send their unused coupons,” said Beaudoin.

“The campaign clearly showed the generosity and tenacity of NARFE members. The coupons undoubtedly will create a visual image that many will not soon forget. Thank you for your help in ensuring the success of our media campaign highlighting the negative effects of the Chained CPI.” —By Sarah Weissmann, Grass-Roots Program Manager

‘CALL CONGRESS WEEK’ PHONING INSTRUCTIONS

C

alling Capitol Hill is easy and takes only a few minutes. It is a powerful way to protect your earned benefits. Follow these simple instructions and call the week of September 16-20: Step 1: Call the Capitol using NARFE’s toll-free number, 866220-0044. Ask the operator to connect you to your representative’s office. If the toll-free number is busy, please dial the Capitol switchboard at 202-224-3121. You also can find the direct number for your representative and senators on their websites using www.house. gov or www.senate.gov.

Step 2: Politely greet the staff person who answers the phone.

Give your name and address so the staff member knows you are a

constituent. Then say: • I am a retired/active federal employee and member of NARFE. In my job/Before I retired, I… [tell the staff person a little about your work].

• [Senator or Representative X] represents thousands of federal workers and retirees. As Congress debates the budget, I urge him/ her to oppose a switch to the Chained CPI to determine annual COLAs to Social Security benefits, federal civilian annuities, military retired pay, veterans’ benefits and disability insurance benefits.

• The Chained CPI does not account for how much seniors spend on medical care. Over the next 25 years, I could lose thousands of dollars in reduced COLAs, money that

is meant to maintain my spending power without hurting my retirement.

• Please oppose any effort to move to the Chained CPI. Thank you for your consideration of my viewpoints.

Step 3: Call the Capitol again using NARFE’s toll-free number, 866-220-0044. Ask the operator to connect you to the office of one of your senators and repeat the message you delivered to your representative’s office. Repeat for your state’s second senator.

Please ask your family, friends, neighbors, and fellow federal employees and retirees to join you in calling Congress. Members of Congress will be hearing from constituents on both sides of this issue, and it is vital that they hear from NARFE members in opposition to the Chained CPI. —By Sarah Weissmann, Grass-Roots Program Manager

How Much Would you lose under the Chained CPI? A switch to the Chained CPI from the CPI-W would reduce COLAs by an estimated 0.3 percent per year. Because the Chained CPI compounds over time, it would hit hardest those who live the longest and individuals who rely on benefits for a longer period of time. The chart below provides the total amount of benefits lost at five-year intervals. To see how moving to the Chained CPI would affect you personally, go to www.narfe.org and click on the “Chained CPI Calculator” in the graphic carousel.

Annual ANNUITY

$15,000

$30,000

$45,000

$60,000

$75,000

cumulative losses under chained CPI 5 years $728 $1,456 $2,184 $2,912 $3,640

10 years $2,936 $5,873 $8,809 $11,746 $14,682

15 years $7,056 $14,111 $21,167 $28,223 $35,278

20 years $13,612 $27,224 $40,836 $54,448 $68,060

25 years $23,248 $46,495 $69,743 $92,991 $116,239

30 years $36,743 $73,486 $110,229 $146,972 $183,715

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Washington Watch

Budget update: Search for common ground

W

hen Congress returned from its Independence Day recess, high on the legislative agenda was action on the fiscal year (FY) 2014 appropriations bills to keep

the operations of government agencies and programs running when the fiscal year begins on October 1. But finding common ground on the annual appropriations bills is proving to be tough sledding.

The goal is for Congress to pass, and the president to sign into law, 12 annual appropriations (spending) bills to fund functions of government, from supporting our military effort at home and abroad, to conducting medical research at government and government-contracted facilities, to caring for the veterans among us who may have been injured in their defense of the nation.

This year’s funding levels were the result of the “fiscal cliff” dealmotivated Budget Control Act. That law provided for sequestration – automatic across-the-board spending cuts – if Congress was unable to come up with a better way to cut the federal deficit by $1.2 trillion over 10 years.

As we know, Congress was unable to reach an agreement, and sequestration took effect for FY 2013. This curtailed some government services and brought about the furlough of federal employees for as many as 11 workdays this year.

Under the Budget Control Act, the threat of sequestration lasts 10 years – until FY 2022. Therefore, if Congress again fails to agree on a deficit-reduction plan, acrossthe-board spending cuts would take place in FY 2014.

To avoid a governmentwide staffing and service nightmare in 10

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FY 2014, the House and Senate Appropriations Committees have approached their work from two substantially different viewpoints.

The Senate Appropriations Committee, on a June 20 partyline vote, agreed to fund defense and nondefense programs at a level of $1.058 trillion. That level is $91 billion higher than sequestration levels and is consistent with the earlier-passed Senate Budget Resolution (and President Obama’s FY 2014 budget proposal), which would replace sequestration’s automatic spending cuts with deficit reduction achieved through other spending reductions (outside the appropriations process) and higher revenues.

By contrast, the House Appropriations Committee proposed an alternative to sequestration as laid out in the Budget Control Act, which set caps for defense and nondefense spending. The House Committee would shift approximately $47 billion from nondefense to defense accounts.

By late July, when this issue went to press, only four of the 12 FY 2014 funding measures had passed the House. Another three were scheduled to be considered by the House prior to the planned August 3 start to the traditional August/ Labor Day break away from Wash-

ington. The full Senate had not acted on any appropriations bills.

The limited number of days in which the House and Senate will be in session prior to October 1 provides an obstacle to completing action on the remaining bills before the beginning of the new fiscal year. But the real hurdle to getting the job done is the current difference between the Senate and House Appropriations Committees’ approaches in crafting their 12 bills.

While the effort continues on Capitol Hill to agree on spending bills before the beginning of the fiscal year on October 1, still to come is the necessity to reach a deal on the debt-limit spending ceiling in October or November to avoid a government shutdown.

—By Alan Lopatin, legislative counsel

MYTH vs.

REALITY Myth: Most federal employees work for social programs addressing health, education and welfare.

Reality: Two-thirds (66.5 percent) of federal employees work for the Departments of Defense, Veterans Affairs and Homeland Security, protecting our country and supporting our military.

Discover a YMT Vacation with other NARFE Members!

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Departs: May 27; June 17; & July 22, 2014 Explore the beauty and history of majestic Alaska. Enjoy a seven night Alaska cruise on the NCL Jewel through the scenic Inside Passage. Visit Ketchikan, “The Salmon Capital of the World;” Juneau, the capital of Alaska; Sawyer Glacier, that calves constantly, shedding huge chunks of ice with incredible colors; Skagway, where the Gold Rush began and Victoria, BC, Canada’s Garden City on Vancouver Island.

Sightseeing tours in Seattle including Pike’s Place Market & San Francisco with opportunities to see the Golden Gate Bridge and Fisherman’s Wharf. Plus world famous Sonoma Valley where you will visit one of the area’s premier wineries.

Scenic Amtrak Coast Starlight train trip from San Francisco to Seatte. Relax in your Amtrak sleeper-roomette at night (includes VIP lounge). * Per person, based on double occupancy. Price based on inside cabin, upgrades available. Plus $299 tax/service/government fees.

Add $200 for June 17 departute date and $300 for July 22 departure date. Alternate departure dates available in 2014. Seasonal rates may apply. Airfare is extra.

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Departs: March 20, 2014 Fly into the historic city of Rome. Explore this Eternal City with sightseeing that includes the Colosseum, Basilica Santa Maria Maggiore, The Vatican City and Sistine Chapel. Travel North to the ancient town of Orvieto followed by Montecatini Terme, Florence and Pisa where you will see the Leaning Tower of Pisa. Continue Northeast to Bologna, a city probably best known for its worldrenowned culinary tradition and the amazing city of Venice, with a sightseeing tour where you will see the Grand Canal. You will then head to Verona, best known as the setting for Shakespeare’s Romeo and Juliet; Lake Garda, Italy’s largest lake and Lake Maggiore, with an included scenic lake cruise. Your journey concludes in Milan, with highlights including the Piazza del Duomo and La Scala Opera House. *Includes nine breakfasts and six dinners. * Price per person, based on double occupancy. Plus $299 tax/ service/government fees. Alternate departure dates available in 2014. Airfare is extra.

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Washington Watch

House Committee Reviews Workers’ Comp Proposals

M

ost federal workers who tion benefits at retirement age have been injured on and eliminating supplemental the job would receive compensation for injured workers substantially less under the Fedwith dependents. eral Employees’ Compensation NARFE opposes the DOL Act (FECA) if reforms proposed proposal and similar proposals by the Department of Labor are authored by Sen. Susan Collins, enacted, according to a GovernR-ME, as part of postal reform legislation that passed the Senate ment Accountability Office (GAO) during the last Congress. report. The report (GAO-13-08) At the July 13 hearing before the was reviewed at a recent hearing Subcommittee on Workforce Proby a subcommittee of the House tection, members on both sides of Education and the Workforce the aisle questioned the fairness Committee. to workers of DOL’s proposals in The Department of Labor (DOL) light of the GAO findings. has proposed reducing federal In thePMlastPage Congress, the House employee workers’ compensa2013-14_PAC_Coupon:2013 Coupon 3/26/13 3:42 1

passed, with bipartisan support, a bill that provided common-sense FECA reforms that would achieve cost savings for taxpayers by reducing fraud and improper payments while improving fairness for disabled workers.

NARFE supports the bipartisan path of FECA reform thus far taken by the House, focusing on program integrity rather than threatening the adequacy of benefits. It submitted testimony for the hearing record detailing the Association’s position. It is available at www.narfe.org.

—By John Hatton, Deputy Legislative Director

NARFE-PAC CONTRIBUTION FORM Name:______________________________________ NARFE Member Number: _______________________ I would like to make a one-time contribution of: $100 Gold (qualifies for Gold 2013-14 NARFE-PAC lapel pin and a blue NARFE-PAC LEADER hat)

$50 Silver (qualifies for Silver 2013-2014 NARFE-PAC lapel pin) $20 Basic (qualifies for Basic 2013-2014 NARFE-PAC lapel pin) Other: ______ -orI would like to be a Sustainer and make a monthly credit card contribution to NARFE-PAC of: $25/month $10/month

Please find my check or money order enclosed payable to NARFE-PAC Please charge to my credit card (required for monthly contribution) Credit Card Information Type: MasterCard Visa Discover AMEX Card #: ________________________________ Expiration Date: ____ / ____ Name on Card:__________________________ Signature: ______________________________ Date: __________________________________

Other: ______/month (minimum of $10) Monthly contributions qualify you to receive a NARFE-PAC Sustainer lapel pin along with a blue NARFE-PAC LEADER hat.

I do not want to receive any gifts for my contribution marked above.

Mail to: National Active and Retired Federal Employees Association Attn: NARFE-PAC 606 North Washington St. | Alexandria, VA 22314

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

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Washington Watch

OPM’s Advice on benefits for same-sex couples

O

n June 26, the U.S. Supreme Court declared unconstitutional a key provision of the 1996 Defense of Marriage Act (DOMA). The high

court’s ruling gives legally married same-sex couples eligibility for the same federal benefits afforded to heterosexual couples. Following the decision, the Office of Personnel Management (OPM) lost no time in providing information and guidance on how to include coverage for the newly qualified dependents in a number of federal benefits programs. Here is a summary of OPM’s guidance:

SURVIVOR ANNUITIES All federal retirees in a legal same-sex marriage have two years to inform OPM that they have a current legal marriage that qualifies for recognition and make a survivor annuity election to their retirement benefits. Information for retirees about changing retirement benefits will be coming in the near future.

Federal employees may now elect a Civil Service Retirement System (CSRS) or Federal Employees Retirement System (FERS) survivor annuity for a same-sex spouse when they apply for retirement.

