September 2015 NARFE Magazine

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Federal spouse top 10 list

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self plus one: Is it for you?

COVER STORY

due process Bills Threaten to Undermine Civil Service Protections

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Volume 91 • Number 9

We’re In The Business Of Saving You More.

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Plus, every quote helps support NARFE.

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geico.com/fed/narfe 1-800-368-2734 | Local Office Some discounts, coverages, payment plans and features are not available in all states or all GEICO companies. Discount amount varies in some states. One group discount applicable per policy. Coverage is individual. In New York a premium reduction may be available. GEICO is a registered service mark of Government Employees Insurance Company, Washington, D.C. 20076; a Berkshire Hathaway Inc. subsidiary. GEICO Gecko image © 1999-2014. © 2014 GEICO

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WashingTon Watch

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Member Outrage Helps Stop Raid on TSP G Fund to Pay for Highways

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OPM Cyberattack Update

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Delay, Deadlock May Mean Year-End Drama

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Cosponsors Sought for GPO-WEP Repeal Bills in Senate and House

10 NARFE Bill Tracker 12 NARFE Supports New Rule on Investment Adviser Responsibility

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Columns Cover Story

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due process. Bills introduced in Congress in reaction to high-profile federal employee performance issues threaten to undermine civil service due process protections.

42 Managing Money

From the President

44 The Informed Citizen 46 Alzheimer’s Update DEPARTMENTS

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10 things a Federal spouse Should Know.

If you are, or were, married to a federal employee, you need to be aware of these 10 benefits issues.

14 Questions & Answers 48 For the Record: TSP

Investments, COLA Chart

50 NARFE News 56 The Way We Worked

On the Web visit us online at:

special section

www.narfe.org

40 Open Season Preview:

like us on facebook:

NARFE National Headquarters follow us on twitter:

@narfehq

Self Plus One

ON THE COVER

Illustration by Bill Pragluski, Critical Stages, LLC

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september 2015 | Volume 91 | Number 9

Editor Margaret M. Carter Assistant Editor Ken Fanelli Editorial Administrator Toni Vallario

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

Graphic Design Charlene Gridley Editorial Board Richard G. Thissen, Jon Dowie

Editorial Office: narfe magazine 606 North Washington St. Alexandria, VA 22314-1914 Phone: 703-838-7760 Fax: 703-838-7781 Email: communications@narfe.org Advertising Sales: Warren Berger Media People Inc. 122 East 42nd St., Suite 1622 New York, NY 10168 Phone: 212-779-7172, ext. 223 Email: wberger@mediapeople.com NARFE for the Visually Impaired On the Telephone: This publication can be heard on the telephone by persons who have trouble seeing or reading the print edition. For more information, contact the National Federation of the Blind NFB-NEWSLINE® service at 866-5047300 or go to www.nfbnewsline.org.

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

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

REGIONAL VICE PRESIDENTS

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

Here’s How to Contact Us… to join NARFE:

Call (toll-free) 800-627-3394 OR GO TO www.narfe.org To change your mailing address, phone number or email address:

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

REGION VI Marshall L. Richards (Arkansas, Louisiana, Oklahoma, Republic of Panama and Texas) Tel: 903-660-2784 Email: pappysdad@cobridge.tv REGION VII Rodney L. Adelman (Arizona, Colorado, New Mexico, Utah and Wyoming) Tel: 623-505-4719 Email: rvp7@narfe.org 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 Shackelford (Kentucky, North Carolina, Tennessee, Virginia and West Virginia) Tel: 703-830-6590, CELL: 703-201-6304 Email: rvp10@narfe.org

For any other NARFE matter:

Call NARFE Headquarters 703-838-7760, Email hq@narfe.org, Fax 703-838-7785, or 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 © 2015, NARFE. Advertisements in the magazine are not endorsements of products and/or services by NARFE, unless officially stated in the ad. We shall accept advertising on the same basis as other reputable publications: that is, we shall not knowingly permit a dishonest advertisement to appear in narfe, but at the same time we will not undertake to guarantee the reliability of our advertisers.

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From the President

Meeting challenges in 2015

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ven though this calendar year has another quarter to go, NARFE has accomplished much already with an

unusually full schedule and plate.

Legislatively, we were faced early in the year with an egregious fiscal year 2016 budget proposal in the House. Though the Senate budget proposal was not as bad, it was still harmful to federal employees and retirees. Thanks to the steadfast support of NARFE members who wrote, phoned and visited their legislators, we were able to make a real difference. Many of the proposals didn’t make it into the final budget.

We still have to be watchful, however, to ensure that cuts to federal employee and retiree compensation and benefits are not included in future legislation. They could be considered as “pay fors� in must-pass legislation such as the highway reauthorization bill or the measure lifting the debt ceiling.

This summer, the worst cybersecurity breach in American history occurred as information was stolen from databases of the Office of Personnel Management. This violation has created real problems and undue anxiety for almost every federal employee and many retirees. While retiree records were not breached, many former feds are affected because of employee management records included in the hack. And the theft of data in security clearance files has potentially exposed entire life histories of many government workers. This situation led to the resignation of the OPM director, and her head may not be the last to roll. From the first revelation of this crisis, NARFE has pressed for extended credit monitoring and identity theft protection.

Throughout this year, NARFE has moved forward with the strategic planning process. (If you have not weighed in with your comments and concerns, please do so at stratplan@narfe. org or by any other means that is comfortable for you.) This process is ongoing, and nothing has been finalized. That can occur only at a National Convention or through a referendum.

Times are changing, and NARFE must evolve, adapting in a way that encourages new and younger members to join while continuing to serve our existing members. To survive and thrive, NARFE needs everyone, not just some.

Richard G. Thissen NARFE national President natpres@narfe.org

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Washington Watch

Member outrage helps stop Raid on TSP G Fund to pay for highways

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lerted by NARFE Headquarters of a possible congressional raid on the Thrift Savings Plan (TSP) to pay for the reauthorization of the Highway Trust

Fund, thousands of NARFE members sent email messages and made phone calls to their senators, opposing the move.

“In the end, NARFE was victorious, and the provision did not appear in the transportation bill as a ‘pay-for,’” reported NARFE President Richard G. Thissen.

“We may have won this battle, but the war is still ongoing,” Thissen added. “Decisions on how to fund our nation’s infrastructure are far from being finalized. Additionally, this provision could rear its ugly head again in any mustpass piece of legislation.”

The proposal surfaced in July during Senate consideration of an extension of the Highway Trust Fund authorization, which expired on July 31.

The plan to target the TSP to pay for the bill originated in the fiscal year 2016 House Budget Resolution, but it was rejected in the final bill. It would have reduced the rate of return on the 6

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TSP G Fund and used the proposed savings to pay for the Trust Fund reauthorization. Specifically, it would have changed the rate of return on the G Fund from 2.25 percent annually to 0.02 percent.

TSP accounts are funded from the voluntary contributions of federal employees. Of the $458.3 billion invested in the TSP as of May 2015, roughly $193 billion was invested in the G Fund. Of the 4.7 million TSP participants, more than 4.3 million have all or some of their account balance invested in the G Fund. Reducing the rate of return to 0.02 percent would make investment in the G Fund worthless.

Sen. Orrin G. Hatch, R-UT, chairman of the Senate Finance Committee, called the idea “ingenious.” But in a letter to Hatch, NARFE Utah Federation President Marla Ramey said the plan would “degrade the retirement investments of dedicated public servants and veterans by $32 billion.” Ramey also said she found it “deplorable” that Hatch would support such a proposal.

NARFE President Thissen also sent a letter to the Senate, in which he said: “At a time when federal employees, retirees, job seekers and their families are reeling from news that their most personal information and financial data has been compromised, it is unconscionable that this very constituency would be targeted for cuts to pay for completely unrelated legislation.”

After the success of NARFE members’ advocacy blitz, Thissen thanked them for their quick action and said it is imperative they stay vigilant as funding bills continue to move through Congress.

—By Jessica Klement, Legislative Director

OPM CYBERATTACK UPDATE: ARCHULETA RESIGNS, SCOPE OF 2ND BREACH REVEALED

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n July 9, the Office of Personnel Management (OPM) and the Office of Management and Budget (OMB) revealed that 21.5 million individuals had been affected by the second of two cybersecurity incidents at OPM that compromised federal employees’ personal information.

The next day, OPM Director Katherine Archuleta resigned.

Beth Cobert, OMB deputy director for management, was named interim OPM director.

Those are the latest major developments in the massive cyberattacks at OPM first announced in June.

The first cyberattack, announced June 4, compromised the employment data of 4.2 million active, former and retired federal employees. An OPM contractor has notified the individuals affected by that breach.

The second cyberattack, announced June 12, compromised background investigation information.

In the July 9 announcement providing additional information about the second cyberattack, OPM and the interagency incident response team concluded with high confidence that sensitive information, including the Social Security numbers of 21.5 million individuals, was stolen from the background investigation databases. This includes 19.7 million individuals who applied for background investigations, and 1.8 million non-

applicants, primarily spouses or co-habitants of applicants, OPM said. Some records also include findings from interviews conducted by background investigators, and approximately 1.1 million include fingerprints.

Usernames and passwords that background investigation applicants used to fill out their background investigation forms also were stolen.

At press time, OPM had not yet selected the contractor that will notify individuals affected in this breach.

NARFE actions. Communications between NARFE, OPM’s interim director and the OPM team handling the breaches are ongoing. NARFE posts new information on the NARFE website as it becomes available.

To view all of the updates, go to www.narfe.org and click on the “OPM Security Breach Updates” banner.

NARFE appeared before Congress on July 8 to discuss NARFE members’ concerns about the data breaches. NARFE Federal Benefits Service Director David Snell testified before two subcommittees of the House Committee on Science, Space and Technology – the Subcommittee on Research and Technology and the Subcommittee on Oversight. Witnesses testified on the national security implications of the breaches, the effects on federal workers and retirees, and what can be done going forward to improve the federal

government’s cybersecurity.

