April 2022 NARFE Magazine

A NARFE PUBLICATION FOR FEDERAL EMPLOYEES AND RETIREES

April 2022 VOLUME 98 ★ NUMBER 3

P. 24

State Tax Roundup P. 34 The New Realities of Federal Work

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Contents APRIL 2022

COVER STORY PAGE 24

FEATURE PAGE 34

STATE TAX TREATMENT OF FEDERAL ANNUITIES We’ve put together this up-to-date guide so you can see how your state treats federal annuities and compare that to states around the country.

THE NEW REALITIES OF FEDERAL WORK Find out how the pandemic has changed public service and whether this is the time to join the legion of workers leaving or changing their jobs.

Washington Watch

8 President Issues Executive

Order Implementing 2.7 Percent Average Federal Pay Raise for 2022

8 Debt Limit Raised, Default Avoided

9 FAIR Act Proposes 5.1%

Average Increase to Federal Pay Rates for 2023

10 A Robust Grassroots Effort

Keeps NARFE Issues Above 2022 Campaign Noise

11 Honoring Civil Servants

Killed in the Line of Duty Act Introduced

Columns

A NARFE PUBLICATION FOR FEDERAL EMPLOYEES AND RETIREES

4 From the President

April 2022 VOLUME 98 ★ NUMBER 3

22 Benefits Brief 40 Managing Money Departments

P. 24

State Tax Roundup P. 34

6 NARFE Online 18 Questions & Answers

The New Realities of Federal Work

ON THE COVER Illustration by TGD

42 NARFE News 46 NARFE Perks 48 The Way We Worked

Connect with us!

Visit us online at www.narfe.org Like us on Facebook NARFE National Headquarters Follow us on Twitter @narfehq

Follow us on LinkedIn NARFE

NARFE MAGAZINE www.NARFE.org

1

APRIL 2022 VOLUME 98 ★ NUMBER 3

REGIONAL VICE PRESIDENTS

EDITORIAL DIRECTOR Jenn Rafael

REGION I James C. Risner

SENIOR EDITOR Mabel Yu CREATIVE SERVICES MANAGER Beth Bedard ADDITIONAL GRAPHIC DESIGN TGD EXECUTIVE EDITOR Helen Mosher EDITORIAL BOARD Kenneth J. Thomas, Kathryn E. Hensley, Barbara Sido CONTACT US NARFE Magazine 606 North Washington St. Alexandria, VA 22314-1914 Phone: 703-838-7760 Fax: 703-838-7781 Editorial: communications@narfe.org Advertising Sales: Anita Nelson advertising@narfe.org

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 NFBNEWSLINE® service at 866-504-7300 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.

NATIONAL OFFICERS KENNETH J. THOMAS President; natpres@narfe.org KATHRYN E. HENSLEY Secretary/Treasurer natsectreas@narfe.org

EXECUTIVE DIRECTOR BARBARA SIDO execdir@narfe.org

REGION II Gary Roundtree Sr. (Delaware, District of Columbia, Maryland, New Jersey and Pennsylvania) Tel: 443-929-7045 Email: groundtreesr@comcast.net

REGION III Clarence Robinson (Alabama, Florida, Georgia, Mississippi, South Carolina, Puerto Rico and Virgin Islands) CELL: 404-312-8028 Email: crobin8145@att.net

REGION IV Robert L. Helfrich (Illinois, Indiana, Michigan, Ohio and Wisconsin) Tel: 317-501-1700 Email: rlhelfrich@yahoo.com

REGION V Cindy Reneé Blythe

TO JOIN NARFE, RENEW YOUR MEMBERSHIP OR FIND A LOCAL CHAPTER: CALL (TOLL-FREE) 800-456-8410 OR GO TO www.narfe.org TO CHANGE YOUR ADDRESS, PHONE NUMBER OR EMAIL LISTING:

CALL (TOLL-FREE) 800-456-8410 EMAIL memberrecords@narfe.org OR GO TO www.narfe.org, log in and click on “My Account”

TO REACH A FEDERAL BENEFITS SPECIALIST:

EMAIL fedbenefits@narfe.org

NARFE HEADQUARTERS 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.

(Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont) Tel: 207-540-6233 Email: rvp1@narfe.org

606 N. Washington St. Alexandria, VA 22314 703-838-7760 Hours of operation: Monday-Friday, 8 a.m.-5 p.m. ET

(Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota) Tel: 785-256-1450 Email: mrsdocbusyb@yahoo.com

REGION VI Marshall L. Richards (Arkansas, Louisiana, Oklahoma, Republic of Panama and Texas) Tel: 903-660-2784 Email: pappysdad@cobridge.tv

REGION VII Rodney L. Adelman (Arizona, Colorado, New Mexico, Utah and Wyoming) Tel: 623-505-4719 Email: narfe7vp@cox.net

REGION VIII Robert H. Ruskamp (California, Hawaii, Nevada and Republic of Philippines) Tel: 703-628-3234 Email: rvp8@narfe.org

REGION IX Linda L. Silverio (Alaska, Idaho, Montana, Oregon and Washington) Tel: 503-391-2963 Email: l.l.silverio.narfe@gmail.com

REGION X William Shackelford (Kentucky, North Carolina, Tennessee, Virginia and West Virginia) Tel: 703-830-6590, CELL: 703-201-6304 Email: rvp10@narfe.org

NARFE Magazine (ISSN 1948-4453) is published monthly except in February and July 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 $48. 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 © 2022, 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 Magazine, but at the same time we will not undertake to guarantee the reliability of our advertisers.

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NARFE MAGAZINE APRIL 2022

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From the President NARFE’S MISSION STATEMENT To support legislation and regulations beneficial to federal civilian employees and annuitants and potential annuitants under any federal civilian retirement system and to oppose those detrimental to their interests.

To promote the general welfare of federal civilian employees and annuitants and potential annuitants, to advise and assist them with respect to their rights under retirement, health and other employee and retiree benefits laws and regulations, and to represent their interests before appropriate authorities.

To cooperate with other organizations and associations in furtherance of these general objectives.

Neither Snow nor Rain nor Heat nor Gloom of Night ...

E

very day, half a million postal workers deliver mail to every address in America, providing crucial services and keeping

us physically connected in an increasingly virtual world. NARFE has long advocated for postal reform, specifically the repeal of the burdensome mandate to prefund future USPS retiree health benefits, as well as the preservation of postal retirees’ choice regarding Medicare coverage.

Now, thanks to NARFE’s unflagging advocacy efforts at both the grasstops and grassroots levels, the House in February passed a reform bill that ensures postal retirees are protected and federal health benefits are preserved, while also providing substantial financial relief to USPS. Over the past several years, my predecessors and I have delivered our message to Congress to amplify NARFE’s stance on postal reform. NARFE has been ever cognizant of the need to protect the benefits promised to postal retirees. Too many times, reform proposals were advanced that would have required postal retirees to pay additional premiums for mostly duplicative health insurance coverage through Medicare or risk their earned health benefits, setting a dangerous precedent. Bills that would have altered the bargain regarding health benefits for postal retirees after they retired, adding costs for those on a fixed income, were a nonstarter.

This legislation is different.

First, no one will see decreased benefits. The Postal Service Reform Act of 2022 creates a new 4

NARFE MAGAZINE APRIL 2022

Postal Service Health Benefits (PSHB) program for all USPS employees and retirees; benefits will mirror those offered through the Federal Employees Health Benefits (FEHB) program. Costs for coverage for postal employees and retirees are expected to stay the same or even drop because of savings from integration with Medicare. With a different, generally younger, cohort remaining in FEHB, average costs of coverage for federal employees and retirees are also expected to decrease, all else being equal. When an earlier version of the bill threatened adverse premium impacts for the remaining FEHB program, NARFE advocacy highlighted the threat and secured amendments to protect the program.