HEALTH INSURANCE BENEFITS OPM is allowing enrollment and election changes using the date of the Supreme Court’s ruling, June 26, 2013, as a change in family status “event.” In line with already established procedures, OPM is providing employees and retirees the opportunity to make changes within 60 days after this qualifying event. After the 60-day period is up, on August 26, 2013, 14

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enrollees will have to wait for the upcoming Federal Benefits Open Season, which begins November 11, to make enrollment and election changes. Here are the specifics for these programs: • Federal Employees Health Benefits Program (FEHBP): Employees and retirees will be given an immediate opportunity to make a change in their FEHBP coverage to add same-sex spouses as eligible family members. The children of same-sex marriages are also eligible dependents.

Employees and annuitants enrolled in a self-only option who wish to change to a family option to cover same-sex spouses and children of the marriage can do so between June 26 and August 26, 2013, or at the next annual Federal Benefits Open Season, which begins November 11.

For both employees and retirees, a completed form SF 2809, along with a copy of the marriage certificate, will be necessary. This form can be viewed, completed and printed from OPM’s website (www.opm.gov/forms/standardforms/).

• Federal Dental and Vision Insurance Program (FEDVIP): Similar to the changes to FEHBP coverage, all legally married same-sex spouses are now eligible family members under FEDVIP for family or selfplus-one enrollment.

Enrollees can call BENEFEDS at 877-888-3337 between June 26 and August 26, 2013, to change their enrollment, or wait until the next Federal Benefits Open Season, which begins November 11.

FEDERAL EMPLOYEES’ GROUP LIFE INSURANCE PROGRAM (FEGLI) Family Option C under FEGLI will cover legal same-sex spouses and children of legal same-sex marriages as family members.

OPM has given federal employees until August 26, 2013, to make changes to their FEGLI enrollment.

FEDERAL FLEXIBLE SPENDING ACCOUNT PROGRAM (FSAFEDS) Federal employees who are in a legal same-sex marriage can enroll in, or can increase their coverage amount in, a FSAFEDS account to cover claims submitted for eligible expenses for their same-sex spouses and newly eligible children. To do so, employees must contact FSAFEDs at www.fsafeds.gov, call 877-3723337 or email FSAFEDS@SHPS. com. (Retirees are not eligible for flexible spending accounts.)

—By David Snell, federal benefits service director

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Washington Watch

House Hearing Examines Proposed CFC chanGes

P

lanned changes to the Combined Federal Campaign (CFC), the world’s largest annual workplace charity campaign, were examined at a recent

House Oversight and Government Reform subcommittee hearing. The Office of Personnel Management (OPM) proposed the changes based on recommendations issued by the CFC-50 Commission. OPM created the commission in 2011, the campaign’s 50th anniversary year, to find new ways to increase “the CFC’s accessibility, accountability, transparency and affordability.” NARFE President Joseph A. Beaudoin was a member of the commission.

Although the CFC has raised more than $7 billion for some 24,000 charities since 1961, total donations dropped from about $272 million in 2010 to $258 million in 2012; 2011 was the first time contributions decreased from the previous year in the campaign’s history. More than 37 percent of donors in the past decade have “walked away from the program,” Mark Lambert, OPM associate director for Merit Systems Accountability and Compliance, told the Subcommittee on Federal Workforce, U.S. Postal Service and the Census.

While the proposed changes are an attempt to revitalize the program, Subcommittee Ranking Member Stephen F. Lynch, D-MA, said the decline in donations could be a result of the continuing pay freeze and threats of furloughs that federal employees face.

OPM’s plan to reduce local control and oversight of the program, in favor of regional control and oversight, drew objections from 16

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CFC charities. OPM says this would eliminate redundant campaign administration functions by consolidating them. But representatives of several charities claimed it would reduce the person-to-

gether. The CFC-50 Commission did not recommend eliminating any giving options.

A proposal based, in part, on the recommendations of the CFC-50 Commission would expand solicitations to include federal retirees. Currently, federal retirees cannot contribute to the CFC. The CFC-50 Commission recommended allowing retirees to donate regularly through their monthly annuity payment. However, OPM’s proposed rules would only allow retirees to make an electronic contribution during the CFC’s open season.

OPM stated that it is still reviewing comments from the draft regulations that were released in April.

OPM also said that these regu-

A proposal based on the recommendations of the CFC-50 Commission would expand solicitations to include federal retirees. person nature of the campaign and the strong sense of ownership that federal employees currently take in the campaign. The idea of regional control and oversight was not recommended by the CFC-50 Commission.

OPM also wants to eliminate cash, check and money order donations and move entirely to electronic donations. While OPM’s Lambert said that only about $20 million of the $258 million raised by the CFC in 2012 came from cash or paper checks, other witnesses at the hearing stated that it would be a mistake to eliminate traditional means of giving alto-

lations are meant to be a general framework for the CFC, and the details and new procedures for the campaign will come later.

Members of the subcommittee were concerned that changes to the CFC could result in fewer total donations and fewer charities joining the program. They stressed the importance of the campaign and charitable nature of federal employees. They also said it was important to hear from charities and to make sure any proposed changes by OPM are well thought out before being enacted.

—By Jason Freeman, Legislative Staff Assistant

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Washington Watch

narfe bill tracker The NARFE bill TRACKER is your monthly guide to the congressional legislation that NARFE is following. Check back each issue for updates.

ISSUE

Bill Number / Name / What Bill Would Do Sponsor H.R. 26: Deferred Benefits Adjustment Act of 2013 / Rep. Nydia M. Velázquez, D-NY Cosponsors: None

DEFERRED ANNUITIES

H.R. 249: Federal Employee Tax Accountability Act of 2013 / Rep. Jason Chaffetz, R-UT Tax Delinquency

Paid Parental Leave

Retirement Calculations/ Contributions

18

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Cosponsors: None

H.R. 517: To provide that four of the 12 weeks of parental leave made available to a federal employee shall be paid leave / Rep. Carolyn B. Maloney, D-NY Cosponsors: 16 (D)

H. Con. Res. 25: Fiscal year 2014 Budget Resolution / Rep. Paul D. Ryan, R-WI

Latest Congressional Action(s)

Provides for the indexation of deferred annuities, including survivor annuities, and for individuals becoming subject to the Federal Employees Retirement System by election. Terminates the entitlement of a survivor who remarries before age 55 (currently, who remarries at any age) to an annuity based on the service of a deferred annuitant who dies before establishing a valid claim for a Civil Service Retirement System annuity.

Referred to the House Committee on Oversight and Government Reform

Makes any person who has a “seriously delinquent tax debt” (an outstanding tax debt for which a notice of lien has been filed in public records) ineligible for federal employment or to continue serving as a federal employee.

Approved by the House Committee on Oversight and Government Reform on 3/20/13 Failed to pass the House on 4/15/13

narfe, April, p. 9

narfe, July, p. 11

Allows federal employReferred to the House ees to substitute any Committee on Oversight and available paid leave Government Reform for any leave without pay available for either the birth of a child or placement of a child with the employee for either adoption or foster care. Makes available four administrative weeks of paid parental leave in connection with the birth or placement involved.

Among other things, re- Passed the House on 3/21/13 duces the federal workforce by 10 percent narfe, May, p. 7 through attrition and increases the amount that federal employees contribute toward their retirement.

ISSUE

federal pay

Bill Number / Name / Sponsor

Latest Congressional Action(s)

H.R. 933: Fiscal Year 2013 Continuing Appropriations Act / Rep. Harold Rogers, R-KY

Funds the federal govern- Signed into law on 3/26/13 ment for the remainder of (P.L. 113-6) fiscal year 2013 (through September 30, 2013) at se- narfe, May, p. 6 questration levels. Freezes federal pay for a third year (2013).

H.R. 1367: FEHBP Prescription Drug Integrity, Transparency, and Cost Savings Act / Rep. Stephen F. Lynch, D-MA

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).

It requires that pharmacy benefit managers, who currently contract with individual insurance plans to provide FEHBP prescription drug benefits, return 99 percent of all rebates, market share incentives and other monies received from pharmaceutical manufacturers for FEHBP business and caps prescription drug prices paid by the FEHBP.

Referred to the House Committee on Oversight and Government Reform

Removes federal employees from the Federal Employees Health Benefits Program (FEHBP) and places them in the health exchanges created under the Affordable Care Act.

Referred to the House Committees on Oversight and Government Reform, Energy and Commerce, and Administration

Cosponsors: 3 (D)

Health Care

Health Care

What Bill Would Do

H.R. 1780: To provide that the only health plans that the federal government may make available to the president, vice president, members of Congress and federal employees are those created under the Patient Protection and Affordable Care Act or offered through a health insurance exchange / Rep. Dave Camp, R-MI

narfe, June, p. 9

narfe, July, p. 15

Cosponsors: 16 (R) H.R. 1795: Social Security Fairness Act of 2013 / Rep. Rodney Davis, R-IL GPO/WEP

Cosponsors: 60 (D), 23 (R) S. 896: Social Security Fairness Act of 2013 / Sen. Mark Begich, D-AK Cosponsors: 7 (D), 3 (R)

Repeals both the GovernReferred to the House ment Pension Offset (GPO) Committee on Ways and and the Windfall EliminaMeans tion Provision (WEP).

Referred to the Senate Finance Committee narfe, July, p. 16

(continued on p. 20) w w w. n a r f e . o r g

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Washington Watch

narfe bill tracker ISSUE

(continued from p. 19)

Bill Number / Name / Sponsor H.R. 630: The Postal Service Protection Act / Rep. Peter DeFazio, D-OR

postal reform

Cosponsors: 156 (D), 7 (R) S. 316: The Postal Service Protection Act / Sen. Bernie Sanders, I-VT

What Bill Would Do

Latest Congressional Action(s)

Eliminates the future retiree health benefit prefunding requirement, protects six-day mail delivery and prevents the closure of rural post offices.

Referred to House Committees on Oversight and Government Reform and Judiciary

Moves the U.S. Postal Service to five-day mail delivery, removes protections for injured workers and eliminates to-the-door delivery in favor of cluster boxes.

Approved by the House Committee on Oversight and Government Reform on 7/24/13

Referred to the Senate Committee on Homeland Security and Governmental Affairs

Cosponsors: 37 (D) H.R. 2748: Postal Reform Act / Rep. Darrell Issa, R-CA postal reform

See story, below

PANEL Approves Postal Reform Bill

T

he House Committee on Oversight and Government Reform approved a postal reform bill, H.R. 2748, on July 24 on a party-line vote. Twenty-two Republican members voted in favor, and 17 Democratic members voted against.

Introduced by Committee Chairman Darrell Issa, R-CA, the bill drew criticism from NARFE. It “places the burdens of costcutting on the backs of the postal workforce while undermining the mission of universal mail service provided by the United States Postal Service,” NARFE President Joseph A. Beaudoin said in a letter to the panel before its vote.

NARFE also sent a letter to the committee in advance of its July 17 hearing to review postal reform proposals. NARFE’s views were entered into the official record of the committee and are available on the NARFE website, www. narfe.org.

In its letters, NARFE said it

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supports proposals that would reduce the annual requirement to prefund future U.S. Postal Service (USPS) retiree health benefits by allowing the obligation to be paid over a longer term rather than the 10-year period required under the 2006 postal reform law.

NARFE criticized the Issa bill’s provision that would take away the protections of federal workers’ compensation from injured postal employees, replacing them with a USPS-created program without the guarantee of income security during the period in which the injured employee is unable to work.

Although the Issa bill would not make major changes to postal employee and retiree health benefits, Postmaster General Patrick Donahoe, in his testimony at the hearing, once again put forward the USPS proposal to provide its own health benefits plan for postal employees and retirees, ending their participation in the Federal Employees Health Benefits

Program. NARFE has opposed, and will continue to oppose, this proposal.

—By John Hatton, Deputy Legislative Director

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.

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THIS IS NOT INSURANCE. TruHearing provides discounts through contracted health plans and enrolled employer groups for hearing aid sales and professional services at selected hearing care providers. Professional services for fitting, programming and three NARFENB0513R1

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Questions & Answers

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

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

active employees Nonspouse TSP Beneficiary

Q

If I designate my brother as the beneficiary of my Thrift Savings Plan (TSP) account, can he, upon my death, transfer the entire amount in the TSP account to an inherited IRA?