“The federal government – including both the administration and Congress – now has an obligation to correct, to the best of its ability, what has transpired,” said Snell. “This should have started with effective communication with federal employees, retirees, others affected by the breaches and the organizations that represent them. Unfortunately, communication has fallen short of expectations.”

Snell’s complete written testimony, which was submitted to both subcommittees, is available on the NARFE website.

—By Jessica Klement, 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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Washington Watch

Delay, Deadlock may Mean year-end drama

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he scene already is being set on Capitol Hill for another end-of-the-year federal funding drama. Federal employee benefits, targeted already this year, could play a role.

In July, Republican leaders in Congress temporarily tabled action on reconciliation legislation originally scheduled for late July.

As a reminder, the conference report on the fiscal year (FY) 2016 budget resolution gave specific House and Senate committees a July 24 deadline to complete action on a reconciliation bill aimed at repealing the Affordable Care Act. It also appears increasingly unlikely that Congress will complete the 12 annual appropriations bills, which fund government operations, before the October 1 start of FY 2016. House Appropriations Committee Chairman Harold Rogers, R-KY, announced plans to move all 12 measures through the House by the summer recess but managed to get only six passed. Senate action has been stymied by Democrats, who have blocked consideration of all appropriations measures in protest over funding cuts. President Obama has threatened to veto any appropriations measure that embraces the Republican budget framework and adheres to sequestration-level funding.

Democrats are hoping that a yearend “Murray/Ryan-style” grand compromise will make additional dollars available to appropriators so that sequestration-level limits can be breached and program resources restored.

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Does Congress’ failure to get its appropriations work done by September 30 mean that we will be facing another government shutdown? Not likely. More likely: A stopgap continuing resolution will pass to fund government operations through the end of calendar year 2015, when a grand compromise could be on the table.

Also on the docket is the need to raise the public debt limit (the federal government’s authority to borrow in order to finance operations during a time of deficit spending). While Treasury Secretary Jack Lew’s borrowing authority technically expired in March 2015, higher government revenues and artful management of government resources delayed the need to extend the debt limit until late October. The debt-limit extension, one of the few pieces of must-pass legislation on Capitol Hill, could well be the vehicle for all of the outstanding fiscal matters left for later in the year.

The prospect of a historic December mega-bill of unprecedented proportions grows every day. Any grand compromise bill would almost certainly target the pay and/or benefits of federal employees and retirees. NARFE members must remain vigilant.

As October 1 looms, keep an eye out for action alerts from the Legislative Department, which can come with a moment’s notice.

NARFE members met the challenge in the G Fund fight (see story, p. 6). It won’t be the last fight we have this year.

—By Alan Lopatin, NARFE Legislative Counsel

MYTH vs.

REALITY Myth: The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which the Bureau of Labor Statistics (BLS) uses to calculate cost-of-living adjustments (COLAs), does not take into account gas, housing and medical care.

Reality: The BLS divides the several hundred items it analyzes into eight groups to calculate the CPI-W. These groups are: food and beverages, housing, apparel, transportation, medical care, recreation, education and communication, and other goods and services. Within these groups, the prices of gas, housing and medical care all are considered.

Households included in the CPI-W meet two requirements: More than half of the household’s income must come from clerical or wage occupations, and at least one of the household’s earners must have been employed for at least 37 weeks during the previous 12 months.

NARFE contends that this population is not appropriate to determine seniors’ spending. For example, health care accounts for 13 percent of expenditures by Americans over age 65, compared to 5 percent for all other age groups. A switch to the Chained CPI would be an even less accurate reflection, while the CPI-E, which NARFE supports, would provide the most accurate calculation.

Cosponsors sought for GPO-WEP Repeal bills in Senate and house

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ARFE is urging members partisan cosponsors. Rep. Rodney to ask their representative Davis, R-IL, introduced an identiand senators to cosponsor cal bill (H.R. 973) in the House in bills to repeal the Government February. The House bill has 115 Pension Offset (GPO) and Windbipartisan cosponsors. fall Elimination Provision (WEP).

The WEP greatly reduces the Proponents of the legislation are Social Security benefits of apseeking hearings on the bills this proximately 1.5 million individuals, including federal retirees, who year. A large number of cosponworked in Social Security-covered sors is vital for the measures to employment and who receive an see congressional action. annuity based on a non-Social Sen. Sherrod Brown, D-OH, introduced the repeal bill, the Social Security-covered government job. The GPO prevents more than Security Fairness Act of 2015 (S. half a million federal retirees who 1651), in the Senate on June 23.

2015-16_PAC_Coupon_2013 Coupon 6/8/15 1:28 PMa government Page 1 receive annuity As of mid-July, the bill had 16 bi-

based on their work in non-Social Security-covered employment from getting Social Security benefits based on their spouse’s work.

NARFE encourages members to contact their legislators and share their stories about how these provisions affect them personally by using the Legislative Action Center on the NARFE website, www.narfe.org, or by calling them using NARFE’s toll-free number to the Capitol, 866-220-0044.

Previous repeal efforts failed because of the bills’ high cost.

—By Carolyn Dorf, Legislative staff assistant

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Monthly contributions of $10 or more qualify you to receive the NARFE-PAC Sustainer lapel pin, along with a NARFE duffle bag.

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

NARFE Member #: ________________________________ Name: __________________________________________ Address: ______________________________________________________________________________________ City: ________________________________________________ State: ____________ ZIP: _________________ Only members of the National Active and Retired Federal Employees Association may contribute to NARFE-PAC. NARFE will neither favor nor disadvantage anyone based on the amount of a contribution or the failure to make a voluntary contribution to this political action fund. NARFE-PAC contributions are not deductible for federal income tax purposes.

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Washington Watch

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

ISSUE

Bill Number / Name / Sponsor H.R. 138: Access to Insurance for All Americans Act / Rep. Darrell Issa, R-CA Cosponsors: 0

HEALTH CARE H.R. 2175: FEHBP Prescription Drug Oversight and Cost Savings Act / Rep. Stephen F. Lynch, D-MA Cosponsors: 2 (D) H.R. 313: Wounded Warriors Federal Leave Act / Rep. Stephen F. Lynch, D-MA Cosponsors: 27 (D), 6 (R) SICK LEAVE FOR WOUNDED VETERANS

S. 242: Wounded Warriors Federal Leave Act / Sen. Jon Tester, D-MT Cosponsors: 1 (R)

H.R. 304: The Federal Adjustment of Income Rates (FAIR) Act / Rep. Gerald E. Connolly, D-VA

What Bill Would Do

Latest Action(s)

Repeals the Affordable Care Act and establishes a national health program administered by the Office of Personnel Management to offer Federal Employees Health Benefits Program plans to individuals who are not federal employees or retirees. It creates separate risk pools for federal and non-federal participants.

Referred to nine House committees

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

Referred to the House Committee on Oversight and Government Reform

Entitles any federal employee who is a veteran with a serviceconnected disability rated at 30 percent or more, during the 12-month period beginning on the first day of employment, up to 104 hours of leave, without loss or reduction in pay, for purposes of undergoing medical treatment for the disability for which sick leave could regularly be used. Requires the forfeiture of any of the leave that is not used during the 12-month period.

Approved by the House Committee on Oversight and Government Reform on 1/27/15

Provides for a 3.8 percent pay raise for federal employees in 2016.

Approved by the Senate on 7/28/15 narfe, March 2015

Referred to the House Committee on Oversight and Government Reform

Cosponsors: 73 (D)

Federal Compensation

S. 164: The Federal Adjustment of Income Rates (FAIR) Act / Sen. Brian Schatz, D-HI

Referred to the Senate Committee on Homeland Security and Governmental Affairs

Cosponsors: 6 (D)

narfe, March 2015

H.R. 485: Wage Grade Employee Parity Act / Rep. Matt Cartwright, D-PA Cosponsors: 9 (D), 3 (R)

NARFE’s Position: 10

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Support

Oppose

The president has the ability to provide a pay raise for federal employees on the General Schedule. He does not have the same authority for Wage Grade, or hourly, employees, whose raises must be authorized by Congress. H.R. 485 would give the president that authority.

No position

Referred to the House Committee on Oversight and Government Reform narfe, April 2015

ISSUE

Federal Compensation

Bill Number / Name / Sponsor H.R. 785: The Federal Employee Pension Fairness Act / Rep. Donna Edwards, D-MD Cosponsors: 22 (D) H.Res. 12: Expresses the sense of the House that the Postal Service should take measures to ensure continuation of six-day delivery / Rep. Sam Graves, R-MO Cosponsors: 164 (D), 46 (R)

What Bill Would Do Repeals laws passed in 2012 and 2013 that increased the Federal Employees Retirement System contributions for newly hired federal employees.

Referred to three House committees

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

Referred to the House Committee on Oversight and Government Reform

H.R. 784: Protect Overnight Repeals the service standards Delivery Act / Rep. Rosa implemented by the Postal Postal Reform DeLauro, D-CT Service on 1/5/15 and directs the Postal Service to reinstate Cosponsors: 99 (D), 3 (R) service standards in effect on December 31, 2011.

Campaign finance

Referred to the House Committee on Oversight and Government Reform

Referred to the Committee on Homeland Security and Governmental Affairs

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

Referred to three House committees

Cosponsors: 150 (D), 1 (R)

Cosponsors: 92 (D), 23 (R)

Reforms campaign finance laws to put small donors on par with wealthier donors.

Provides a tax credit for contributions and government matching contributions.

Repeals the Government Referred to the House Pension Offset (GPO) and the Committee on Ways and Windfall Elimination Provision Means (WEP).

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

Referred to the Senate Finance Committee

Cosponsors: 12 (D), 4 (R)

See story, p. 9

H.R. 2827: Competitive Service Act / Rep. Gerald E. Connolly, D-VA federal hiring

narfe, April 2015

S. 1742: Rural Postal Act of Returns to service standards 2015 / Sen. Heidi Heitkamp, of July 2012, preserves six-day D-ND delivery, puts two-year moratorium on plant closures, has Cosponsors: 3 (D) strong mitigation procedures for closures and reductions in hours of rural post offices.