Second, the legislation upholds promises to retirees. While postal employees will need to enroll in Medicare Part B after retirement, current retirees will not be required to do so. But they will have a new opportunity to enroll without any late penalty, should they choose to do so.

In addition, the Postal Service Reform Act ensures mail delivery will continue six days per week, a service fundamental to USPS’ core mission.

At press time, the bill was awaiting a Senate vote.

Check NARFE Newsline and www.narfe.org for the latest on the legislation’s status.

This advocacy achievement was only possible with the help of those who stand with us.

Thank you for supporting NARFE in our tireless efforts to protect your earned pay and benefits.

Stay safe.

KENNETH J. THOMAS NARFE NATIONAL PRESIDENT natpres@narfe.org

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NARFE Online MISS A WEBINAR? CATCH UP on past NARFE Federal Benefits Institute presentations in NARFE’s webinar archive, where you’ll find videos, slides and transcripts of question-and-answer sessions for webinars dating back to January 2019. View them at www.narfe.org/webinar-archive.

Information and Resources at Your Fingertips

N

ARFE’s website, www. narfe.org, has the tools and materials you need to make the most of your membership. Whether

it’s a webinar guiding you to the best health plan for your family, a benefits brief outlining financial strategies for your situation, tips on being

a better grassroots advocate, or discounts on travel and products through the NARFE Perks program, you’ll find everything you need.

TSP UPDATE ONLINE Get the most recent monthly and annual Thrift Savings Plan returns (G, F, C, S, I and L Funds) online at www. narfe.org/tsp-funds.

NARFE COLA UPDATE

The NARFE Federal Benefits Institute tracks changes to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is relevant to the cost-of-livingadjustment (COLA) to civil service annuities for 2023. For more details, visit www.narfe. org/cola.

CONNECT ON FEDHUB If you haven’t checked out NARFE’s new online community yet, what are you waiting for? NARFE designed FEDHub to support your federal journey, leveraging the knowledge and value of our entire community—all that’s missing is you. Join the conversation at fedhub.narfe.org/ quick-start-guide.

A NARFE PUBLICATION FOR FEDERAL EMPLOYEES AND RETIREES

READ NARFE MAGAZINE ONLINE

NARFE’s website now offers a digital flipbook of this and previous issues at www.narfe.org/magazineissues. Read the magazine online on your computer, phone or tablet, or download it to peruse later.

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NARFE MAGAZINE APRIL 2022

MARCH 2022 VOLUME 98 ★ NUMBER 2

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Washington Watch

President Issues Executive Order Implementing 2.7 Percent Average Federal Pay Raise for 2022

P

resident Biden signed an executive order in late December implementing his proposed 2.7 percent average pay raise for federal civilian employees,

which took effect with the first full pay period of 2022. The pay raise consists of a 2.2 percent across-the-board increase with a 0.5 percent average increase to locality pay rates. It also achieves parity with the raise given to military members, for which NARFE has long advocated.

NARFE President Ken Thomas commended the news, noting that the raise was a “welcome improvement from 2021’s 1 percent increase with no bump in locality pay, which lagged behind both military and private-sector increases.”

The pay raise figure is based on the annual change in private-sector pay as measured by the Bureau of Labor Statistics’ Employment Cost Index prior to the development of the president’s budget request. As such, the raise

trails current rates of wage inflation.

Thomas explained, “It will be crucial that the Biden administration adhere to the same method of determining increases in the next year, so the 2023 pay raise reflects recent changes in wage inflation.”

The exact increase amounts vary across the country based on locality pay rates, with some places like Palm Bay, FL, seeing raises around 2.45 percent, and other higher-cost areas, such as San Fransisco, CA, seeing 3.14 percent.

—SETH ICKES, POLITICAL ASSOCIATE

Debt Limit Raised, Default Avoided

A

bill increasing the debt limit was signed into law by President Biden on December 16, ensuring that the federal government did not default on payment of the United States’ debt obligations. The deal came together as Congress approached the mid-December deadline that Treasury Secretary Janet Yellen projected in her November letter to congressional leadership.