A

Yes. According to the TSP pamphlet “Death Benefits: Information for Participants and Beneficiaries,” a nonspouse beneficiary can request that the TSP transfer all or part of the death benefit payment directly to an inherited IRA. Page 13 of the pamphlet explains what an inherited IRA is, and page 14 has information on taxes. A nonspouse beneficiary cannot retain a TSP account. In the event of your death, your brother would have the option of placing the money in an inherited IRA or receiving a lump-sum payment. The pamphlet is available at www.tsp.gov/ PDF/formspubs/tspbk31.pdf.

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Contributions Refund

Q

I understand that Civil Service Retirement System (CSRS) employees have the option of a full refund of their retirement contributions, plus interest. I know some employees who took a refund and invested it. If I take a refund of my contributions, what is the interest that I would get on that refund?

A

Employees who leave government before they are eligible for an immediate annuity may request a refund of their CSRS or Federal Employees Retirement System (FERS) contributions. If you contributed to the CSRS while you worked,

interest would be included in the refund of those contributions if you have more than one but less than five years of service. Interest on refunded CSRS and FERS contributions is variable. For 2013, it is 1.625 percent.

Employees who separate from the federal government and who are entitled to an immediate annuity within 30 days of their separation date may not receive a lump-sum refund of their retirement contributions.

Medicare Coverage for Kidney Failure

Q

I am still working and was informed that I may have kidney failure. Will Medicare cover me for this if I am still working?

A

You may be eligible to enroll in Medicare health insurance prior to age

65 if you have End-Stage Renal Disease, which is defined as permanent kidney failure requiring dialysis or a kidney transplant.

If you suffer from End-Stage Renal Disease, visit your local Social Security office or call Social Security at 800-772-1213 to sign up for Medicare Part A and Part B. You also may enroll before age 65 if you have certain disabilities.

You automatically get Part A and Part B after you get disability benefits from Social Security or certain disability benefits from the Railroad Retirement Board for 24 months.

Continuing FEHBP In Retirement

Q

I am filling out my retirement package paperwork. I am under the Civil Service Retirement System. I have a question about the SF-2801 Schedule D, “Agency Checklist of Immediate Retirement Procedures.” It says that the employing office fills out this checklist.

Question 6 asks if the applicant is eligible to continue health coverage in retirement. I intend to continue my enrollment in the Federal Employees Health Benefits Program (FEHBP). Is there any form I need to fill out to do this?

Also, if I decide to retire at the end of December, when would be a good time to submit my retirement forms?

A

Question 6 is for the agency to confirm to the Office of Personnel

Management (OPM) that you are eligible to continue your FEHBP coverage into retirement. To be eligible to continue your health insurance coverage into retirement, you must have had continuous enrollment, or coverage as a dependent by another federal employee, for the five years immediately prior to retirement. The agency will certify either you are or you are not eligible, and OPM will then act accordingly, either by letting your plan know to terminate your coverage or to continue your coverage and that your premiums now will be paid by OPM. You do not have to take any action to continue your health insurance coverage during the retirement process. You would only take action if, for some reason, your agency indicated you were not eligible, OPM notified you that your health benefits coverage was being terminated and you disagree with that decision.

You should submit your retirement application to your personnel center two months prior to your planned date of retirement.

The April issue of narfe magazine featured ways employees can speed their retirement journey, including checklists from OPM to assist in preparing retirement claims. This information also is available on the NARFE website, www.narfe.org (log in; click on “Departments” at the top of the Members Home Page and select “Federal Benefits” from the drop-down menu. Look for “OPM Retirement Guide and Checklists” in the center of the page).

FERS Plan

Q

I was just hired by the federal government, and I am covered under the Federal Employees Retirement System (FERS). For clarification, what is FERS coverage?

A

FERS became effective in 1987, and most new federal civilian employees hired after 1983 are automatically covered by FERS. FERS is a threetiered retirement plan. The three components are: • FERS basic benefit; • Social Security; and • Thrift Savings Plan.

The FERS basic benefit, to which you contribute 0.8 percent of salary, and Social Security, to which you contribute 6.2 percent of salary, are “defined-benefit” plans in which the formulas are set, and you have no control over how much you can contribute or receive, except for the number of years you work before retirement.

The Thrift Savings Plan portion of your overall benefit is a “definedcontribution” plan, and you have a great deal of control over how and how much you invest toward your retirement.

retirees Will 2014 FEHBP premiums skyrocket?

Q

Is there any truth to the rumors I’ve heard that health insurance plan premiums will go up next year by somewhere in the range of 30 to 60 percent? w w w. n a r f e . o r g

|

23

Questions & Answers

A

We wouldn’t put much stock in such rumors.

In the case of Federal Employees Health Benefits Program (FEHBP) premiums for 2014, there is no basis for that kind of increase. We will provide an update on FEHBP premium costs when the Office of Personnel Management makes the official announcement. Look for information in the November issue.

When to Collect Social Security

Q

I am a retired Civil Service Retirement System (CSRS) employee who worked in the private sector long enough to earn the number of quarters required to be eligible for Social Security benefits. I will turn age 65 in two years. Can I wait to apply for Social Security benefits until I reach age 70? In the event that the Windfall Elimination Provision (WEP) is repealed in the future, I believe I would be able to receive greater benefits by delaying my application.

A

The Social Security Administration says waiting to draw your benefits is advantageous, in and of itself.

You can start collecting as early as age 62, but the full retirement age for people who are now in their 60s is age 66. If you choose to apply for benefits at age 62 instead of age 66, you would get only 75 percent of your full benefit. But for each year you wait beyond age 66, you would get an additional 8 percent. So if you can hold out until age 70, you would get 132 percent of your full benefit.

However, unless it is repealed, the WEP will cause your benefit

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to be reduced, whether you apply now, at age 66 or at age 70.

Spouse Social Security

Q A

I am a federal retiree. Can my wife receive her full Social Security benefit when she retires?

Your spouse is entitled to her full Social Security benefit based on her own work record. The only way that she would not receive her full benefit is if she is entitled to a pension based on her earnings where Social Security taxes were not withheld.

Notifying OPM of Annuitant Death

Q

I know there are several methods you can use to notify the Office of Personnel Management (OPM) of the death of a federal annuitant. What is the best way? Also, what information do you need to provide?

A

Probably the best way to report an annuitant death is to use the electronic form located on OPM’s website at www.opm.gov/retirement-services/my-annuity-and-benefits/ life-events/death/report-of-death.

You also can: • Call the Retirement Information Office toll-free at 888-7676738 (however, this number is often busy); • Email OPM at retire@opm. gov; or • Write to OPM at U.S. Office of Personnel Management Retirement Operations Center, P.O. Box 45, Boyers, PA 16017-0045.

Individuals reporting the

death of an annuitant or survivor annuitant must have sufficient information for OPM to identify the deceased in its records. So you should provide the deceased’s full name, date of birth, retirement claim number or Social Security number, and date of death.

Reinstating disability retirement

Q A

If my civil service disability retirement benefit stops, can it ever be reinstated?

Yes. If your disability benefit stops because you are found recovered, either medically or administratively, from the disability that resulted in your retirement, your benefit may resume if the same disability recurs and you did not exceed the 80 percent earnings limitation during the calendar year before you apply for your benefit to be reinstated. If your disability benefit was stopped because you worked and exceeded the 80 percent earnings limitation, your benefit can resume effective the first of the year following the year your income no longer exceeds the 80 percent earnings limit.

Effect of GPO

Q

I worked for the federal government and started collecting a deferred pension at age 62. I am age 77 and under the Civil Service Retirement System. My husband passed away a year ago. After his death, I contacted Social Security about my widow’s benefit and found out I will be getting less than $400 a month because of my federal pension.

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Questions & Answers

I don’t understand why it is that, after my husband worked for more than 65 years contributing to Social Security, I am left to depend on my children for support because my federal pension is not enough to cover my monthly expenses. I lost two-thirds of my income, which is totally unfair. My hope is that someone out there is listening and that something can be done to repeal this policy.

A

NARFE long has worked with the Coalition to Assure Retirement Equity (CARE), which it helped create in 1991, to repeal or reform the Government Pension Offset (GPO)

provision of the Social Security law.

Legislation to repeal the GPO again has been introduced in the current Congress. All past legislation has failed as key lawmakers have been reluctant to consider the bills because of the cost of full repeal.

Rep. Rodney Davis, R-IL, and Rep. Adam B. Schiff, D-CA, introduced the Social Security Fairness Act of 2013 (H.R. 1795) in the House on April 26. Sen. Mark Begich, D-AK, introduced the Senate companion bill (S. 896) on May 8.

It is important that you send a letter to your legislators (you can use the NARFE Legislative Action

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I have tried for more than a year to get my full retirement pension after 40 years of federal service.

Within a year after my retirement, my wife and I divorced. I arranged to provide her 50 percent of my pension. Sadly, my former wife passed away in April 2012, at which time I informed the Office of Personnel Management (OPM). At

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Questions & Answers

NARFE at Your Service that time, I was told it would be six months before they could respond to my request. It is now more than one year. I have called OPM and contacted my senator but with no response from either. I am trying to help some of my grandchildren in college. Can you help?

A

We have made an inquiry to OPM on your behalf and hope they will move quickly on your case.

Over the past year, OPM has focused its resources on reducing the large backlog of pending retirement cases, with other workloads necessarily getting lower priority.

Until budget cuts caused by

sequestration forced a cutback in personnel overtime hours, OPM’s strategic plan to reduce the retirement claims backlog was working, and the backlog has dwindled. If that continues and OPM achieves its goal of being current on processing pending retirement claims, other workloads will be processed in a more timely manner.

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.

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 your question by postal mail to NARFE Headquarters, ATTN: Federal Benefits; or submit it by email to fedbenefits @narfe.org.

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

www. narfe.org.

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Cover Story

Some Financial Fi rms A re

Don t Take

Bait!

the

T

Troll ing f or

Federal Annuities

By David Tobenkin

Federal workers toil decades to gain a federal annuity. But with a pen stroke, a federal retiree can convey much of the annuity’s value to unscrupulous financial companies. These firms are hoping to attract recessionweary pension-holders who have unexpected financial expenses with unconventional, and sometimes illegal, “pension advance� financial products.

For federal annuitants who take the bait, the result can be hefty fees, reduced overall pension benefits or high interest rates to repay loans secured by their pensions.

Some financial companies appear to be targeting federal annuitants with pension advance products in which they promise to convert streams of future payments from the Civil Service Retirement System (CSRS) or Federal Employees Retirement System (FERS) into large up-front, lump-sum cash payments.

A congressional committee and several state regulators recently launched examinations into pension advance products, and some NARFE members say that they already have received pension advance offers from financial companies.

Illustration by Bill Pragluski, Critical Stages, LLC

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Protecting Federal Annuities

Don't Take the Bait!

tially exorbitant rates. Similarly, we are interested in whether innocent investors who may purchase the rights to the pensions believing them to be a worthy and legal investment are being misled or defrauded by the companies involved in brokering these agreements.”

Several state regulators also have launched investigations into pension advance practices of financial companies, notably New York and Massachusetts. In May, a Massachusetts Secretary of the Commonwealth press release announced an investigation into companies that seek to purchase settlement income streams, including those of retired government and military retirees. The press release said the Massachusetts Securities Division had sent letters of inquiry regarding the operations in the state of nine financial companies, including whether the companies seek to securitize future income streams.

“The focus is on persons in Massachusetts affected, so the investigation applies to all sorts of pensions, state, federal, military and private,” says Brian S. McNiff, communications director, Office of the Secretary of the Commonwealth.

And in New York, Governor Andrew M. Cuomo announced in May that he had directed that state’s Department Assignment of these Pensions Is Illega l of Financial Services (DFS) to launch an investigation into pension advances According to the Boston-based National Consumer Law Cenand to send subpoenas to 10 compater, federal limits on assignments of income include, but may nies it said were engaging in pension not be limited to, the following: advances.