H.R. 973: Social Security Fairness Act of 2015 / Rep. Rodney Davis, R-IL GPO/WEP

Latest action(s)

Cosponsors: 1 (R) S. 1580: Competitive Service Act / Sen. Jon Tester, D-MT Cosponsors: 2 (D), 4 (R)

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

Referred to the House Committee on Oversight and Government Reform

Approved by the Senate Committee on Homeland Security and Governmental Affairs on 6/24/15

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Washington Watch

narfe bill tracker

(Continued from p. 11) ISSUE

Paid parental leave

Bill Number / Name / Sponsor

What Bill Would Do

H.R. 532: Federal EmAllows federal employees six ployees Paid Parental weeks of paid leave for the birth Leave Act / Rep. Carolyn or adoption of a child.

Maloney, D-NY Cosponsors: 55 (D), 1 (R)

Latest Action(s) Referred to the House Committees on Administration, and Oversight and Government Reform narfe, May 2015

NARFE Supports Proposed rule on Investment adviser Responsibility

N

ARFE submitted comments in support of regulations that would help safeguard retirement savings, including those of federal employees and retirees. The regulations, proposed by the Department of Labor (DOL), would update the definition of “fiduciary investment advice” under the Employee Retirement Income Security Act (ERISA) to ensure individuals saving for retirement are protected by a “best interest” standard when receiving investment advice.

Under the current rule, the best interest standard does not apply to advice given on a one-time basis, advice regarding rollovers or any advice on investing in an individual retirement account (IRA). Instead, such advice is often subject only to an extremely weak “suitability” standard, which allows financial advisers to provide recommendations that serve their own interests instead of the clients’ – the adviser may receive a better commission, but the investor may be subject to excessive costs, poor performance and even unnecessary risk.

“NARFE is particularly concerned that federal employees and retirees invested in low-fee Thrift

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Savings Plan (TSP) funds are not currently adequately protected from bad financial advice regarding their TSP holdings,” NARFE President Richard G. Thissen explained in the Association’s comments, submitted in July.

“Because rollovers are not covered by the current definition of fiduciary investment advice, financial advisers may legally recommend that TSP account holders roll over their TSP holdings into an IRA, where the money could be invested in mutual funds providing the same, or essentially similar, products, such as an S&P 500 index fund, for as much as 50 times the cost,” Thissen said.

The lack of legal protection is having real-world implications for federal employees and retirees, he said. As reported by The Washington Post in August 2014, when a former federal employee (and pension expert) went undercover to seek advice regarding his TSP holdings, eight out of nine major investment firms told him to roll over his TSP funds into IRAs providing the same or similar investments as offered by the TSP for a substantially higher cost.

“That is the very definition of bad advice,” Thissen said. “Even

though it meets a ‘suitability’ standard, it only meets the needs of the adviser, not the investor.”

While there are some legitimate reasons to roll over TSP holdings into an IRA – such as higher tolerance for risk and investment in some asset types not available in the TSP funds – in most cases, federal employees and retirees are better off leaving their money in the TSP, Thissen pointed out.

Yet, more than 50 percent of TSP participants removed their funds from the TSP within a year of when they separated from service, according to the latest report by the Federal Retirement Thrift Investment Board. “That number is worrisome given the low costs of TSP investments, and it speaks to the prevalence of the bad advice that federal employees and retirees are receiving,” Thissen said.

The comment period for the proposed rule ended on July 21, and the Department of Labor’s Employment Benefits Security Administration scheduled public hearings from August 10 through 13 (after this issue of narfe magazine went to press) to gather input from the public and other stakeholders.

—By John Hatton, Deputy Legislative Director

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T

he sun rises and sets at peak travel periods, during the early morning and afternoon rush hours and many drivers find themselves temporarily blinded while driving directly into the glare of the sun. Deadly accidents are regularly caused by such blinding glare with danger arising from reflected light off another vehicle, the pavement, or even from waxed and oily windshields that can make matters worse. Early morning dew can exacerbate this situation. Yet, motorists struggle on despite being blinded by the sun’s glare that can cause countless accidents every year.

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Questions & Answers

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

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

employees TSP Withdrawals if employed past age 70½

Q

Is there a deadline by which I must start withdrawing money from my Thrift Savings Plan (TSP) account if I am still working for the federal government when I reach age 70½?

A

Yes, there is a deadline to which you must adhere.

If you are not separated from federal civilian service when you reach age 70½, you can continue to contribute to your TSP account until you separate from federal service. By April 1 of the year following the year you separate from federal service, you must: withdraw your entire TSP account balance in a single payment, begin receiving monthly payments, purchase a life annuity or use a combination of these withdrawal options.

For example, if you are age 74 and separate from service on December 31 of this year, you would be required to begin withdrawals 14

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from your TSP account, using one of the options above, no later than April 1, 2016.

Persons who are separated from federal service when they reach age 70½ must begin taking required minimum distributions from their TSP accounts beginning in the year they turn 70½.

annuity reduction for survivor benefit

Q

I am an active federal employee under the Civil Service Retirement System (CSRS). If I elect the full survivor annuity for my spouse, how much would be taken from my annuity each month to pay for this?

A

If you elect the full survivor annuity, your spouse’s survivor annuity would be 55 percent of your unreduced basic annuity. To pay for this benefit, your annuity would be reduced by 2.5 percent of the first $3,600 in gross annuity and 10 percent of the remainder of your gross annuity.

As a CSRS employee, you could elect a less-than-full survivor annuity (55 percent of a selected base) or no survivor annuity at all. However, you would have to have the consent of your spouse to elect either a less-than-full or no survivor annuity.

Retiring after LWOP

Q

I have enough working years to retire, but I’d like to leave work at the end of October, take two months of leave without pay (LWOP) and retire at the end of the calendar

year without returning to work.

Can I do that and retire on an immediate annuity?

A

Yes. An employee may apply for voluntary retirement at any time and specify the effective date of the separation in the application, provided the eligibility requirements are met. If you have the required time in service and have met the age requirements for an immediate annuity, you may retire after a period of LWOP. However, keep in mind that your annuity commencing date will be the day after your last day of pay. Also keep in mind it is up to your supervisor to grant you LWOP.

retirees What are the chances of a 2016 COLA?

Q A

Will retirees be getting a cost-of-living adjustment (COLA) in our annuities for 2016?

We can’t predict, but as of now (July), chances look slim that federal and military retirees and Social Security beneficiaries will receive an increase in benefits for 2016 based on the year-to-date averages of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The CPI-W for June was 233.804, 0.19 percent lower than the average CPI-W for the third quarter of 2014, which was 234.242. The 2014 third-quarter average is the reference figure

for determining the 2016 COLA. (See p. 48 in this issue for more information on how the COLA is determined.)

FEGLI insurance policy HAS NO cash value

Q A

Can I cash in my life insurance policy with the federal government so that I can buy a whole life policy?

Generally, no. The life insurance benefit provided by the government to its employees, the Federal Employees’ Group Life Insurance (FEGLI), has no cash value.

There are provisions in the law that allow insured individuals to elect to receive their Basic insurance as a living benefit if they are terminally ill with a life expectancy of nine months or less.

Medicare’s late enrollment penalty

Q

I received notice of my Part B premium, and, by my calculation, this amount includes an 80 percent late enrollment fee. I understood that I would not be subject to the late enrollment fee because I have maintained continuous health insurance coverage under the Federal Employees Health Benefits Program (FEHBP). Since I was too young to qualify for Medicare at my retirement, I thought the exception to the late enrollment fee would apply. If I am eligible for the exception, what steps should I take to get this situation rectified?

A

Under the Social Security law, if you are age 65 and delay enrolling in Medicare Part B, you will be subject to a 10 percent surcharge for every 12 months you were not enrolled in Part B and could have been.

One of the exceptions to this penalty says that if you are covered as an employee by an employer’s group health plan or covered as a dependent under an employed spouse’s employersponsored group health plan, you will not be subject to the 10 percent penalty until either you retire or your spouse retires.

You then will have an eightmonth special enrollment period to enroll in Medicare Part B without being subject to the late enrollment penalty.

If you are a retired federal employee and have continued health insurance coverage under the FEHBP, you are still subject to the late enrollment penalty if you did not sign up for Part B when you were first eligible. As a retiree, you are no longer considered to be an employee covered by an employer group health plan but are now covered as a retiree by a retirement system group health plan.

For more information, see the “Medicare and You” booklet regarding the late enrollment penalty and special enrollment period for Part B. Medicare sends this booklet (electronically or by postal mail) to all Medicare households each September. The 2015 version is available at www.medicare.gov/ pubs/pdf/10050.pdf.

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Questions & Answers

ing the annuitant is responsible for acting in the annuitant’s best interests by using the payments to benefit the annuitant, authorizing the correct withholding of federal income tax from the annuity, and selecting the federally sponsored health benefit coverage for the annuitant when applicable. When a family member or friend contacts OPM regarding an annuitant who is unable to handle his or her benefits, OPM gives them full instructions on what to do to take care of the retirement benefit for the annuitant. The annuity does not count as taxable income for the representative payee.

Representative payee and income taxes

Q

My brother, who was disabled before age 18, receives a Civil Service Retirement System survivor annuity, as both of our parents are deceased. I receive the benefit as his representative payee. Does his annuity count as my income for tax purposes?

A

No, it does not. The Office of Personnel Management (OPM) has the authority to make payments to a representative who is willing to act on behalf of an annuitant.

In addition to receiving annuity payments, the person represent-

no deferred benefits if funds withdrawn

Q

I am trying to assist a former federal employee who withdrew her retirement contributions upon leaving her federal job. Is she eligible for deferred retirement when she turns age 62 if she pays back the refunded contribution with interest and penalty? If she files a SF-2803 to make the deposit, how can she find out how much her monthly annuity would be?

A

Unfortunately for the former employee, her decision to take a refund of all of her civil service retirement contributions ended her eligibility

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Questions & Answers

for a future monthly annuity. The Office of Personnel Management states: If you get a refund of your retirement contributions now, you will no longer be eligible to receive monthly payments when you reach retirement age, unless you are later re-employed subject to the Civil Service Retirement System or the Federal Employees Retirement System.