8

NARFE MAGAZINE APRIL 2022

The debt limit, or “debt ceiling,” refers to the limit

imposed by law on the amount of national debt that the

APRIL ACTION ALERT: The Federal Adjustment of Income Rates (FAIR) Act, S. 3518, was reintroduced in January, starting the conversation on federal pay raises for 2023. Visit NARFE’s Legislative Action Center at www.narfe.org to send a message to your Representative urging his or her cosponsorship of the legislation.

MYTH VS. REALITY MYTH: Pay raises are a cost-of-living adjustment (COLA) for federal employees.

REALITY: Pay raises for federal employees ensure that their salaries remain competitive with those in the private sector. Raises are subject to a “locality pay adjustment,” which reflects regional differences in wages across the country. In contrast, yearly retiree annuity COLAs are automatically provided using the Bureau of Labor Statistics’ Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). COLAs are intended to help retirees’ annuities keep pace with inflation.

U.S. government can have outstanding. This agreement comes after more than half a year of posturing and shortterm patches, such as the $480 billion bipartisan debt limit increase passed in October, as both parties attempted to reach a compromise to increase the debt limit.

The debt limit has been raised or suspended numerous times. According to the Department of Treasury, “Since 1960, Congress has acted 78 separate times to permanently raise, temporarily extend or revise the definition of the debt limit—49 times under Republican presidents and 29 times under Democratic presidents. Congressional leaders in both parties have recognized that this is necessary.”

Senate leaders struck a deal that allowed the bill to pass via a fast-track process in the Senate,

bypassing the threat of a filibuster for this one-time exception. After the process was approved with sufficient bipartisan support,

THE DEBT LIMIT, OR “DEBT CEILING,” REFERS TO THE LIMIT IMPOSED BY LAW ON THE AMOUNT OF NATIONAL DEBT THAT THE U.S. GOVERNMENT CAN HAVE OUTSTANDING. the bill only required approval from a simple majority in the Senate. This would permit Senate Democrats to raise the debt limit on their own and allowed Senate Republicans to avoid voting to increase the debt limit.

The House of Representatives first passed a bill approving

the fast-track procedures through a party-line vote, 222-212, with Democrats and one Republican supporting the measure. Then, 14 Republicans, including Minority Leader Mitch McConnell, R-KY, joined Senate Democrats to pass the procedural workaround through the upper chamber.

With the expedited procedures in place, the vote to increase the limit itself fell on party lines in both chambers, 50-49 in the Senate and 221-209 in the House, with Democrats voting for, and Republicans— with one exception, Rep. Adam Kinzinger, R-IL—voting against the bill.

The final bill raised the debt limit by $2.5 trillion, extending the amount of funds the federal government can borrow into 2023, well past the 2022 midterm elections.

—BY JOHN ROBERT AYERS, POLICY AND PROGRAMS ASSISTANT

FAIR Act Proposes 5.1 Percent Average Increase to Federal Pay Rates for 2023

O

n January 13, Rep. Gerry Connolly, D-VA, and Sen. Brian Schatz, D-HI, introduced legislation to increase federal pay, which would help close the gap between public- and private-sector pay rates. The Federal Adjustment

of Income Rates (FAIR) Act, H.R. 6398, would institute a 4.1 percent across-the-board increase, as well as a 1 percent average increase to locality pay.

The 4.1 percent raise would be the largest across-the-board increase since 2004. This is the

eighth year that Rep. Connolly has introduced the FAIR Act. The 4.1 percent increase is based on the annual change to private sector pay, as measured by the Bureau of Labor Statistics’ Employment Cost Index, minus 0.5 percent. This follows the SEE FAIR ACT ON P. 11 NARFE MAGAZINE www.NARFE.org

9

Washington Watch

NARFE GRASSROOTS ADVOCACY LEARN MORE about how you can take action to protect your earned pay and benefits by reviewing NARFE Grassroots materials at www.narfe.org/advocacy.