• Federal Old-Age, Survivors and Disability Insurance Benefits “DFS’ wide-ranging investigation (Social Security) are protected from assignment, garnishment into pension advances is targeted at and other legal process, pursuant to Section 207 of the Social determining whether these companies Security statute, 42 U.S.C. § 407(a). have engaged in fraud or misconduct; • Benefits administered by the Secretary of Veterans Affairs violated state usury laws; engaged in (generally for disabled veterans) are protected from assignment, false, misleading or deceptive advertisgarnishment and other legal process ‘‘either before or after reing about rates and fees; and violated ceipt by the beneficiary,” pursuant to 38 U.S.C. § 5301(a)(1). laws prohibiting the harvesting of • Pay of enlisted members (as opposed to officers) of the military pensions,” said the release. armed forces cannot be assigned, and purported assignments are void, pursuant to 37 U.S.C. § 701(c).

Some NARFE Members • ERISA (the Employee Retirement Income Security Act) reTargeted quires that covered pension plans include provisions restricting Several NARFE members say they the assignment or alienation of plan benefits, pursuant to 29 have been targeted by pension advance U.S.C. § 1056(d). Courts differ on whether the anti-assignment offers, either through direct commuand anti-alienation provisions continue to protect pension nications from financial companies, benefits after they are received by the beneficiary. (Copyright through general advertising or through 2012, National Consumer Law Center) social media sites such as Facebook.

In May, the U.S. Senate Health, Education, Labor and Pensions (HELP) Committee announced the launch of an investigation into lenders offering lump-sum payments in exchange for a stake in the borrower’s pension benefits.

The HELP Committee commenced the investigation with a letter to the National Association of Attorneys General, requesting documentation and information that could help the committee identify individuals who may have been targeted by lenders engaging in such practices. The letter described some of the practices under investigation and the related concerns: “Some companies may be looking to take advantage of financially distressed retirees by offering lump-sum payments with potentially illegally high rates of repayment interest. Some of the arrangements appear to come with extraordinarily high fees, yet it is unclear whether these fees are disclosed to retirees who might later find their long-term economic security compromised. There also appears to be a requirement to purchase other financial products like life insurance simultaneously with the pension assignment at poten-

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“Another retired employee promoted [a financial company’s lump-sum pension offer] to me over Facebook,” says Anita Johnston, a former employee at the U.S. Department of Agriculture’s Farm Service Agency who took early retirement at age 50 in 2012 under the CSRS plan. “This place [one of the 10 companies named on the state of New York DFS’ list] was giving her a referral fee if I used them.

I was not interested, so I did not even access the [web]site. I figured this was only something that I would look at if I was desperate.”

“I am not even a retiree, yet for the last year, I have received these [pension advance offer] messages from some financial services company by phone,” says an Oklahoma City-based Federal Aviation Administration employee. “As soon as they asked for my financial information, I hung up on them.”

An Elusive Product

The structure of pension advance financial schemes can vary significantly. In many pension advance arrangements, the financial company acts as a middleman, matching investors who wish to receive a higher rate of income through person-to-person lending with pension-holders looking to increase the flow of money from their pensions.

Generally, the arrangements are designed to skirt federal and state laws. At both levels, many laws regulate loans to consumers, often prohibiting excessive interest rates and mandating certain basic disclosures about the costs and terms of the loan.

However, such laws often do not cover “assignments of rights.” Such assignments, where the pension-holder signs over rights to payments under the pension, do not qualify as loans because there is no expectation of the return of principal at the end of the loan period. State laws vary considerably as to whether and under what circumstances they regulate and allow legal actions against abusive assignments.

The New York Department of Financial Services states that it does have such authority.

“Under New York Financial Services Law, DFS has the power to conduct investigations into and provide oversight for new financial products that are not currently subject to regulation,” said the release announcing the DFS investigation. “Previously, these ‘gap products’ – such as pension

A congressional committee and several state regulators have launched investigations. advances – could have gotten stuck in regulatory blind spots while consumers were harmed.”

Another practice associated with some pension advances that makes it difficult to withdraw from them is that they may contain voluntary allotment provisions, which allow for payment to be taken directly from a paycheck and transferred to a creditor or financial institution in a manner similar to a wage assignment. “This is a legal but very arcane payment process that provides an unprecedented level of access to wages and fewer consumer protections,” says Tom Feltner, director of financial services at the Consumer Federation of America.

The type of pensions that are targeted for pension advances can make a difference with respect to challenging their legality. Assignments of some types of pensions are clearly illegal under federal law (see sidebar, p. 32).

Of particular interest to federal retirees, federal laws bar assignments of federal annuity payments (see sidebar, p. 34). Federal statutes also allow the Office of Personnel Management (OPM) to limit allotments of benefits. In its rules, OPM states that it does not allow for the allotment of annuities to any organization other than a “nonprofit,” “noncommercial” organization “existing primarily for the purpose of representing employee or annuitant interests in their dealings with employing agencies or OPM” (such as, for example, a union or other employee organization, thus allowing annuitants to continue to pay dues), says an OPM spokesperson. In addition, CSRS and FERS annuities are subject to court orders for divorce/annulment/separation and garnishments due to child support judgments.

A Growing Problem?

There are no statistics on the volume of pension advance activities. There may be a relatively smaller number of pension advance products targeting retirees compared to other questionable and illegal financial products pitched to retirees. This is because they typically represent large-sum transactions that w w w. n a r f e . o r g

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Protecting Federal Annuities

Don't Take the Bait! are more difficult for financial companies Limits on Assignment of Federal Pensions to finance, says Stuart Rossman, director of litigation at the National Consumer Law For Civil Service Retirement System (CSRS) annuities, federal Center (NCLC). law 5 U.S.C. § 8346(a) expressly bars assignments of annu“For the most part, our experience ity payments unless specifically authorized by the Office of with these pension assignments has Personnel Management (OPM) or pursuant to particular court been that there are a lot fewer consumer orders. For Federal Employees Retirement System (FERS) antransactions per company than one nuities, the prohibition against assignments is found in federal x would expect,” says Rossman. “Many law at 5 U.S.C. § 8470(a), with exceptions similar to those companies are trying to promote these under CSRS. transactions, and they may have diluted Other federal laws allow OPM to limit allotments of benefits the marketplace. Furthermore, other to CSRS and FERS beneficiaries, which OPM has chosen to do competing financial products, like paythrough rules it has issued. day loans, involve smaller investments of funds, whereas pension assignment deals often require five- to six-figure sums and The facts of the case show just how expensive require a greater up-front cash commitment by such pension advance programs can be to the financiers. As a result, smaller companies pension-holders. The lead plaintiff, Daryl Henry, often only can handle a couple of claims at a a retired and disabled enlisted Navy veteran, time.” received $42,131 as net loan proceeds in exchange Yet the websites of some financial companies for assignment of his military pension in the offering pension advance products, including amount of $1,070 a month for a minimum of 96 those of some companies listed in the New York months and a maximum of 120 months. At the and Massachusetts inquiries, look anything but time his complaint was filed, Henry had already small scale. One features a video of a dapper paid Structured Investments at least $29,960 in gentleman with a British accent and a sympapension payments and an additional $1,760 for thetic tone who pops into view on any web page insurance premiums, representing an imputed on the website that is accessed and starts pitchinterest rate of 26.8 percent for 96 months or 30.5 percent for 120 months. ing pension advances to viewers. Without the The court victory cut off any future payment viewer even clicking on any button, a live-chat obligations for Henry and the other veterans in his dialogue box opens up and a person asks if she lawsuit class.

However, when the NCLC tried to can help you. pursue Structured Investments for amounts the class members had already paid, the company filed Enforcement Actions for bankruptcy protection, Rossman says.

Legal actions against financial companies making Bringing a civil lawsuit against such companies pension advances have been rare. The NCLC is one is not easy, Rossman says. of the few organizations that can boast of a victory “In order to bring a case successfully, you have against a financial company’s pension advance to trap the defendants on the horns of a dilemma,” activities.

Rossman says. “Defendants avoid calling pension In 2011, an Orange County, CA, Superior Court advances ‘loans’ because such lending often will agreed that Structured Investments Co., LLC, had violate state usury interest rate limits (depending violated various state laws by obtaining assignupon the state in which the lender is operating) and ments of retired and disabled veteran military truth-in-lending provisions at the federal level. The benefits, which are prohibited under federal law. second reason the defendants prefer not to treat the The court found that since the contacts constitransactions as loans is that that characterization tuted illegal assignments of retired military penenhances their marketing scheme.” sion and disability benefits in violation of federal However, if the pension advance is not to be statutory provisions, they also were unfair trade treated as a loan, it must exist as some other type of practices under the California state consumer financial transaction, Rossman notes. “Therefore, protection law.

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the court in the Henry case found that the terms of the Structured Investments deal were, in fact, an assignment of pension rights that were illegal under federal law and, as a result, violated the California consumer protection statute prohibiting unfair business practices.”

A big problem with challenging pension advance practices, Rossman says, is that there is no private right of action in many of the applicable federal statutes that prohibit pension assignments, which means that private individuals may not sue to enforce the law; rather, they must be enforced by governmental authorities. Thus, he notes, private attorneys must determine if such illegal practices also violate state consumer protection laws. That would allow private individuals to successfully pursue and win a civil case on behalf of victims, as happened in the case involving Daryl Henry.

It is clear that pension advance practices are not high on the radar of many private-sector law firms that represent federal employees. Attorneys from two leading firms specializing in advocating on behalf of federal employees with vast experience in government employee matters say that pension advance practices are not an area in which their firms have been active.

Such practices also may not be high on the radar of federal regulatory agencies. “The [Federal Trade Commission (FTC)] hasn’t brought any actions involving this practice,” says Frank Dorman, an FTC spokesman. Consumer Financial Protection Bureau (CFPB) Director Richard Cordray expressed concern about military pension buyout schemes in prepared remarks issued in 2012, saying, “We want to collect information on all of these kinds of financial practices.”

Representatives of the CFPB had no updates on subsequent related CFPB actions when asked recently.

A Possible Legislative Fix

Rep. Matt Cartwright, D-PA, whose congressional district includes the Tobyhanna Army Depot, the largest employer in the district and home to a large number of federal retirees and veterans, is working on a legislative fix to the problem. In June, sources said that Cartwright was in the early stages of drafting legislation that would expand certain disclosure provisions of the Truth in Lending

Act to apply to any situation where military retired pay or a federal pension was used as consideration for an “advance” and would also include a private right of action to facilitate civil lawsuits. The draft legislation, which could be introduced by late summer or early fall, might also include a cap on interest rates that can be charged and would seek to expand advertising and marketing regulations found in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, which, among many other provisions, created the Consumer Financial Protection Bureau.

Tough Times and the Underlying Problem

Federal annuities were designed to provide a stream of guaranteed income. Rather than awarding a lump sum that an unwise recipient could spend or gamble away frivolously, the federal government provides its retirees with a defined-benefit amount each month.

These annuities are generally more generous than defined-contribution retirement vehicles, like 401(k) plans, in which a savings amount is amassed by the retiree and can be borrowed against more easily.

“There is no way current federal employees can obtain funds from their FERS or CSRS definedbenefit plan in advance of retirement or in retirement other than a series of monthly payments,” says Bob Leins, a certified public accountant with the National Institute of Transition Planning, Inc., a Rockville, MD, provider of seminars on federal benefits. So, don’t take the bait; safeguard your monthly payments.

—David Tobenkin is a freelance writer based in the greater Washington, DC, area.

the state of health of the

social security Each year, the Trustees of the Social Security and Medicare trust funds report on the current and reports reignited debate about Social Security reform. We asked two policy experts, with different Social Security Trust Fund and what kind of reform they believe is necessary. Employees under the The opinions of the authors are theirs and do not reflect the views of NARFE.

two points of view

Extend Solvency With A Balance of Revenue, Benefit Changes

By David Brown

The Great Depression hurt seniors as hard as any group of Americans. Unemployment and massive loss of wealth helped cause more than 50 percent of seniors to live in poverty. Their condition led President Franklin D. Roosevelt to push through Congress the Social Security Act of 1935.