If the individual is again employed in federal service in a position subject to retirement contributions, she can then apply to make a deposit of the retirement contributions she had refunded to her and once again be eligible for a monthly annuity.

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How to drop Medicare Part D Enrollment

Q A

I have done some research and want to drop my Medicare Part D drug plan. How do I do this?

If you want to drop your Medicare Prescription Drug Plan (Part D) and you don’t want to join a new plan, you can do so during the Medicare Open Enrollment Period, October 15-December 7 each year. The change goes into effect January 1 of the following year. To disenroll from a Medicare Prescription Drug Plan during the Medicare Open Enrollment Period, you can do one of the following:

• Call 800-MEDICARE (800633-4227); • Mail or fax a signed written notice to the plan telling them you want to disenroll; • Submit a request to the plan online, if it offers this option; or • Call the plan and ask it to send you a disenrollment notice. You’ll have to complete, sign and send the notice back to the plan.

TAxing annuities in North Carolina

Q

I received a letter from the North Carolina Department of Revenue assessing me additional taxes on my federal retirement income. I responded by

4/15/14 1:28 PM

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“Perhaps the best quality-toprice ratio in the hearing aid industry” — Dr. Babu, M.D. Board-Certified ENT Physician

Dr. Cherukuri knew that untreated hearing loss could lead to depression, social isolation, anxiety, and symptoms consistent with Alzheimer’s dementia.

He could not understand why the cost for hearing aids was so high when the prices on so many consumer electronics like TVs, DVD players, cell phones, and digital cameras had fallen.

Since Medicare and most private insurance do not cover the costs of hearing aids, which traditionally run between $2,000-$6,000 for a pair, many of the doctor’s patients could not afford the expense. Dr. Cherukuri’s goal was to find a reasonable solution that would help with the most common types of hearing loss at an affordable price, not unlike the “one-size-�its-most” reading glasses available at drug stores.

He evaluated numerous hearing devices and sound amplifiers, including those seen on television. Without fail, almost all of these were found to amplify bass/ low frequencies (below 1000 Hz) and not useful in amplifying the frequencies related to the human voice.

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Questions & Answers

NARFE at Your Service referencing a 1989 U.S. Supreme Court decision; the 1998 Bailey v.

State of North Carolina decision by the North Carolina Supreme Court; and the intergovernmental tax immunity doctrine codified in 4USC 111. I wonder how many other retired federal employees received the same letter.

A

We have not received any similar complaints from members regarding their federal annuity income being taxed in North Carolina. In the April 2015 edition of narfe magazine (p. 37), we noted that, pursuant to the North Carolina Supreme Court’s decision in Bailey v. State of North Carolina, North Caro-

lina may not tax certain benefits received by federal, military or state retirees if the retiree has five or more years of creditable service as of August 12, 1989. We went on to say that as of 2014, North Carolina no longer has a deduction available to taxpayers with fewer than five years of creditable service as of August 12, 1989, and/or service after August 12, 1989.

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

800-456-8410.

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

www. narfe.org.

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Attacks ON Due Process Undermine Civil Service Protections

For many federal employees, an attractive feature of the federal civil service has been its relative stability. Federal agencies seldom go out of business. The work of federal employees is important and must be done. And federal employees are insulated from undue political influence by But Congress is proposing to change the rules for managing the federal workforce. Legislation enacted last year aimed to make it easier to terminate or demote Senior Executive Service (SES) leaders in the U.S. Department of Veterans Affairs (VA) on an expedited basis with reduced procedural protections. And legislation recently passed by the House of Representatatives would reduce the due process protections of all VA employees, not just senior executives, by allowing eased terminations for poor performance or misconduct. Another bill recently passed by the House would allow eased termination of Internal Revenue Service (IRS) employees accused of targeting individuals or groups based on their political beliefs and for other purposes. A third bill would reduce due process and merit system principles protections for Department of Defense (DOD) civilian employees.

By David Tobenkin

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Illustration by Bill Pragluski, Critical Stages, LLC

long-standing civil service due process protections.

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

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undermine Civil Service Protections With legislation to reduce civil service protections under consideration for the VA and DOD, which together employ roughly half of all federal civilian employees, actions challenging due process protections of much of the federal civil service are already in play.

Some say that a tipping point has been reached where there is now a credible possibility that Congress could pass legislation that would allow expedited terminations of a large segment of federal civilian employees in the not-too-distant future.

“There is no pending legislation to make all federal employees at-will employees who can be let go without cause with little notice or recourse,” says Jeffrey Neal, a senior vice president for ICF International and formerly chief human capital officer for the Department of Homeland Security. “It is such a bad idea, given that it would likely lead to the spoils system that led to the current protections for federal employees, that I think even the people who would like to do it are hesitant to try to put it in place. But it is not beyond the realm of possibility; whereas 10 years ago, I would have said that it is beyond the realm of possibility.”

Patricia Niehaus, national president of the Federal Managers Association (FMA), concurs, saying, “I am extremely concerned that [atwill employment for federal employees] is the direction Congress is headed.” Niehaus and others add that such legislation is unnecessary because the tools to address problem employees already exist, if managers would use them.

A CHECK AGAINST CORRUPTION

Civil service protections were adopted through the Pendleton Act of 1883 as a check against corruption in the federal ranks. Previously, there was a prevailing spoils system whereby the party in power would use terminations and hiring authorities to stuff the federal payrolls with sympathizers likely to conduct federal work in a manner favoring that party or a particular politician and to reward the party faithful.

To address these issues, the Pendleton Act created a classified civil service based upon capacity and fitness for the job and open competitive examinations of candidates. Later presidential dictates and U.S. Supreme Court decisions

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extended civil service protections to removals, including requiring that there be cause for removal, written charges, notice of the charges and an opportunity for the affected employee to defend himself or herself. The federal Civil Service Reform Act of 1978 codified the procedures most agencies use today to remove or discipline federal employees, with certain agencies excepted by law.

Under Chapter 75 (Adverse Actions) of Title 5 (Government Organizations and Employees) of the U.S. Code of Federal Regulations, an agency may implement an adverse action – up to and including removal – for such cause “as will promote the efficiency of the service.” Before an agency imposes a suspension for more than 14 days, a change to lower grade, a reduction in pay or a removal action, an employee is entitled to: • At least 30 days’ advance written notice, unless there is reasonable cause to believe the employee has committed a crime for which a sentence of imprisonment may be imposed, stating the specific reasons for the proposed action; • A reasonable time, but not less than seven days, to answer orally and in writing and to furnish affidavits and other documentary evidence in support of the answer; • Representation by an attorney or other representative; and • A written decision and the specific reasons at the earliest practicable date.

The law also provides that once those serious adverse actions have been taken, the employee is entitled to file an appeal with the Merit Systems Protection Board (MSPB). Many employees covered under collective bargaining agreements also may be entitled to pursue grievances instead of going to the MSPB. There also is a separate set of procedural requirements for removals under Chapter 43 of Title 5 with some similarities to those under Chapter 75, which requires providing the employee the same formal due process to contest a removal based on performance issues provided he or she has had an opportunity to improve performance.

In addition, the Supreme Court has determined that public employees have certain due process rights under the U.S. Constitution before they can be removed from their jobs. This concept is more fully explained in a May 2015

MSPB report to the president and Congress titled “What is Due Process in Federal Civil Service Employment?”

“Supreme Court cases and other precedents show clearly that federal employees are not ‘at will’ when they become career civil servants,” says Cheri Cannon, a partner at the federal employment law firm of Tully Rinckey, PLLC. “They have certain rights prior to being deprived of a job or pay.”

As a consequence, many federal employees have greater job security than employees in the private sector, where the ability to fire employees at will – with little or no cause and procedural protections, save for prohibitions against certain impermissible discrimination – is the prevailing norm. And that relative advantage is particularly significant to these employees, given that federal employees are among a steadily declining group of employees nationwide who are entitled to defined-benefit pensions calculated on the number of years served.

A February 2015 Government Accountability Office (GAO) report on options for addressing poorly performing federal employees found that in 2013, federal agencies dismissed around 3,500 employees, representing 0.18 percent of the career, permanent, civilian workforce, for performance or a combination of performance and conduct, with most dismissals taking place during probationary periods.

WINDS OF CHANGE

Many have tried to alter the status quo. Efforts to ease the firing of federal employees who are poorly performing or engaged in misconduct have been components of many federal workforce reform proposals, though implementing them has proven to be challenging. Capitol Hill gridlock has lessened the likelihood of legislation to bring about such changes.

But over the past several years, a perfect storm has increased the odds of action. First, there is widespread support on Capitol Hill for reducing the size of the federal workforce and to make fundamental changes to the federal workforce structure. Having a single party in control of both Houses of Congress with power over the committees that oversee the federal workforce and large agencies, such as the VA, has increased

the odds that legislation reducing civil service protections can be passed by Congress.

But more significantly, high-profile performance issues at federal agencies have provided an impetus to make changes. The most notable of these scandals involved the distortion of treatment records and long waits for medical services at VA facilities and some IRS employees’ alleged targeting and extra scrutiny of special political interest groups seeking tax-exempt status. The first concerned poor treatment for a sympathetic class of injured parties – military veterans; the second revolved around alleged harm to highly motivated members of one political party.

Bipartisan outrage at these incidents has led to narrow congressional action targeting both of those particular agencies. Not surprisingly, passage of legislation targeting individual agencies and employees who work at them accused of serious managerial or programmatic shortcomings is proving far more administratively and politically feasible than undertaking the unwieldy task of overhauling the entire civil service. Once such actions take place at one agency – such as the VA – or against one class of federal employees – such as SES agency executives – chips in the armor of civil service protections emerge, and further changes become more politically feasible, some observers note.