Roosevelt’s law has proven remarkably effective. Social Security’s system of self-financing has ensured security to generations of retirees through economic expansion and depression, war and peace.

Social Security endured largely because of Roosevelt’s genius idea: through the payroll tax, separating the financing of Social Security from the rest of government. The system is designed to keep benefits stable, no matter the economic and political forces of the day. Prior to the law’s passage, (Continued on page 38)

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social

trust fund projected financial status of the two programs. The release of the 2013 points of view on the subject, for their opinions of the health of the Federal Employees Retirement System are eligible for Social Security.

the Fund is not in crisis: Raise the salary cap, but don’t cut benefits

By Dan Adcock

The Social Security Trustees report reaffirmed that the social insurance program is not bankrupt or in crisis.

However, it faces a funding shortfall starting in 2033 — two decades from now — when trust fund reserves are estimated to be depleted. But even then, there will still be enough incoming payroll tax revenue to pay 77 percent of all benefits. No one wants that to happen. And luckily, in our view, this shortfall is manageable and resolvable.

Unfortunately, some have used the report to assert that the opposite is true and have created the myth that the only way out is through unpopular benefit cuts.

Regrettably, President Obama has added fuel to this fire by proposing the Chained Consumer Price Index (CPI), which would cut Social Security cost-of-living adjustments (COLAs) as part of a “balanced” deficit reduc(Continued on page 39)

security

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social security reform

Two views Extend Solvency With A Balance of Revenue, Benefit Changes (Continued from page 36) Roosevelt said: “If I have anything to say about it, Social Security will always be contributed, both on the part of the employer and the employee, on a sound actuarial basis. It means no money out of the Treasury.”

But today, Social Security’s tax and benefit levels are not actuarially sound. As a result, we are imperiling retiree benefits as well as the system of self-financing Roosevelt knew was critical to the survival of the program.

Two major developments in this year’s Trustees Report underscore Social Security’s condition.

First, 2013 marks the first year since 1982 during which the value of the trust fund will decline, in inflation-adjusted dollars. The fund peaked at the end of 2012, at $2.8 trillion, but will fall to $2.7 trillion at the end of this year. The fall will accelerate until 2033, when the fund’s insolvency will force an immediate 23 percent benefit cut for all retired, disabled and survivor beneficiaries.

Second, 2013 is the first year in decades in which Social Security projects it will not pay full benefits to the average new retiree for the duration of his or her retirement. What does that mean? Consider a woman retiring this year at the normal retirement age of 66. Social Security’s actuaries expect her to live to age 86½. But the trust fund cannot pay full benefits for the duration of her retirement. When she is 86, in 2033, the trust fund will be insolvent – and her benefits will be cut by 23 percent.

For the first time, we’re not just talking about tomorrow’s retirees. We’re talking about today’s.

The good news is that Social Security’s solvency gap is perfectly solvable.

Third Way, the organization for which I serve as policy adviser, has a 10-step plan to reach 75-year solvency. It would raise – but not eliminate – the payroll tax cap to generate more revenue. It would also bump up benefits for the neediest beneficiaries and slow benefit growth for the wealthiest.

It would index the normal retirement age to life expectancy, so that as Americans live longer, the retirement age keeps up. Most importantly, all

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savings would accrue to the trust fund, extending the life of the program.

We also realize, though, that passing legislation in today’s Congress isn’t easy. That’s why we’ve presented not only a policy plan, but also a political process to help enact something like it.

The process must begin soon – because every year we wait, needed fixes grow larger, and the less time beneficiaries and taxpayers will have to adjust. That’s why we’ve called for Congress to appoint a commission that would craft a 75-year solvency plan, which would be guaranteed an upor-down vote in Congress by 2015.

Washington has seen its share of commissions in recent years. But history shows a well-designed commission can succeed. The Defense Base Closure and Realignment Commission (BRAC) effectively overcame tough politics five times over the past 25 years. And the last major rescue of Social Security came in 1983, after a bipartisan commission, led by the future Federal Reserve Chairman Alan Greenspan, brokered a compromise between the parties.

Unfortunately, many in Washington prefer to put off saving Social Security. Oddly enough, they include the loudest, self-proclaimed advocates for the program. Bent on a taxes-only solution, these delayers want to run out the clock. On the eve of insolvency, they predict, Congress will feel so pressured by retirees it will be forced to raise taxes on workers to maintain promised benefits.

The delayers aren’t just seeking tax hikes on the wealthy, but tax hikes on all working Americans.

They talk most about taxing the wealthy – by eliminating the payroll tax cap, now at $113,700.

But the chance for that idea to work on its own has passed. In 2010, eliminating the tax cap was projected to close 99 percent of the solvency gap.

In 2012, that measure would have closed only 72 percent of the gap. If the delayers run out the clock, a taxes-only solution would have to rely on an increase in the payroll tax rate. That would hit the poor and the wealthy alike.

(Continued on page 40)

social

the Fund is not in crisis: Raise the salary cap, but don’t cut benefits (Continued from page 37) tion deal. Veterans benefits and federal civilian and military retirement COLAs also would be cut under the Chained CPI proposal.

Three years after enactment, the Chained CPI would cut the Social Security benefits of a typical 65-year-old by about $130. By age 95, the same senior would face a reduction of almost $1,400 per year. That may seem like peanuts to the wellfunded, anti-deficit lobby and corporate CEOs who want middle-class Americans to pay down the debt, but those dollars mean a lot to seniors living on the average Social Security income of just $15,000 per year. That’s why more than 50 national military, veterans, seniors, disability and federal employees organizations – including NARFE – joined the National Committee in opposing the Chained CPI. Social Security has not added one dime to the deficit, and we believe trading it away for some non-Social Security rationale is inexcusable.

What’s more, there is nothing balanced about a deal in which the middle and working classes and the poor must lose part of their modest and earned Social Security benefits.

Some rationalize a so-called balanced approach – like the recommendations made by Fiscal Commission co-chairs Alan Simpson and Erskine Bowles – because they believe it forces everyone to “take a haircut.”

But the reality is that middle-class Americans have already taken a buzz cut through job loss, mortgage foreclosures, decimated savings, and the reduction or loss of employer-sponsored retirement and health benefits. Federal employees and retirees know all too well that there has been nothing balanced about how they have been singled out for pay freezes, furloughs and benefit cuts.

Beyond their so-called balanced approach, the anti-deficit lobby has tried to divide and conquer their opponents by suggesting that every dollar spent on an older person is one less dollar spent on children. This is a false choice that needlessly pits middle-class and poor seniors against

middle-class and poor children.

In a June commentary, Dean Baker, co-director of the Center for Economic and Policy Research, found several flaws in this argument. “Countries that spend more on their seniors also tend to spend more on their kids,” Baker wrote. “It seems that the question is more of national priorities for ensuring that people get treated decently at both ends of life.”

The truth is the anti-deficit lobby wants to cut programs that benefit young and old alike without asking those who have benefited the most from the $1 trillion spent annually on tax loopholes to pay their fair share.

In addition, supporters of the austerity agenda say entitlements create a dependency culture and that entitlement spending is out of control. But they ignore that Social Security and part of Medicare are earned benefits. Entitlement spending is not out of control, but health care costs are. What’s worse is they have no alternative, other than benefit cuts or privatization in the public sector, while they hypocritically oppose measures to control costs in the private sector.

We say that Social Security is not in crisis because there is now $2.73 trillion in program reserves. The trust fund will run a surplus until 2020 and will be able to pay full benefits until 2033.

Moreover, the Affordable Care Act has extended the Medicare trust fund by nine years – without cutting benefits. And, comprehensive reforms in the new law intended to contain all health care costs are working and should be fully implemented and strengthened.

These are all good arguments. However, there is a more compelling way to make this point. Austerity supporters have only one alternative – cutting benefits. But they have no answer to the consequences of cutting benefits – generating a tsunami of seniors living in poverty.

This is not hyperbole. We live in a country where more than half of all workers have no access to (Continued on page 40)

security

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social security reform

Two views Extend Solvency With A Balance of Revenue, Benefit Changes (Continued from page 38) But there’s a good chance running out the clock won’t work. A large tax increase on all workers is a political nonstarter. And automatic benefit cuts, which are set to happen in 2033 without action, would cause an equally loud outcry.

If Congress delays action, the most likely outcome in 2033 would be this: Faced with worried beneficiaries on one side and resentful workers on the other, Congress maintains promised benefits by borrowing from general revenue. In effect, that would require more federal borrowing to pay for everything else the government does. And for the first time in its 98-year history, Social Security would lose the self-financing system President Roosevelt insisted upon.

When Roosevelt signed the law, he said Social Security should “act as a protection to future administrations of the government against the necessity of going deeply into debt to furnish relief to the needy.”

Without its own funding system, Social Security will compete annually for funding with everything else in the government, and it will be subject to annual cuts, just like everything else in the government.

Running out the clock is a gamble unfair to the current and future beneficiaries of Social Security.

Rather than ignoring the problems, we should act now. The neediest beneficiaries can be protected, changes can be smaller and we can alert retirees years in advance of the changes. Most importantly, we can restore certainty to the program, so that retirees benefit from not only the money value of their benefit but also the insurance value – the peace of mind, when planning their retirement, that a certain portion of their lifeblood is guaranteed.

—David Brown is policy adviser for the economic program at Third Way, a Washington, DC, think tank whose mission is to advance moderate policy and political ideas.

the Fund is not in crisis: Raise the salary cap, but don’t cut benefits (Continued from page 39) retirement plans at work, and millions reach retirement age without enough private savings to live on.

The present and growing retirement crisis means that we should be strengthening the social insurance safety net, not cutting benefits. The alternative is not acceptable.

That’s the kind of case Governor Jerry Brown made successfully in California in support of the revenue increase ballot question that voters approved in November 2012. He told voters that the alternative of allowing more cuts in education and essential health and public safety services was not acceptable.

That’s why we have to make a similar argument when we tell our leaders that cutting Social Security and Medicare benefits – and by extension federal retirement and health benefits – is not acceptable.

Fortunately, the polling shows that Americans

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do not want benefit cuts and that they are willing to pay for a strong social insurance safety net.

The National Committee’s polling – and a recent survey commissioned by the National Academy of Social Insurance – have shown strong majorities of Americans favor increasing the cap on Social Security payroll taxes to restore Social Security’s long-term solvency. The National Committee supports this approach.

This fall, fiscal hawks in Congress will demand cuts to Social Security, Medicare and federal civilian retirement in exchange for their vote for legislation that will raise the debt limit, fund the government and address the sequester. The National Committee is urging lawmakers not to negotiate away our earned benefits.

—Dan Adcock is director of government relations and policy at the National Committee to Preserve Social Security and Medicare. Adcock was NARFE’s legislative director from 2008 to 2011.

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Special Section

process

negotiatio

Searching for a Place to Call Home

By Ronald J. Manheimer, Ph.D.

Even though she once worked for the U.S. Nuclear Waste Technical Review Board, Vicki Reich still feels overwhelmed at the prospect of disposing of the mountain of half-empty paint cans that occupy one corner of her garage. Reich, 66, a retired federal employee, and her husband Ed, 71, a retired computer programmer, are getting their Falls Church, VA, home ready to put on the market. Like many retirees no longer tethered to jobs, they want to move from the hustle and bustle (and high taxes) of an urban area to a less dense (and lower tax) one that still has the conveniences of a big city. “We thought about the Chattanooga area,” says Vicki, who grew up in nearby Lookout Mountain. But revisiting the area, she found that while it’s more built up, “the area lacks the amenities and inclusiveness we were looking for.” They’re searching elsewhere in the mountain South.

Born and raised in New York City, Ed Reich is fine with smaller towns as long as their new home has an industrial-size workshop for his latest passion – computer-driven robots. Vicki’s concerned that while she is busy gardening, bird watching

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and going to book clubs, Ed will turn into a recluse. He disagrees. “I plan to offer my services to a local university where they teach courses in artificial intelligence.”

Vicki sighs.

Recently, the couple took their retire-

community

n

research

trial and error

give back

explore

wellness plan relocate

learning experience

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Searching for a Place to Call Home ment dreams and differences to a gathering of fellow seekers from around the country who, in or near retirement, are considering moving hundreds of miles to a new place they hope to call home.

Creative Retirement Exploration Weekend

Over the 22 years that the annual Memorial Day weekend workshop has been conducted, thousands of people – couples and singles – have found their way to the Creative Retirement Exploration Weekend, or CREW, hosted by the University of North Carolina Asheville’s Osher Lifelong Learning Institute (UNCA-OLLI). The member-led learning, leadership and community-service program is located on the UNCA campus.

OLLI’s executive director, Catherine Frank, reflects on the participants she’s met at CREW.

“I’d say two-thirds of the people who attend CREW already have some idea of what they want to do next,” says Frank.

“When we ask them why they’re attending, they say: ‘Confirmation! We want to make sure we haven’t overlooked something.’ They come with a list of towns or regions they’re considering – usually including Asheville. We help them work through their checklist or come up with one. In the case of couples, not surprisingly, they sometimes bring or discover their differences.”

Fred and Linda Cardina, volunteer coordinators of CREW, agree. “Negotiating retirement dates and diverging expectations are huge steps in the decision-making process,” says Fred, who draws on his experience as the former HR director of a major international corporation.

“You believe you know what your partner is thinking,” says retired English teacher and communications consultant Linda, “but sometimes you’re wrong.”

The Cardinas, both 68, shepherd the 60-80 annual CREW participants through the three-day program. Their staff includes members of OLLI who take or teach life-enrichment courses in 44

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subjects ranging from the politics of the Middle East to the history of the World Series. Larry Griswold, 65, formerly with Sports Illustrated, is a popular sports history teacher, but for CREW he creates and delivers a slide presentation on retirement housing choices. He’s gleaned photos and stories from friends and acquaintances around the country.

“I cover everything from building a dream house, remodeling a fixer-upper, to trial renting. Whether people choose to live in a town, out in the woods on a mountainside or in a gated community, every story and picture holds a lesson about housing options.”

A “graduate” of CREW 2012, Lori Postal, 66, knows something about these choices. She rented a cabin in the woods for a month. “It was a long-simmering fantasy. Ah, the solitude. The fresh mountain air,” she exults. “How could I have been so wrong? It was just me and the bears. I was afraid to go out at night.”

Postal returned for the 2013 program as a panelist. A year earlier, she was director of nursing for the ambulatory clinics at Duke Medical Center in Durham, NC. “My target age for retirement was 70,” she tells participants. “Was that so I could maximize my Social Security earnings?” She nods. “But really it was because there was nothing I was pining away to do. My life was focused on family and work, and I hadn’t been on a date in 16 years. Then came my wake-up call.”

Postal’s oldest son had been jetting around the world for his job. He developed an embolism in his leg that led to blood clots in his lungs. “Suddenly,” says Postal, “there I was at his bedside. I realized he could die.” Then, in the next moment, she reflected, “we never know when this is our last day.”

Fortunately, her son pulled through.

Relieved, Postal decided there might be a new life looming ahead. She wanted it sooner, not later. So she went online to look for help in charting her future. “I’m a planner. And I wanted to find resources to help

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Searching for a Place to Call Home me gather information and insight.”

Thinking she also might want to relocate, she signed up for CREW. “I was expecting to hear about the nuts and bolts of retiring. You know, budgets, housing, health insurance.”

A lot of that was covered during the workshop, including an optional day for a guided tour of Asheville neighborhoods. But it was the time spent exchanging stories with fellow participants over lunch and at evening dine-arounds in town that helped Postal realize she was not alone in facing the uncertainties of life-changing decisions.

“For me,” says Postal, “the takeaway is that retirement is not an event, it’s a process. Instead of worrying about making mistakes or finding the perfect plan, I could explore by trial and error. If some choice didn’t work out, I could take a step back and revise my plan.” Having reached that conclusion, says Postal, “I went back home and gave notice. My co-workers were shocked.”

Three months later, she moved to Asheville, renting a month at a time to field-test three different neighborhoods, including the one with the bears. She ended up signing a one-year lease on a two-story Victorian home in one of Asheville’s oldest neighborhoods, just a 10-minute walk to downtown. Her modus operandi? “I say yes to everything.

Hiking groups, pottery classes, the newcomers’ club. I’ve even started dating. Scary but exciting,” she adds.

Learning From Participants CREW serves as a mirror to reflect how people are negotiating both retiring and relocating. Steve Schleifer, a former marketing expert and part of the team that helped launch the Lexus automobile, heads up OLLI’s research committee. “I’m the data

guy,” says Schleifer, whose committee conducts everything from program evaluations to surveying CREW participants.

“I wouldn’t say that the CREW cohort is typical of the whole 60+ population,” he says. “The people who come here reflect a high level of educational attainment and a modest-to-high degree of affluence.

About two-thirds are married or partnered, and a third single. That’s been pretty consistent over the years. Employment-wise, 40 percent are already retired. Most of the others are a year or two away but a few plan to work into their 70s. At least that’s what they tell us.”

Predictions about the baby boomers working much longer than their parents’ generation don’t seem evident from the CREW population.

According to Schleifer, their average retirement age is in the 64-67 range.

Is this a surprise? “If you look at the latest study published by the MetLife Mature Market Institute, the folks who have been surveying this cohort for years, the leading-edge boomers turning 67 are retiring in droves.

Even with the big hit many took during the recession.”

Is relocating to another state a common phenomenon for retirees? “Not at all,” says Schleifer. “The vast majority are happy to stay put. Movers are a different breed. They’re seeking a new community that is alive with activity, where newcomers find it easy to assimilate and make new friends, where they can grow, learn and give back.”

Schleifer cites college-town locations such as Fort Collins, CO; Athens, GA; and Charlottesville, VA, as frequently mentioned.

So how many actually make the move? “Over the last four decades for which we have national data, it’s been around 4.5 percent of those 60 and over who make an interstate

relocation each year,” says Schleifer.

“People are surprised it’s such a small percentage. But when you look at the 76 million boomers inching toward retirement, the sheer numbers are huge.”

Younger Boomers At the younger end of the boomer generation is 59-year-old Andrée (Drée) Harris, whose 30-year career with the Centers for Disease Control and Prevention in Atlanta began soon after she graduated from college. “When you have lived and worked in the same town all your life except for a brief period going off to college, the prospects of moving away may seem daunting,” says Harris, who adds, “Breaking ties with the tried and true and broadening my horizons feels like an adventure.”

Doing her adventure preparation homework, Harris is looking for a new hometown with a “built-in community” such as she found at UNCA’s OLLI. “What it offers would nurture my sense of curiosity and my wish to learn new things and to meet like-minded people,” says Harris, who adds one more element. “I want to be in a town that’s progressive.” For many, the political and cultural tenor of a community – cosmopolitan or provincial – can have a profound influence on whether it’s truly a place to call home.

10 Keys to Success Summarizing the keys to a successful retirement relocation based on what she’s gleaned from CREW participants, UNCA-OLLI’s Frank listed the following.

1. See the transition as a multi-year learning experience, not a set of hurdles to jump over.

2. Don’t worry about making mistakes or having to find the absolutely perfect place. You can

always change your mind.

3. Sit down and interview yourself at your keyboard or with pen and paper. What do I want out of life?

Try to be specific. Don’t censor your fantasies. If you have a partner, have him or her do the same, but separately. Then compare notes.

4. Try out places you think you’d like to call home. If possible, rent in the off season (Florida, summer; Asheville, winter; Fort Collins, late fall or early spring).

5. Share the process of exploration with friends and family, but don’t be surprised at some pushback: “What? You’re too young to retire.”

Or, “You mean you’re not going to raise the grandchildren?”

6. For couples, make sure both partners are fully aware of their financial situation. Don’t have one assume responsibility. If he or she is not around, then what?

7. Create a soft landing. Prepare while you’re still working to learn new job or coping skills you can use once you’ve made the leap.

8. If it’s been a while, get a complete physical. Develop a wellness plan with your physician or a personal trainer. Relocating is strenuous and can be stressful.

9. Find what feeds your spirit, whether it’s membership in a faith community, going fishing, throwing pots or doing yoga.

Are these available in your new hometown?

10. Cherish the privilege of a longer life, a gift of time and choices few in previous generations could enjoy.

—Ronald J. Manheimer, Ph.D., is the founding director of UNCA-OLLI (formerly known as the North Carolina Center for Creative Retirement). Semiretired, he is the principal of the Manheimer Group (www.Ronmanheimer.com). For information on CREW, see www.ashevillecrew.com.

Life is not a rehearsal

Duo and Rehearsal by Paul Arnold, Oberlin College Professor Emeritus

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Managing Money

a tax-free way to cash savings bonds

S

eries EE bonds (the best-known of the U.S. Savings Bonds) provide attractive tax benefits, such as tax-exempt interest at state and local

levels as well as federal tax deferral on the bond interest until the bond is sold or matures. While tax deferral can be a benefit, it also can create issues down the road. In fact, despite record low rates on many Series EE bonds, the unpaid taxes on the accrued interest have many reluctant to cash in their Series EE bonds. If this sounds familiar to you, there may be a way for you to sell the bonds and exclude the interest from federal taxes.

First, it’s not possible to sidestep the tax on the gain by gifting a Series EE bond to someone else because a transfer of ownership triggers a tax liability on any interest accrued up until the date of transfer.

Furthermore, unlike other investments, Series EE bonds are not marked up to fair market value when you die, so even death won’t get you or your heirs out of paying the taxes on Series EE bond interest.

Fortunately, however, Congress created the Education Savings Bond program in 1990, permitting owners of Series EE bonds who sell and use the proceeds to pay for qualified higher education expenses to exempt the interest from federal income tax. Qualified higher education expenses include tuition and fees paid to

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eligible educational institutions for the enrollment or attendance of the bond owner, the owner’s spouse, or any dependent for which the owner claims a deduction.

There are additional requirements, such as the owner must have been at least 24 years old when the bond was purchased; the bond must be issued in the owner’s name, or the owner and the owner’s spouse’s name; if the owner is married, a joint return must be filed; and the bond must be redeemed in the year the qualified educational expenses are incurred.

If you meet these requirements, there’s yet another hurdle to clear – the income phase-out limitation. For single filers, the income tax exclusion is phased out with modified adjusted gross incomes

By Mark A. Keen,

CFP®

between $74,700 and $89,700.

For couples filing jointly, the phase-out is between $112,050 and $142,050.

Even if you, your spouse or a dependent won’t be going back to school, don’t despair, there is another solution. For the purpose of the Education Savings Bond program, contributions to qualified tuition programs, such as 529 Savings Plans, are also considered a qualified education expense. This permits you to redeem your Series EE bonds, invest the proceeds into a 529 plan and exempt the bond interest from federal taxes. Furthermore, withdrawals from 529s are free from federal tax as long as the money is used to pay for qualified higher education expenses.

All of the other rules for using Series EE bonds to pay for education expenses still apply, so assuming you don’t have kids or grandkids as dependents, you will need to open the 529 Savings Plan with you as owner and beneficiary.

Once the money is in the 529 Savings Plan, however, you are permitted to change the beneficiary of the account to your grandkid, or pretty much any other family member, for that matter. There are some gift tax rules and other nuances you’ll need to pay attention to, but nothing that your financial

FINANCIAL TOOLS NARFE offers an online retirement calculator and other financial planning tools. Find out more at www.narfe.org/ federalbenefits.

adviser or accountant couldn’t help you navigate.