“The SES are canaries in the coal mine,” says Carol Bonosaro,

High-profile performance issues at federal agencies have provided an impetus to make changes. w w w. n a r f e . o r g

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undermine Civil Service Protections president of the Senior Executives Association (SEA). “For well over a year, SEA has sounded the alarm to the federal workforce community that provisions initially targeting the SES would be broadened to the workforce.” The staff of Rep. Jeff Miller, R-FL, chairman of the House Committee on Veterans’ Affairs, told the SEA that it will continue pushing for changes to civil service protections, Bonosaro says, and it has. “Yet with few others willing to raise red flags about poorly crafted legislation explained as benefitting veterans and ensuring accountability of VA employees, these efforts will be difficult, if not impossible, to slow down.”

NARROW Law WITH BROAD IMPLICATIONS

Last year’s passage of the Veterans Access to Care through Choice, Accountability and Transparency Act allows for swifter termination of VA senior executives by reducing their civil service protections. The law allows the Secretary of Veterans Affairs to fire or demote senior executives for performance and gives SES members so terminated only seven days after termination to appeal to the MSPB. An MSPB administrative judge is allowed 21 days to process a case and issue a ruling, which compares to an average of 120 days to adjudicate other types of cases. If the MSPB administrative

Civil service reform could include changes to employee removal processes.

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judge does not issue a ruling within 21 days, the VA Secretary’s decision becomes final.

The law also eliminated the possibility of a secondary appeal of the MSPB administrative judge’s decision to the presidentially appointed, Senate-confirmed, three-member board at MSPB headquarters in Washington, DC, thereby making the MSPB administrative judge’s decision final. The law further prohibits any appeal to a United States federal court.

MSPB Chairman Susan Tsui Grundmann says the new requirements have proven challenging to the MSPB administrative judges who must process VA SES removal cases. “This places incredible pressure on the MSPB administrative judges, who want to be as thorough as possible, especially in appeals involving removals from the federal civil service,” Grundmann says. “We have seen that our MSPB administrative judges, and numerous other employees in our regional and field offices, are working literally around the clock to get everything done within 21 days, including issuing a final written decision.”

In April, House Veterans Affairs Committee Chairman Miller introduced the VA Accountability Act of 2015 (H.R. 1994), which would make it easier to demote or terminate all VA employees, not just senior managers, by permitting the VA Secretary to remove any VA employee based on poor performance or misconduct. It would allow the affected employee seven days from his or her removal to file an appeal to the MSPB and would require a ruling by the MSPB within 45 days of the appeal filing. It also would extend a probationary period for new VA employees from one year to 18 months. The bill, which passed the House in July, has garnered support from several veterans groups. But President Obama has threatened to veto it on due process grounds.

Also in April, the House approved the Prevent Targeting at the IRS Act (H.R. 709), introduced by Rep. James B. Renacci, R-OH, which authorizes the IRS to terminate employees who target individuals or groups based on their political beliefs.

EMPLOYEE ADVOCACY

Some organizations are challenging the legislation. The SEA deplored the 2014 VA legislation and is leading a campaign to mitigate attacks on

due process in the 2015 VA bill. An August 2014 survey of 476 employed and retired SEA members determined that at-will legislation would politicize the SES cadre (according to 86.5 percent of currently employed SES respondents), while 83.5 percent disagreed with the assertion that passage and enactment of employment-at-will legislation would “improve retention of current career senior executives and senior professional employees.”

SEA’s Bonosaro wrote to Miller suggesting changes to H.R. 1994. Unions also have criticized the bill. “NTEU opposes attempts by some in Congress to end or weaken civil service protections for the federal workforce,” says National Treasury Employees Union President Colleen M. Kelley. “The U.S. Supreme Court ruled in 1985 that the Constitution guarantees due process for federal employees. Proposals like H.R. 1994 would needlessly chip away at constitutionallyprotected due process and discourage whistleblowers from coming forward. Employees would have little incentive to blow the whistle when they see their colleagues being removed without being given the chance to undergo independent reviews. NTEU also opposes proposals aimed at Internal Revenue Service employees. They are unnecessary because current rules and procedures give IRS managers ample tools to address personnel matters.”

Many question the constitutionality of the new law. “I think it is fair to say that the 2014 VA Act, at the very least, raises significant constitutional concerns,” the MSPB’s Grundmann says. “The Supreme Court has made clear that federal employees have a property interest in their employment, and thus are entitled to preadverse action due process rights. The 2014 VA Act would allow the VA Secretary to remove a VA SES employee without providing any pre-removal due process.” Given what the Supreme Court has said in the past, Grundmann says she was not surprised to hear that, despite the statutory language of the 2014 VA Act, the VA is providing some pre-removal rights to SES employees.

Another constitutional concern she has is that the 2014 VA Act removes the three-member MSPB board completely from the adjudication process. “As a result, we have MSPB administrative judges – who are federal employees under

the GS System – making final decisions on behalf of a federal agency instead of the board members, who are presidentially appointed, Senate-confirmed officers of the government.

This could very well be a violation of the Appointments Clause contained in Article II of the Constitution.”

The VA has begun using its new authority under the 2014 legislation, and four appeals of adverse actions have been made to MSPB offices.

One VA SES executive removed from her position has challenged the constitutionality of her termination. In April, Sharon Helman filed a petition in the U.S. Court of Appeals for the Federal Circuit seeking review of the MSPB administrative judge’s decision affirming the agency’s removal, in part on constitutional grounds.

CIVIL SERVICE REFORM

Many voices in Washington agree that major civil service reform is needed generally, and such reform could include changes to employee removal processes. The Partnership for Public Service (PPS), a leading advocate for reforming the civil service system, issued a report last year outlining a framework to improve the management and performance of the federal workforce across government. But even that group criticized the Senate version of the VA legislation (Increasing VA Accountability to Veterans Act of 2015, S. 290).

“The reforms being promoted in some of the bills before the Senate Veterans Affairs Committee will do more harm than good,” noted PPS President Max Stier in June testimony before the Senate Committee on Veterans Affairs. He criticized the 45-day MSPB review timetable as overly rapid and unnecessary and voiced his disapproval of removing appeals rights to the courts. “Rather than simply finding ways to fire federal employees faster, the focus of legislative reform must be on how we can serve our veterans better. There are a number of ways to reform our system and improve service to the veteran community, but moving to an ‘at-will’ employment system for the Department of Veterans Affairs is not one of them.”

“The current system, as written in the statute, isn’t broken,” says FMA’s Niehaus. “It just isn’t being used as it was written.” She says that improved training and support for managers is

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undermine Civil Service Protections needed. “As I noted in recent testimony before Congress, managers need to have time to manage, instead of being technicians. Management should be a profession in the federal government, rather than an additional duty. Investments must be made in training in areas such as addressing poorperforming employees appropriately, enhancing mentoring skills and conducting accurate performance appraisals in order to recognize problems early and deal with them appropriately at the lowest possible level.” Niehaus also says many federal managers complain that they cannot get removals approved through their legal offices because of agency attorneys who are concerned about potential legal risks posed by such adverse actions.

ICF’s Neal says reforms that ease firings at agencies with crises are not useful because they do not address underlying problems. “They will be used the wrong way ... by political appointees 2015_Cong_Dir_Ads_half page 2/23/15 11:06 AM Page 1 to fire career civil servants as scapegoats for the

problems. When you have a systemic problem at an agency, the solution is not to lop off a few heads – you don’t fix the problem by scaring people.

You have to get at what is causing the underlying problem and deal with that. Otherwise, it is likely those you hire to replace those fired will just adapt to the problematic agency culture.”

One former VA senior nonexecutive employee who left the agency several years ago and who now consults on VA matters agrees: “The problem at the VA is an unwillingness of the people running departments now to make unpopular decisions. I removed numerous problematic employees during my years at the agency; but for the most part, the atmosphere at the VA is nonconfrontational. Problematic practices and employees are not addressed. Reducing due process protections doesn’t get at those issues.”

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

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10 things spouse toP

should know about

benefits

By Tammy Flanagan

The next best thing to being a federal employee is being married to one! Being the spouse of a federal employee or retiree provides valuable insurance benefits, a stable retirement, and protection from unforeseen and costly life events.

I should know. In addition to specializing in helping federal employees understand their benefits and transition to retirement, I am the spouse of a just-retired federal employee who served 35 years as a federal law enforcement officer.

Here are 10 important things you should know about if you are – or were – married to a federal employee or retiree:

1

Retirement Benefit

Your spouse will be entitled to a retirement benefit after as little as five years of civilian federal employment. The value of this benefit, sometimes referred to as a pension or annuity, is based on a calculation of federal service and average salary: • Under the Federal Employees Retirement System (FERS), which generally covers those hired on or after January 1, 1984, the benefit is usually computed at 1 percent times the high-three years’ average salary times service, but 1.1 percent is used if the employee retires at age 62 or older with at least 20 years of service.

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FspouseS • Under the Civil Service Retirement System (CSRS), which covers most employees hired before 1984, the computation is 1.5 percent of the high-three for the first five years, then 1.75 percent for the next five years, and finally 2 percent of the high-three for the years and months of service beyond 10 years. (Here’s a computation shortcut: Multiply the high-three average salary by length of service times 2 percent, then subtract 3.75 percent. The formula looks like this: length of service x .02 - 0.375.)

There are more generous computations used for federal law enforcement officers, firefighters and some other special groups. The government deducts a mandatory retirement contribution toward this benefit from employees’ salaries.

Retirement benefit estimates are available through your spouse’s human resources or payroll office. Here is an example of how the computation works out: After 30 years of service, the CSRS retirement benefit would be 56.25 percent of the high-three; under FERS, this benefit would be 30 percent or 33 percent, depending on the employee’s age at retirement.

Employees who resign from federal service before becoming eligible for an immediate retirement can get a deferred retirement depending on their retirement system and how much service they had when they left federal service, as long as they do not apply for a refund of their retirement contributions. But they do not get lifetime continuation of their insurance benefits.

CSRS and FERS retirement benefits are administered for most federal retirees by the Office of Personnel Management (OPM). Learn more about immediate and deferred retirement benefits at www.opm.gov/retire.