This could be a great way to exclude the interest on Series EE bonds from taxes, but you need to analyze your individual bonds to make sure you aren’t giving up too much for the tax-free benefits.

For example, all Series EE bonds are guaranteed to double by their original maturity date. For bonds issued since 2003, this is 20 years, but older bonds

have shorter original maturity dates. Fortunately, you can visit www.TreasuryDirect.gov and use one of two calculators to find out all the information you need to know on any Series EE bond you own.

Of course, there are risks to consider as well.

Series EE bonds, which are backed by the full faith and credit of the U.S. government, provide a minimum guaranteed interest rate. A 529 Savings Plan, on the other hand, may not offer a guaranteed product, and the investment’s value will fluctuate over time. Consult your financial adviser or accountant to determine if the Education Savings Bond program options are worthwhile to you.

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.

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The Informed Citizen

taking responsibility

N

ARFE has a large membership, recruited from a much larger membership pool. The August issue of narfe magazine (p. 12) updated the state counts of annuitants, with separate counts of employee annuitants and survivor annuitants.

Updated federal and postal employee counts also were shown, and totals were provided by state, territory and nationwide. The “federal family” now stands at 5,149,087.

As advocates, NARFE speaks on behalf of the entire federal family. However, senators and representatives use sophisticated databases to manage constituent communications that provide daily, weekly and monthly counts of the postal mail and email received on each issue. In fact, these counts can be compared by issue or date range with only a few keystrokes. If you have ever told your legislators that you are a NARFE member, that may have been coded in your record.

Right now, the inflation protection you were promised throughout a career in federal service faces a real threat from a proposal to change the statutory basis of the cost-of-living adjustment (COLA) for federal annuities and Social Security from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to the Chained CPI. If enacted as part of a “grand bargain,” the Chained CPI would mean a reduced COLA every year, compounding over the years. For instance,

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federal employees who retired in the past year, 46.4 percent of whom are covered by the older Civil Service Retirement System (CSRS), with the median monthly annuity ($4,043) would stand to lose $9,497 over 10 years and $44,026 over 20 years.

Income security is not the only thing threatened. Health security faces a threat from legislation (H.R. 1780), introduced in May, that would undermine the Federal Employees Health Benefits Program risk pool by removing federal employees.

Enter NARFE activists seeking redress of grievances using various tools. First are the easily tracked messages carried by the NARFE Legislative Action Center. Since its launch on December 12, 2012, our “Oppose a Change in the COLA Formula” message has been viewed by 42,958 eActivists but sent by only 15,272. The White House has been on the receiving end of 24,347 email messages and the Congress, 72,713.

Though hoping to be deluged, we have only 200 confirmed in-

By Christopher Farrell, Legislative Representative

stances where NARFE members participated in our “Pen Project,” sending letters and postcards to their congressional delegations and a confirmation note to the NARFE office, as asked of them in the July narfe magazine.

While these actions are necessary, they are not sufficient to defend the large federal family.

As our current and future members in the U.S. Postal Service deliver this issue, NARFE Advocacy Month is in full swing, with NARFE groups and individual members pledging to meet with lawmakers in their home states and districts. The congressional summer recess runs through September 8. The NARFE legislative staff (leg@narfe.org or 703-838-7760) is eager to help you find your representative’s district office and the nearest of your senators’ state offices. Faceto-face meetings require more effort and carry more clout than postal or electronic mail, and they are crucial to our success.

Finally, NARFE will use telephone calls to reinforce all prior actions at a critical moment. September 16-20 will be “NARFE National Call Congress Week” because it occurs close to the end of the fiscal year when debt-limit and appropriations brinksmanship might create the conditions for a “grand bargain” involving both ends of Pennsylvania Avenue. For more information, see page 9 of this issue.

A

s noted elsewhere in this issue, the Alzheimer’s Association recently presented its inaugural Jerome H. Stone Philanthropy Award for Alzheimer’s Research to the Zenith Society, of which NARFE is a member. The Zenith Society is a group of major donors to research aimed at finding a cure for Alzheimer’s disease. Congratulations to all of the NARFE members who have given and who continue to give so unselfishly to the NARFE-Alzheimer’s Research Fund!

It is nice to be honored for our good deeds, of course. But I’d like to recognize through this column some unsung heroes, the people who provide care to individuals suffering from Alzheimer’s. You may know such a caregiver, or perhaps you are or have been one yourself. I recently came across some statistics in the Alzheimer’s Association’s 2013 Alzheimer’s Disease Facts and Figures report that illustrate the toll that Alzheimer’s takes not only on its victims, but also on their families.

Here is what I discovered: • “More than 15 million Americans provide unpaid care for people with Alzheimer’s disease and other dementias.”

• “Unpaid caregivers are primarily immediate family members, but they also may be other relatives and friends. In 2012, these people provided an estimated 17.5 billion hours of unpaid care.”

• “This number represents an average of 21.9 hours of care per caregiver per week, or 1,139

hours of care per caregiver per year. With this care valued at $12.33 per hour, the estimated economic value of care provided by family and other unpaid caregivers of people with dementia was $216.4 billion in 2012.”

• “Eighty percent of care provided in the community is provided by unpaid caregivers (most often family members), while fewer than 10 percent of older adults receive all of their care from paid caregivers.

• “Caring for a person with Alzheimer’s and other dementias poses special challenges. For example, people with Alzheimer’s disease experience losses in judgment, orientation and the ability to understand and communicate effectively. Family caregivers must often help people with Alzheimer’s manage these issues. The personality and behavior of a person with Alzheimer’s are affected as well, and these changes are often among the most challenging for family caregivers. Individuals with dementia may also require

Alzheimer’s Update

caregivers deserve recognition, support

By Jane rodgers NARFE-alzheimer’s Chair

increasing levels of supervision and personal care as the disease progresses.”

• “For some caregivers, the demands of caregiving may cause declines in their own health.

Specifically, family caregivers may experience greater risk of chronic disease, physiological impairments, increased health care utilization and mortality than those who are not caregivers. Forty-three percent of caregivers of people with Alzheimer’s disease and other dementias reported that the physical impact of caregiving was high to very high.”

It is important that caregivers understand that they are not alone. The Alzheimer’s Association has an Alzheimer’s and Dementia Caregiver Center on its website, www.alz.org. It provides information and resources for caregivers at every stage of the disease. It facilitates message boards so caregivers can share insights. And it offers care training, consisting of workshops, e-learning courses, DVDs and books. The Alzheimer’s Association also operates a helpline, 24/7, for caregivers who need help or support. The helpline number is 800-272-3900.

We will all keep fighting and giving until we achieve a world without Alzheimer’s.

Jane Rodgers is chair of the NARFE-Alzheimer’s National Committee. email: ajrodgers@tds.net. w w w. n a r f e . o r g

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2013

2012

2013

2012

For the Record

Thrift Savings Plan Monthly Returns G FUND

F FUND

C FUND

S FUND

I FUND

AUGUST

0.11%

0.07%

2.25%

3.57%

3.29%

SEPTEMBER

0.10%

0.15%

2.57%

2.51%

2.96%

OCTOBER

0.12%

0.20%

(1.86%)

(1.31%)

0.85%

NOVEMBER

0.11%

0.16%

0.57%

1.53%

2.41%

DECEMBER

0.12%

(0.13%)

0.91%

2.69%

4.02%

JANUARY

0.13%

(0.56%)

5.18%

6.96%

4.45%

FEBRUARY

0.13%

0.51%

1.36%

1.00%

(0.99%)

The C, S and I Funds bounced back from their June declines with their biggest gains since January. Housing prices rose faster over the last 12 months than they have in seven years, consumer confidence hit its highest level in five years and U.S. stocks reached record highs. Despite tax increases and spending cuts (sequestration), the Gross Domestic Product grew at an annual rate of 1.7 percent during the second quarter, much higher than expected. The F Fund eked out a small gain for the first time since April.

March

0.13%

0.07%

3.75%

4.69%

0.88%

—by TRACEY RAY, chief investment officer of the Thrift Savings Plan

APRIL

0.12%

1.02%

1.93%

0.65%

5.32%

MAY

0.12%

(1.78%)

2.34%

2.71%

(3.12%)

June

0.14%

(1.53%)

(1.34%)

(0.99%)

(2.77%)

JULY

0.18%

0.13%

5.10%

6.88%

5.29%

YTD

0.94%

(2.15%)

19.64%

23.72%

8.98%

LAST 12 MO

1.50%

(1.71%)

24.97%

35.16%

24.50%

L INCOME

L 2020

L 2030

L 2040

L 2050

AUGUST

0.63%

1.57%

1.94%

2.23%

2.51%

SEPTEMBER

0.62%

1.52%

1.87%

2.12%

2.38%

(0.11%)

(0.45%)

(0.60%)

(0.71%)

(0.80%)

NOVEMBER

0.34%

0.77%

0.93%

1.06%

1.19%

DECEMBER

O.47%

1.19%

1.48%

1.69%

1.93%

JANUARY

1.10%

2.83%

3.56%

4.11%

4.63%

FEBRUARY

0.27%

0.41%

0.49%

0.54%

0.56%

MARCH

0.73%

1.69%

2.12%

2.44%

2.71%

APRIL

0.67%

1.58%

1.91%

2.13%

2.41%

OCTOBER

MAY

0.19%

0.33%

0.43%

0.51%

0.53%

JUNE

(0.30%)

(0.94%)

(1.20%)

(1.40%)

(1.59%)

JULY

1.21%

2.95%

3.72%

4.29%

4.83%

YTD

3.92%

9.13%

11.46%

13.20%

14.79%

LAST 12 MO

5.97%

14.23%

17.84%

20.58%

23.27%

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

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: 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.)

52

Funds rebound in july on improved economic news

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Countdown to COLA

T

he Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 0.3 percent in June. To calculate the amount of the 2014 cost-of-living adjustment (COLA), the indices of July, August and September 2013 will be averaged and compared with the 2012 third-quarter average of 226.936. That percentage increase, if any, determines the COLA. The June index of 230.002 is up 1.35 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. June’s index is 1.82 percent higher than the December 2012 base index of 225.889.

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

Month

CPI-W

Monthly % Change

% Change from 226.936

October 2012

227.974

-0.1

0.45

November

226.595

-0.6

-0.15

December

225.889

-0.3

-0.46

January 2013

226.520

+0.3

-0.18

February

228.677

+1.0

+0.77

March

229.323

+0.3

+1.05

April

228.949

-0.2

+0.89

May

229.399

+0.2

+1.09

June

230.002

+0.3

+1.35

July August September

Donate to NARFE Programs Support Alzheimer’s Research

Your charitable contribution is tax-deductible to the fullest extent allowed by law.

Write your chapter number on check; make it payable to: NARFE-Alzheimer’s Research

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

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

MasterCard Visa NARFE members contributed for If you have any questions, write to:

Discover AMEX Alzheimer’s research: $11 Million Fund National Committee Chair Card Number: Jane Rodgers, P.O. Box 234 Expiration Date: (mm)/ (yy) Wadesville, IN 47638-0234 *Total as of June 30, 2013 3-Digit Security Code: 100% of all contributed funds go to Name: (please print) Email: ajrodgers@tds.net

$10,413,221* Alzheimer’s research.

Signature

Join the Silver CIrcle Clip this contribution form and mail to: NARFE Silver Circle, 606 N. Washington St. Alexandria, VA 22314

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

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

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

/

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

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

Installment Plan Wall of Fame 12-month installment plan

Give to the Scholarship and Disaster Funds

Please mail coupon and check to: FEEA 3333 S. Wadsworth Blvd., Suite 300 Lakewood, CO 80227

/

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

State:

ZIP:

My check is enclosed

(Please make check payable to NARFE Silver Circle.)

Please charge my credit card Card type MasterCard Visa

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

Signature

Make check payable to: NARFE-FEEA Disaster Fund or NARFE-FEEA Scholarship Fund.

Date

YES!

Date

/

/

I would like to help with my contribution.