2

Death Benefit

If you are the spouse of a federal employee, benefits are payable to you if your spouse dies before retiring from federal service. Under CSRS, the surviving spouse of a federal employee who has completed at least five years of service would receive a lifetime survivor benefit equal to 55 percent of the employee’s earned retirement, computed as if the employee had retired on the date of his or her death. Under FERS, surviving 32

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At retirement, the “default” election for a married employee is the maximum spousal survivor benefit. spouses generally receive a lump-sum benefit of $32,326.58 (2015 rate) plus 50 percent of the employee’s final annual salary (or high-three average salary, if higher). If the employee had completed 10 years of federal service, a surviving spouse would receive a survivor annuity equal to 50 percent of the employee’s earned FERS benefit plus the lump sum. Learn more at www.opm.gov/ retirement-services/csrs-information/survivors/ (CSRS) and www.opm.gov/retirement-services/ fers-information/survivors/ (FERS).

At retirement, the “default” election for a married federal employee provides his or her spouse the maximum spousal survivor benefit. To elect a less-than-full benefit, the retiring employee must have the notarized consent of the spouse. Whether or not to take a reduced retirement to provide a survivor annuity is the most important issue an employee considers when planning for retirement.

To provide a survivor benefit, the retiree’s annuity is reduced. For example, let’s say the retirement benefit for an employee under CSRS is $60,000. To provide the maximum survivor benefit, that benefit would be reduced by $5,730, cutting the annual benefit to $54,270. The survivor annuity would be 55 percent of the retiree’s unreduced annuity of $60,000, or $33,000 annually. For an employee under FERS whose retirement benefit is $30,000, the reduction to provide the maximum survivor benefit would be $3,000, cutting the benefit to $27,000. The survivor annu-

ity would be 50 percent of the unreduced annuity of $30,000, or $15,000 annually.

For a spouse to continue health benefits under the Federal Employees Health Benefits Program (FEHBP) if the federal retiree dies first, the spouse must receive a survivor annuity in some amount. An employee can elect a partial survivor benefit to protect a surviving spouse’s eligibility to continue FEHBP coverage. A partial FERS survivor benefit provides 25 percent of the retirement benefit for a reduction of 5 percent. A partial CSRS survivor benefit can be made of any amount expressed as 55 percent of $______, up 55 percent of the full CSRS retirement benefit, which is the maximum.

Here are some additional things to know: • Electing a survivor annuity reduces taxable retirement income.

• A retiree can elect to restore his or her retirement benefit to the unreduced amount if the covered spouse dies first.

• A survivor annuity (which is paid for the survivor’s lifetime) is adjusted by annual cost-ofliving adjustments (COLAs).

• Retirees who wed after retirement must make a survivor election within two years of the date of the marriage.

3

Divorce

There was a time when former spouses of federal employees were left without any means of support following a divorce. Thanks in part to the tireless efforts of people such as Betty Villemarette, the former spouse of a CIA officer, Congress passed a series of laws in the 1980s that entitle former spouses to shares of lifetime benefits, survivor benefits and health insurance.

Today, when a federal employee or retiree divorces, the benefits payable to a former spouse are spelled out in the divorce decree or court order. Often, a former spouse will be awarded the “marital share” of the retirement and/or survivor benefits under CSRS or FERS. However, in some cases, they may get less than the marital share or even none of the retirement or survivor benefits. It depends on what the agreement says. If the agreement is silent on any of these benefits, the former spouse is not entitled to receive them.

Spouse-equity laws also allow a former husband or wife to obtain federal health benefits, although he or she is required to pay the full cost (there is no government contribution) and may also pay an administrative fee. Coverage as a family member is lost under the employee’s or retiree’s plan when the divorce is final. A former spouse is eligible to enroll in federal health benefits if: • You were divorced during your spouse’s employment or receipt of annuity; • You were covered as a family member under an FEHBP enrollment at least one day during the 18 months before your marriage ended; and • You have not remarried before age 55.

4

Social Security

Even if you have never paid into Social Security yourself, you may be eligible for a Social Security benefit if your spouse is receiving or is eligible for Social Security retirement or disability benefits and you are at least age 62.

If you are divorced but were married to your former spouse for at least 10 years, you also may be eligible for spousal benefits. To learn more about Social Security spousal benefits and the specific requirements, go to www.ssa.gov/planners/retire/applying6.html.

Here are a few things to know about your and your spouse’s Social Security: • You generally will be entitled to the higher of the benefit that you earned for yourself or the one that your spouse earned for you.

• There are strategies available once you reach full retirement age (65 to 67, depending on your year of birth) that allow you to restrict your application to your spouse’s work record and delay your benefit to acquire additional credits that will increase your own earned amount. You also may file for your benefit and suspend receiving it so that your spouse may file on your work record. To learn more about claiming strategies, visit www. socialsecurity.gov/planners/retire/suspend.html.

• If your spouse is receiving a CSRS retirement in addition to his or her own Social Security w w w. n a r f e . o r g

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FspouseS retirement, that Social Security benefit may be reduced under a modified Windfall Elimination Provision (WEP). As a widow or widower, you could receive a higher Social Security benefit than the one your spouse was receiving, since the WEP is not applied to a survivor’s benefit.

• If you are receiving a CSRS retirement benefit, the Government Pension Offset (GPO) will reduce any Social Security spousal or widow’s benefit by two-thirds of the CSRS retirement, usually eliminating it altogether.

5

Thrift Savings Plan

As a federal employee, your spouse is eligible to invest for retirement in the Thrift Savings Plan (TSP), the federal government’s 401(k) for its employees. If your spouse is a FERS employee,

lifecycle funds with broad market diversification. Learn more about the TSP at www.tsp.gov.

When employees leave the government, they have access to the money invested in the TSP. Married FERS TSP participants must get spousal consent for loans and withdrawals. Married CSRS participants’ spouses are notified, but no prior consent is required.

Spousal beneficiaries of TSP accounts normally will have beneficiary participant accounts established in their names. The advantages of such accounts include having access to the same investment and withdrawal options and low-cost administration fees available to their federal spouse. The downside is that upon your death, the balance in the account cannot be rolled over or transferred to another retirement account (or an inherited or beneficiary IRA). Learn more at www. tsp.gov/PDF/formspubs/tspbk33.pdf.

If your spouse is a FERS 6 employee, the TSP is the key to retirement security. the TSP is the key to retirement security.

FERS employees get automatic agency contributions to their TSP account equal to 1 percent of salary. FERS employees also receive government matching contributions on the first 5 percent of pay that they voluntarily contribute to their TSP account.

The first 3 percent is matched dollar for dollar; the next 2 percent is matched at 50 cents on the dollar.

Contributions above 5 percent are not matched.

The maximum employee contribution for 2015 is $18,000. Employees who are at least age 50 may make catch-up contributions of $6,000 (2015) in addition to their regular TSP contributions. Contributions to the traditional TSP are tax-deferred, and interest accrual is tax-deferred. Since 2012, employees may make after-tax contributions to a Roth TSP account with tax-free interest accumulation. The TSP offers a selection of individual and 34

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Health Insurance

Employees can enroll in the Federal Employees Health Benefits Program (FEHBP) – the federal government’s employer-sponsored health program – for themselves, their spouses and dependent children. It is very important for you to know that to maintain FEHBP coverage after the death of your federal spouse, you must be covered as a dependent in the program at the time of his or her death, and you must be entitled to at least a partial survivor annuity or, in the case of FERS employees, the basic employee death benefit. There are different rules for continuation of health insurance after a divorce. Certain former spouses may qualify to enroll in a health benefits plan. Learn more about spousal benefits for federal health insurance at www.opm.gov/healthcare-insurance/healthcare/ reference-materials/reference/former-spouses/.

7

Life Insurance

Federal Employees’ Group Life Insurance (FEGLI) covers federal employees and retirees and provides limited coverage for family members. Employees are automatically enrolled in basic insurance equal to their current salary rounded to the next $1,000 plus $2,000. There is extra coverage for younger

FspouseS employees and in the event of the accidental death of an employee. Optional coverage provides additional insurance up to five times the basic amount.

There is a “family” option covering the spouse and dependent children. Each multiple of family coverage is equal to $5,000 for a spouse and $2,500 for each eligible dependent child. Employees can enroll in optional life insurance when first hired, at the time of a life event (such as marriage, death of a family member, divorce, birth or the adoption of a child) or during an open enrollment. The last open enrollment was in 2004. To learn more about FEGLI, visit www.opm.gov/healthcare-insurance/ life-insurance/.

8

Long-term care Insurance

Federal employees, retirees and qualified relatives have access to the Federal Long Term Care Insurance Program (FLTCIP). This benefit pays for long-term care services at home, in a nursing home or at an assisted living facility, and at adult day care facilities. If you have recently married a federal employee, you can enroll under an abbreviated underwriting process within 60 days of marriage. Spouses of employees and retirees may enroll at any time, but the cost is based on your age at the time of enrollment, and the underwriting requirements restrict enrollment. This coverage continues for life once you are enrolled as long as the premiums are paid or until the benefits are exhausted. To learn more about FLTCIP, visit www.ltcfeds.com.

9

Medicare

You automatically will be enrolled in Medicare Parts A and B if you are receiving Social Security benefits by the time you are age 65. If you are not automatically enrolled at 65, no one is going to knock on your door. To enroll in Medicare at age 65, you can call (800-772-1213), email (www.ssa. gov) or go to your local Social Security office to enroll starting three months before you turn 65.

Your “initial enrollment period” lasts for seven months. If you miss that, you may sign up during an annual “general enrollment period,” January36

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March. There is no premium for Medicare Part A, so you should sign up during your initial enrollment period. You may want to consider delaying enrollment in Medicare Part B because there is a premium of $104.90 (2015) per month (more for higher incomes). However, there is a late enrollment fee of 10 percent for every 12 months you could have had Part B but didn’t enroll. Some people can enroll after age 65 without a late penalty because they are covered by a group health plan through a current employer (theirs or their spouse’s). They have a “special enrollment period” for eight months after the employment ends.

Most federal retirees and spouses of federal retirees who are ages 65 and older enroll in Medicare Parts A and B while continuing enrollment in the FEHBP. Section 9 of FEHBP plan brochures provides information about coordinating Medicare coverage. FEHBP plan brochures are available at www.opm.gov/healthcare-insurance/healthcare/ plan-information/. Learn more at www.medicare.gov.

10

Beneficiary Designations

Employees and retirees may choose their beneficiaries. But according to OPM, in about half of all cases involving distributions of lump-sum death benefits, no valid beneficiary designation is on file. For CSRS, FERS, TSP and unpaid compensation benefits (such as an employee’s last paycheck or unused annual leave), payments are made in the following order of precedence if there is no valid designation: widow or widower; child or children; parents; executor or administrator of the estate; next of kin.

FEGLI rules are similar, except where there is a valid court order or the employee has assigned his or her life insurance to someone else, giving them ownership of the coverage.

Do you know where your spouse keeps copies of his or her beneficiary designations?

–Tammy Flanagan is senior benefits director at the National Institute of Transition Planning, Inc., and manager of Tammy Flanagan, LLC. As a federal retirement benefits subject matter expert, she conducts training at federal agencies, writes a weekly column called “Retirement Planning” for www.govexec.com and is a frequent guest on Federal News Radio.

Open Season Report

o

pen season Report

Preview

Self Plus One Makes This Open Season Particularly Important

I

t is never too early in the year to start thinking about Federal Benefits Open Season and the type of changes you might need to make in your health insurance coverage for you and your family.

This year, Open Season runs from November 9-December 14.

Open Season is the annual period when eligible federal employees, retirees and survivors can make changes to their health benefits coverage for the following year, and this year is particularly important.

Beginning in 2016, the Office of Personnel Management (OPM) will offer the Self Plus One enrollment for the first time through the Federal Employees Health Benefits Program (FEHBP).

Your Choices

There will be three types of enrollments available in the FEHBP for 2016: • Self Only. This enrollment option allows you to cover only yourself on your health benefits plan. It is typically best for individuals who do not have eligible family members to insure, or when spouses are entitled to en40

| s e p

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roll in their own right.

• Self Plus One. This is a brand new option and provides coverage for an enrollee and one eligible family member, typically either a spouse or a child under age 26 (or older if incapable of self-support because of a disability).

• Self and Family. Self and Family allows you to cover two or more eligible family members.

This may include a spouse and/or children under age 26 (or older if incapable of self-support because of a disability).

Previously, the only enrollment types available were Self Only and Self and Family. With the introduction of Self Plus One, OPM is providing enrollees with an opportunity to “right size” their insurance to truly meet their personal needs while reducing out-of-pocket costs.

OPM will release the new plan information and premiums for each type of enrollment closer to the kick-off of Open Season.

NARFE will include the premiums for the open-to-all, fee-forservice plans in narfe magazine and online at www.narfe.org.

How to make an Open Season change: It’s Easy!

Employees. Contact your agency human resources office for assistance. Some agencies use the Health Benefits Election Form SF 2809, while others use an online self-service system such as Employee Express, MyPay, Employee Personnel Page or EBIS. Retirees and Survivors. Use the information OPM will send to you shortly before the Open Season period begins. You have options! You can: • Call the Open Season Express at (toll-free) 800-332-9798; • Log on to www.opm.gov/ retire/fehb; or • Write to: OPM Open Season Processing Center, PO Box 5000, Lawrence, KS 66046-0500.

For more information on Self Plus One, visit OPM’s Self Plus One Special Initiatives Web page at www.opm.gov/healthcareinsurance/special-initiatives/ self-plus-one/. Also, look for additional information from OPM at the beginning of Open Season.

—Federal Benefits Service Department

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2014088

Managing Money

Should I pay off My mortgage early?

I

’m often asked whether it makes sense to pay off a mortgage early. Clearly the answer is personal and depends on one’s financial situation and emotional

tolerance for debt. But given today’s unprecedented low rates, I believe it’s better to hold on to your mortgage than to accelerate paying it off.

Sure, there’s a cost to carrying a mortgage in the form of interest owed on the balance, but it’s a mistake to consider only how much you could save if you paid off a mortgage early. You also must consider the other side of the equation, which is the opportunity cost − that is, the interest you could earn if you invested the extra cash rather than apply it to the mortgage.

For example, let’s compare the strategies of Tommy Conservative and Jane Smart, both of whom are 45 and want to retire in 15 years at the age of 60. Tommy and Jane each just purchased $300,000 homes, financing 100 percent with 30year, fixed-rate mortgages at 4 percent. The monthly principal and interest payment on their loans is $1,432.

Tommy, who has always dreamed of having his house paid off by the time he retires, decides to pay an extra $787 each month (a total of $2,219 a month) to pay off the mortgage in 15 years.

Jane, on the other hand, pays

42

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the mortgage as scheduled and instead invests $787 a month in a portfolio of stocks and bonds, which, over time, grows at an average annual return of 7 percent.

After 15 years, Tommy accomplishes his goal and has a mortgage-free home at retirement. For simplicity, we’ll assume no appreciation on the home, which means Tommy has $300,000 in home equity.

Jane still has a mortgage balance of $193,628 and only $106,372 in home equity, but she also has the investment portfolio, which, after 15 years, is worth $249,392. Combined with her home equity, Jane has a total of $355,763 in equity.

Of course, if Tommy knew he wanted to pay off his mortgage in 15 years, he could have obtained a 15-year mortgage at a lower interest rate. Assuming a 15-year mortgage with a 3.5 percent interest rate, Tommy’s monthly payment would be $2,145, or $712 more than Jane’s 30-year mortgage payment.

If Jane invested $712 per

By Mark A. Keen,

CFP®

month, her investment portfolio would grow to $225,804 after 15 years – still giving her $32,176 more in total equity than Tommy.

Besides potentially creating greater wealth, hanging on to that mortgage longer and investing the extra cash flow can create important liquidity, which is often ignored or underestimated. The liquidity Jane created gives her tremendous flexibility. After 15 years, Jane could continue paying her mortgage from cash flow.

She could even write a check and pay off her mortgage in a lump sum. Or she could take withdrawals from her portfolio to cover the monthly payments.

Liquidity also can play an important role if life happens to veer off course. Suppose Tommy and Jane both get laid off from their jobs five years after purchasing their homes.

Tommy would have a lower mortgage balance compared to Jane (i.e., $219,177 versus $271,343), but Jane would have about $56,000 in her investment portfolio after five years – enough to cover her mortgage payment for more than three years.

If Tommy went with the 15year mortgage, not only would he not have any excess savings to cover the mortgage until he got back on his feet, but he

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

would be on the hook for the larger monthly payment as well.

Our examples have ignored the impact of taxes.

Under current law, mortgage interest is deductible (assuming you itemize deductions); and, in many cases, factoring this in makes the case for holding on to that mortgage even stronger.

Of course, holding on to a mortgage only works if you have the discipline required to save the would-

be extra principal payments rather than spend them.

Furthermore, you have to be willing to take the appropriate amount of risk in order to invest the money (albeit, you don’t have to be super aggressive to beat today’s historic low mortgage rates).

Mortgage rates won’t remain this low forever, however, and there certainly will be times when it makes sense to get out of a mortgage early.

But if you’ve been fortunate enough to lock in a mortgage at today’s low rates, think twice and consider your circumstances before paying it off early.

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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43

The Informed Citizen

State advocate survey; reply and get tools

I

n this space last year, we conducted a “Survey of Advocacy” and offered a quid pro quo to participants – tools

for legislative advocacy. This column is a reprise with a twist.

This year’s survey deals with state advocacy, and the incen-

Survey of Advocacy 1. Where do you get information about state government?

From newspapers? Which one/s? From commercial television or radio? From public television or radio? ........................................................................................................................... ........................................................................................................................... ���������������������������������������������������������������������������������������������������������������������������� 2. Is your governor covered by the news media? Describe the coverage............................................................................................... ........................................................................................................................... ...........................................................................................................................

3. Do you want more/less coverage of state government? ...........................................................................................................................

4. During the legislative session, is there coverage of the legislature? Of your legislators? Describe the coverage. ........................................................................................................................... ........................................................................................................................... ...........................................................................................................................

5. Do you know your state legislators? Their voting record on current issues?....................................................................................

6. Do you get newsletters from incumbent state legislators? The governor?...............................................................................

7. Has a state legislator/governor ever been asked to speak to your NARFE chapter/federation? If yes, has he/she ever attended?...................................................................................................... ...........................................................................................................................

8. Would you participate in a NARFE bus trip to your state capitol?..........................................................................................................

9. What else should we know about your state advocacy?

(50 words or less)....................................................................................

........................................................................................................... ........................................................................................................... ........................................................................................................... ........................................................................................................... ........................................................................................................... ����������������������������������������������������������������������������������������������������������� 44

| s e p

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By Christopher Farrell, senior analyst

tives are tools for state advocacy. Send the answers to nine questions and choose three state advocacy tools!

Advocacy Tools Offered Select up to three tools: 1. Your elected officials (federal and state) (NARFE Legislative Action Center) 2. Biographical and contact info on your state legislators (NARFE Legislative Action Center) 3. Map showing state legislative districts for your state (OpenStates. org or Census) 4. Map showing your state legislative districts, upper and lower 5. Web address for your governor’s newsletter (National Governors Association) 6. State-specific counts of federal employees, retirees and U.S. Postal Service employees (NARFE’s Protect America’s Heartbeat Toolkit) 7. Annuitant Counts by ZIP code (Office of Personnel Management) 8.Campaign contributions to your state legislators (National Institute on Money in State Politics) 9. Former state legislators serving currently in Congress .................................................................

Mail to NARFE State Advocacy Survey, 606 N. Washington St., Alexandria, VA 22314-1914, email cfarrell@narfe.org or phone 571483-1265.

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Alzheimer’s Update

caregivers: The unsung heroes

I

t can be very stressful to care for a person with dementia.

According to the Alzheimer’s Association, 85 percent of caregivers are family members, who remember the individual as

fun-loving and hard-working and find it hard to see them slowly “drifting away.” More than 15 million Americans provide unpaid care for people with Alzheimer’s disease and other dementias, the Alzheimer’s Association says.