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

NARFE-FEEA Disaster Fund

Amount: $

NARFE-FEEA Scholarship Fund

Amount: $

Name: Address: City:

State:

ZIP:

NARFE News

NARFE President Joseph A. Beaudoin, fourth from left, joins representatives of other Zenith Society members onstage to accept the Jerome H. Stone Philanthropy Award for Alzheimer’s Research. The award was presented at the Alzheimer’s Association International Conference. The Zenith Society is made up of top Alzheimer’s research donors.

ALZHEIMER’S RECOGNITION

T

he Alzheimer’s Association has doin attended the conference and awarded its inaugural Jerome accepted the award for NARFE. H. Stone Philanthropy Award “I am proud to accept the award for Alzheimer’s Research to the Zegiven to the Zenith Society on nith Society, a group of major donors behalf of the thousands of NARFE that includes NARFE. members whose faithful individual The presentation was made July contributions over many years have 14 in Boston at the Alzheimer’s Asadded up to millions of dollars of sociation International Conference. support for Alzheimer’s research,” Life Membership Apl_New Design 3/26/13 3:49 PM Page 1 NARFE President Joseph A. BeauBeaudoin said.

NARFE members have raised more than $10 million for Alzheimer’s research since 1985.

Jerome H. Stone was the primary founder of the Alzheimer’s Association in 1980. In 1990, he created the Zenith Society, comprised of top philanthropists and major donors to Alzheimer’s research. The award was inaugurated this year as Stone marks his 100th birthday.

For chapter photos, see our Out and About Photo Gallery at www.narfe.org/narfemagazine.

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.

54

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2 013

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

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 1.

2.

3.

N A R F E M E M B E R S H I P A P P L I C AT I O N n YES. I want to join NARFE. n Mr. n Mrs. n Miss n Ms. Full Name ________________________________________ Street Address ____________________________________ Apt./Unit ________________________________________

I am a (check all that apply) n n n n n

Active Federal Employee Active Federal Employee Spouse Annuitant Annuitant Spouse Survivor Annuitant

n 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.

Choose Your Membership Type o Local Chapter Close-to-Home Membership — $45 Affiliation with the NARFE chapter closest to your home.

Receive narfe magazine each month; attend meetings, often with invited speakers; network; and get involved in grassroots lobbying efforts. $45 first-year dues X __________ = __________ Per Person # Enrolling Total Dues

PAYMENT OPTIONS n Check, Money Order or Bill Pay (Payable to NARFE) n Bill me (NARFE membership will start when payment is received.) n Charge my: n MasterCard n VISA n Discover n American Express Card No. _____________________________________

(First-year dues include national and chapter dues.)

Expiration Date _________ /_________

Chapter Affiliation (if known, otherwise enroll me in the chapter closest to my zIP code). Chapter #___ ___ ___ ___

Name on Card _________________________________

OR

Signature _____________________________________

o eNARFE Chapter Online Membership — $40

Date _________________________________________

NARFE’s electronic chapter. Receive narfe magazine by mail each month, and all other communications by email and on eNARFE.org. Get important updates and legislative action alerts, and have access to the eNARFE blog. $40 first-year dues X __________ = __________ Per Person # Enrolling Total Dues

mm

yyyy

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 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 ■ 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)

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

NARFE MEMBERSHIP INFORMATION

Street Address ___________________________________

NARFE Membership ID ____________________________________

Apt./Unit________________________________________ City _________________________ State _____ ZIP _____ Phone (__________) ______________________________ Email ___________________________________________ Date of Birth _________ /_________ / ____________________ dd

mm

yyyy

NARFE Chapter Number____________________________________

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

First-Ever! Thomas Kinkade

“Bringing Holiday C heer” Crystal Centerpiece Premiering our exclusive Always in Bloom™ floral arrangements

Presented in a faceted, genuine crystal vase bearing Thomas Kinkade’s holiday artwork

Shown much smaller than actual size of about 11 inches tall. Vase is appr.

6 inches tall. Requires 3 “AA” batteries (not included). AC adapter ready.

www.bradfordexchange.com/14845 © 2013 Thomas Kinkade ©2013 BGE 01-14845-001-BI

A Breathtaking Beauty

RESERVATION APPLICATION

SEND NO MONEY NOW

That is Always in Bloom Poinsettias are as much a part of our holiday traditions as gifts under the tree. Now, this symbol of holiday cheer will remain vibrant year after year with a first-of-a-kind masterpiece featuring the artistry of Thomas Kinkade.

The Thomas Kinkade “Bringing Holiday Cheer” Crystal Centerpiece features silken flowers and includes green holly leaves, white and red blossoms, with sprays of miniature red and gold metallic berry ornaments. A genuine crystal vase is graced by Thomas Kinkade’s beloved Home

for the Holidays imagery. Concealed within the vase, long-lasting LED lights add extra luminosity to both 9345 Milwaukee Avenue · Niles, IL 60714-1393 the art and the crystal. Additional YES. Please reserve the Thomas Kinkade “Bringing Holiday Cheer” Centerpiece for me as described in this announcement. lights nestled amid the blossoms Crystal Limit: one per order.

Please Respond Promptly also shine with a soft luminescence.

Exceptional value; satisfaction guaranteed Act now to obtain this treasure at the $99.99* issue price, payable in three installments of $33.33 each.

Send no money now. Just return the Reservation Application today!

Signature Mrs. Mr. Ms. Name (Please Print Clearly)

Address City State

Zip

01-14845-001-E40931 *Plus $14.99 shipping and service. Limited-edition presentation restricted to 150 firing days.

Please allow 4-8 weeks after initial payment for shipment. Sales subject to product availability and order acceptance.

Member Perks

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.

Credit Union

NARFE Premier Federal Credit Union 800-328-1500 www.NARFEpremierfcu.org As a member of NARFE, you have the privilege of joining NARFE Premier Federal Credit Union, which has been serving members since 1935. We offer extensive services at competitive rates to members nationwide. Your savings are federally insured to at least $250,000 and backed by the full faith and credit of the United States Government. For more information, call the number above, email jparish@narfepremierfcu.org or visit the website.

insurance

NARFE Insurance Services 800-233-5764 www.narfeinsurance.com Designed and administered by Marsh U.S. Consumer, a service of Seabury & Smith, Inc., exclusively for NARFE members: Senior Whole Life, Term Life, Medicare Supplements, Hospital Income Plan, Short Term Recovery Insurance, Pet Insurance, Accidental Death & Dismemberment, Cancer Care, Enhanced Dental Insurance and Long Term Care. Go to the website for more information on these programs.

GEICO 800-368-2734 NARFE members with good driving records may be eligible for quality automobile insurance from GEICO. Ask about the NARFE discount available to members in many states. Call today for your free, no-obligation rate quote. Be sure to mention that you’re a NARFE member!

• Discount amount varies in 58

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some states • Discount not available in all states or in all GEICO companies • One group discount applicable per policy.

Federal Long Term Care Insurance Program 800-LTC FEDS www.LTCFEDS.com Long-term care is expensive, and it’s not covered by traditional types of insurance plans. With benefits designed specifically for the federal family, the Federal Long Term Care Insurance Program offers a smart way to help protect your savings and assets, and remain independent should you need long-term care services someday. Visit LTCFEDS.com today.

Wyndham Hotel Group 877-670-7088 As a member of NARFE, you will 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.

Whether you are looking for an upscale hotel, an all-inclusive resort or something more cost-effective, we have the right hotel for you... and at the right price. So start saving now.

Call our special member-benefits hotline 877-670-7088 and reserve your room today at one of these fine hotels: Wyndham Hotels and Resorts®, Days Inn®, Ramada Worldwide®, Super 8®, Wingate By Wyndham®, Baymont Inns and Suites®, Hawthorn Suites® By Wyndham, Microtel Inns and Suites®, Howard Johnson®, Travelodge® and Knights Inn®.

Vacation rentals

Government Employees Travel Opportunities® 877-867-3639 www.getravelop.com/narfe Offers government employees, retirees and their families 7-night stays for only $349 on accommodations worldwide. Book online and save on your next vacation stay.

hotels

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

car rentals

Alamo Drive Happy® with Alamo® where NARFE members receive year-round discounts. Call 1-800-462-5266 and reference Contract ID 262544.

National You Drive A Hard Bargain. Receive up to 20% off rentals at National Car Rental. To make a reservation call National Car Rental at 1-800-CARRENT® and reference Contract ID 5282909.

Avis The employees/owners of Avis offer guaranteed low rates and quality services to members of NARFE. Call 800-331-1441 and mention ID# A991900.

narfe merchandise

NARFE General Store 855-99NARFE (855-996-2733) www.narfegeneralstore.com Official NARFE name badges, customizable logo products and plaques.

emergency services

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

Call MASA Today. It Could Save Your Life!

preventive health screenings, will conduct the following screenings using state-of-the-art ultrasound technology in your neighborhood: 1. Stroke/Carotid Artery 2. Abdominal Aortic Aneurysm 3. Atrial Fibrillation 4. Peripheral Arterial Disease.

You will receive a confidential written report within 21 days. Life Line Screening and NARFE encourage you to share these test results with your doctor. All four screenings cost just $135. To schedule an appointment, please call the number above and give the operator code number BKHN075 or visit the website. Coverage may vary and may not be available in all states.

hearing benefits Moving services

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

Bekins Van Lines 800-248-4810 www. narfe@bekins.com All NARFE members will receive discounted pricing for all interstate shipments. Discount will apply to packing and moving services and valuation protection. All intrastate shipments, local moves and international moves will be competitive based on your geographical location. Please mention you are a NARFE member and ask for Traci.

TruHearing 877-360-2442 Two discount programs to choose from: ValueAdd® or MemberPlus®. Similar to a warehouse membership, MemberPlus saves hundreds more for a $108 yearly membership. MemberPlus also includes: • 45-day, money-back guarantee on membership fee and all purchases • 48 batteries, 3-year warranty, and one-time loss and damage for 3 years (small manufacturer deductible applies) on each purchased hearing aid • Guest membership for up to four extended family members (siblings, parents, etc.) for only $79 each • Combine with an existing health plan hearing benefit to maximize savings.

education

Ivy Bridge College 877-615-9246 http://ivybridge.tiffin.edu/ narfe Want to earn your associate’s degree before you transfer to a four-year school? Ivy Bridge College offers a variety of degree programs that will help put you on the right track. No matter which program you choose, an education with Ivy Bridge will provide you with a solid foundation for a rewarding future. NARFE members and their families can enjoy an exclusive 5 percent savings on tuition at Ivy Bridge, a unique online institution that provides a highly supported pathway to a bachelor’s degree. To learn more, call or visit the website.

Visit TruHearingMemberPlus.com for more information, or call 877360-2442, Mon-Fri, 9 a.m.-9 p.m. ET.

NOT A MEMBER? health screening

GO ONLINE: It’s easy to join online at www.narfe.org. Click “Join NARFE.”

Life Line Screening 800-324-9906 www.lifelinescreening.com/ NARFE

TURN TO PAGE 55: Fill out the Membership Application and mail it to NARFE to receive all the perks of being a NARFE member.

Life Line Screening, America’s leading provider of community-based

Call (Toll-Free) 800-627-3394.

w w w. n a r f e . o r g

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59

The Way We Worked

When numbers were punched A census clerk uses a manual keypunch machine to create punchcards containing individual information from the 1940 census. An electronic card-sorting machine read the punchcard information and created the tabulations that were published as census statistics. In the 2010 census, census questionnaires were optically scanned.

Computers with optical mark- and character-recognition software transformed the written responses into numerical codes, which were available for tabulation.

Photo courtesy of the U.S. Census Bureau; David M. Pemberton, history staff, U.S. Census Bureau; 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. Website: http://shfg.org/shfg/.

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Did you know?

The first census was taken in 1790, shortly after George Washington became president. Congress created a permanent Census Office within the Department of the Interior in 1902. The next year, the Census Office was moved to the newly created Department of Commerce and Labor. Today, the Census Bureau is a part of the Department of Commerce.

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