As Alzheimer’s and other dementias progress, behaviors change – as does the role of the caregiver. The three stages of caregiving coincide with the progression of Alzheimer’s disease: early-stage, middle-stage and late-stage caregiving.

Early stage refers to people who are diagnosed with Alzheimer’s and are in the beginning stages of the disease.

During the early stages of Alzheimer’s, the caregiver may serve more as a care partner, who provides support and companionship. The person with Alzheimer’s may experience mild changes in the ability to think and learn. The care partner can help the person with early-stage Alzheimer’s get legal and financial care plans in place.

The early stages of Alzheimer’s may last for years.

The middle stages of Alzheimer’s are typically the longest.

Damage to the brain can make it difficult to perform routine tasks and express thoughts.

The person with Alzheimer’s may jumble words, have trouble

46

| s e p

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dressing or act in unexpected ways. Daily routines need to be adapted. As the patient’s abilities continue to diminish, strategies need to be modified. No two Alzheimer’s patients progress and react in the same way. There are challenging days plus good days.

Behavioral changes can be some of the most distressing for caregivers and family members.

Persons with dementia may experience depression, anxiety, irritability and repetitive behaviors. As the disease progresses, other changes may occur, including sleep changes, physical and verbal outbursts, and wandering.

A caregiver must understand what behaviors are common during this stage and how to assist the person with dementia.

Eating, dressing and grooming become more challenging during this stage. This loss of independence can be very distressing for the person with dementia.

The late stages of Alzheimer’s disease may last from several weeks to several years. As the disease advances, intensive,

By Merv Stuckey, NARFE-alzheimer’s Chair

around-the-clock care is usually required. A person with latestage Alzheimer’s usually has difficulty eating and swallowing and needs assistance walking − and eventually is unable to walk.

The late-stage sufferer needs full-time help with personal care and loses the ability to communicate with words. He or she is vulnerable to infections, especially pneumonia. The caregiver’s role is now centered on preserving the quality of life and maintaining the dignity of the sufferer. The caregiver can express caring through touch, sound, sight, taste and smell.

As the responsibilities become more demanding, it is important that caregivers take care of themselves. Respite care for sufferers can provide caregivers a needed break. It can be provided at home, in a care setting, such as adult day care, or in a residential facility.

Caregivers are the unsung heroes in the fight against Alzheimer’s disease. Please continue to give as generously as you can to NARFE-Alzheimer’s Research as we provide monetary support to find the cause of and cure for this cruel disease.

For more caregiving information, see www.alz.org/care. merv stuckey is chair of the NARFEAlzheimer’s National Committee. email: narferoadrunner@comcast.net. This column appears quarterly.

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G FUND

F FUND

C FUND

S FUND

I FUND

1 Month

0.19%

0.74%

2.10%

-0.12%

2.08%

YTD

1.15%

0.79%

3.39%

4.83%

8.73%

1 year

2.09%

3.27%

11.29%

11.28%

0.00%

3 year*

1.97%

2.04%

17.63%

19.54%

12.85%

5 year*

2.05%

3.58%

16.30%

16.84%

8.34%

10 year*

3.05%

4.81%

7.78%

9.13%

5.25%

L INCOME

L 2020

L 2030

L 2040

L 2050

1 Month

0.55%

1.03%

1.22%

1.33%

1.46%

YTD

1.95%

3.29%

3.89%

4.27%

4.73%

1 Year

3.52%

5.23%

6.14%

6.79%

7.20%

3 year*

4.89%

9.64%

11.75%

13.29%

14.72%

5 year*

4.70%

8.81%

10.52%

11.75%

N/A

JUl

*Annualized

*Annualized

THIS CHART is provided as a service to NARFE members who enrolled in the Thrift Savings Plan (TSP) 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. Source: TSP 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.)

OPM Retirement Claims Processing status

In July, the F Fund benefited from falling Treasury yields as worries about a slowdown in China’s economy increased. The I Fund gained as Greece reached tentative agreement with its creditors, and the C Fund benefited from signs of economic strength in most developed economies. The S Fund had a small loss driven entirely by a loss in energy stocks. Oil prices declined sharply during the month due to fears of slowing demand in China and no decline in U.S. production. The L Funds generated moderate balanced returns, as expected.

—BY Ravindra Deo, Chief Investment Officer, Thrift Savings Plan

Countdown to cola

T

he Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 0.38 percent in June. To calculate the 2016 cost-of-living adjustment (COLA), the indices of July, August and September 2015 will be averaged and compared with the 2014 third-quarter average of 234.242. The percentage increase, if any, determines the COLA. June’s index, 233.804, is down 0.19 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 1.70 percent higher than the December 2014 base index of 229.909.

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

Month

2015

For the Record

International news gives Tsp a boost in July

Thrift savings Plan fund returns

Monthly % Change

% Change from 234.242

New Claims Received

Claims Processed

Inventory

% Processed in 60 days or less

October 2014

233.229

-0.40

-0.43

November

231.551

-0.72

-1.15

JANUARY

18,629

7,662

22,636

80.2%

December

229.909

-0.71

-1.85

FEBRUARY

9,219

7,841

24,014

80.6%

January 2015

228.294

-0.70

-2.54

229.421

+0.50

-2.06

MARCH

5,478

8,898

20,594

81.6%

February

APRIL

6,292

8,660

18,226

72.6%

March

231.055

+0.71

-1.36

68.0%

April

231.520

+0.20

-1.16

May

232.908

+0.60

-0.57

June

233.804

+0.38

-0.19

MAY

7,845

june

6,920

10,697 7,783

15,374 14,511

68.7%

THIS CHART tracks progress by the Office of Personnel Management (OPM) in reducing its backlog of retirement claims. For data going back to October 2013, and for an update of the number of new retirement cases OPM receives each month by agency and the percent of cases with errors that it returns to those agencies, go to www.opm. gov/retirement-services/.

48

CPI-W

| s e p

2 015

July August September

Donate to NARFE Programs Support Alzheimer’s Research

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

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

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

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

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

Discover AMEX Alzheimer’s research: $12 Million Fund National Committee Chair Card Number: Merv Stuckey, 2272 E. Buster Mountain Dr. Expiration Date: (mm)/ (yy) Oro Valley, AZ 85755-4709 *Total as of June 30, 2015 3-Digit Security Code: 100% of all contributed funds go to Name: (please print) Email: narferoadrunner@comcast.net

$11,419,285* 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

Ready, set, recruit!

Through Our Eyes

2016

NARFE’s fall membership campaign starts September 1. Members can earn $10 for each new member they recruit – current federal employees and retirees qualify. (The recruiter’s ID number must be provided when the new member joins.)

Recruiters also will be entered once for each recruit for the Grand Prize Drawing for an Apple iPad Air 2.

Keep Track, give back

T

he 2016 NARFE Calendar, Ellicott City, MD, Ch 1734; Jordan National Active and Retired Federal Employees featuring the winners of the Tuller, The Villages, FL, Ch Association 1372; Association’s annual photo William L. Witmer, Lakewood, CO, contest, is in the mail. It not only Ch 1085; James M. Hamilton, Colocelebrates the talents of members, rado Springs, CO, Ch 0241; Thomas but it also is a significant source of A. Smith, Munford, AL, Ch 1511; Al revenue to NARFE’s general fundGiencke, Plymouth, MN, Ch 0150; raising program.

Carol Moyer, Riva, MD, Ch 0251; The 2016 Calendar photos were Marie S. Hammer, Land O’ Lakes, shot by: Phyllis Maguire, Burke, VA, FL, Ch 0185; Toya Payne, GeorgeLifeCh Membership Apl_New Design 3/26/13 3:49 PM Page 1 Ch 2363; Lynn Fucarino, 0893; Colleen Quinn-House, town, IN, Harbor Reflections | Phyllis Maguire - Burke, VA | Chapter 0893

Tampa, FL, Ch 1154; Robert C. Peterson, Summerville, SC, Ch 1082; Ernest Tolin, Benicia, CA, Ch 0016; Dennis Taylor, Riverside, CA, Ch 0188; David Harrah, Bel Air, MD, Ch 2363; Marcia Socolik, Henderson, NV, Ch 2031; Ralph Northrop, Rockville, MD, Ch 1127; and Jim Little, Woodbridge, VA, Ch 1270.

Contest info: www.narfe.org; log in and click on Special Programs.

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.

50

| s e p

2 015

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 – $40* 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 grass-roots lobbying efforts.

Chapter Affiliation: Chapter # __ __ __ __(if known, otherwise enroll me in the chapter closest to my zIp code). *First-year dues. Subsequent years, $40 plus local chapter dues.

OR

o eNARFE Chapter Online Membership – $40 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.

Including email address strongly recommended.

Total Dues $40 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. _____________________________________ Expiration Date _________ /_________ mm

yyyy

Name on Card _________________________________ Signature _____________________________________ Date _________________________________________ MAY WE THANK SOMEONE? If applicable, please provide the name, membership and chapter number of the member who introduced you to NARFE: Recruiter’s Name __________________________________ Recruiter’s Membership ID __________________________ Recruiter’s Chapter Number _________________________

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

NARFE’s Dues Withholding Program What is dues withholding?

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

How does it work?

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

Advantages • Save 15% off your annual membership dues!

• Sign up your spouse and double your savings!

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

• Your monthly payment is affordable and convenient!

• You may cancel your dues withholding at any time!

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

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

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

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

Social Security Number (9-digit number)

–

Civil Service Annuity Number

–

C S

–

–

–

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

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

NARFE MEMBERSHIP INFORMATION

Street Address ___________________________________

NARFE Membership ID ____________________________________

Apt./Unit________________________________________

NARFE Chapter Number____________________________________

City _________________________ State _____ ZIP _____

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

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

mm

yyyy

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

If YES, enter spouse’s information below.

Spouse’s Name ___________________________________________ Spouse’s Membership ID ___________________________________

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

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

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

Signature of Annuitant or Survivor-Annuitant

Date

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

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

DW-2 (08/12)

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