A Robust Grassroots Effort Keeps NARFE Issues Above 2022 Campaign Noise

A

s we approach the midterm elections, campaigning will begin to dominate congressional schedules, leaving few opportunities to get actual business done in Congress. While midterm elections determine the outcomes of dozens of governors’ races, hundreds of mayoral contests, and thousands of battles for state legislative seats, many eyes will be on Congress. Four hundred sixty-nine seats in the U.S. Congress—34 Senate seats and all 435 House seats—are up for election on November 8, 2022, and the political parties will battle for control of both chambers. Whoever controls the House or the Senate controls the agenda in that chamber. The majority party determines who leads important congressional committees and what bills will be considered on the House or Senate floor. And in this increasingly polarized political environment, the White House’s ability to accomplish its legislative agenda, for better or worse, depends on whether its party controls the two houses of Congress.

How will reapportionment and redistricting affect the upcoming elections? Reapportionment is the process of reassigning congressional seats among the states after the decennial census.

Redistricting is the process of 10

NARFE MAGAZINE APRIL 2022

drawing new electoral boundaries, a requirement that also takes place after the census. The results of the 2020 census have redrawn district lines in every multipledistrict state. States with more than one district, even those that did not gain or lose districts, must redraw district boundaries to match internal population shifts.

The end goal? Equal numbers, to the greatest extent practical, of people in every district, nationwide. Redistricting and reapportionment will affect the 2022 election results, as some states may lose or gain districts and have highly competitive races.

At this point, most states have wrapped up redistricting, while others are deep into the process. NARFE members should follow this year’s candidates and races closely, as they will likely be affected by these changes and may have new congressional representation in 2023. Nonpartisan websites like FiveThirtyEight (www. fivethirtyeight.com) and BallotPedia (www.ballotpedia. org) track the redistricting process throughout the country and provide election information, such as opinion polls, analysis, politics and economics.

It will be important for NARFE members and leaders to get to know their new Representatives and make sure that legislators are up to speed on NARFE’s issues. A robust NARFE

grassroots effort will ensure that discussion of our priority issues won’t get buried under campaign noise and other competing interests.

Candidates are seeking ample opportunities to interact with constituents, packing their schedules with town halls, meet-and-greets, candidate forums and other events.

NARFE members can visit the Town Hall Project website at www.townhallproject.com and enter their ZIP code to access a list of events in their district and throughout the state. Candidates will also seek invitations from constituent groups to speak at conferences and meetings, so federation and chapter leaders are encouraged to invite candidates to speak at NARFE events, allowing members the opportunity to voice their concerns in a small group setting.

Before you interact with candidates, be prepared to discuss the issues. Consult NARFE’s issue briefs available on the advocacy page of NARFE’s website (www.narfe. org). Afterwards, tell us about your interaction by emailing advocacy@narfe.org.

Thank you for showing up, supporting NARFE’s grassroots advocacy activities and making your voice heard.

—BY MARSHA PADILLA-GOAD, DIRECTOR, GRASSROOTS PROGRAM

Biden Signs NDAA Into Law, Includes Parental Bereavement Leave for Federal Employees

P

resident Biden signed the 2022 National Defense Authorization Act (NDAA) into law on December 27 after months of negotiations. The defense policy bill authorizes programs with up to $768 billion in spending. Both the House and Senate passed the bill with strong bipartisan support, with a 363-70 vote in the House and an 88-11 vote in the Senate.

The administration originally

called for a slightly slimmer bill with a $715 billion top line. The bill authorizes approximately 5 percent more spending compared with the $740.5 billion in the 2021 NDAA. The NDAA contains a new paid parental bereavement leave benefit for federal employees, providing up to two weeks of paid time off following the death of a child. This is another example of federal workforce

provisions being passed via recent defense bills, as the 2020 NDAA granted paid parental leave to all federal employees.

The 2022 bill also includes provisions to increase uniformed service members’ pay by 2.7 percent—the same average increase Biden’s executive order allocated to civilian federal employees.

—BY JOHN ROBERT AYERS, POLICY AND PROGRAM ASSISTANT

Honoring Civil Servants Killed in the Line of Duty Act Introduced

S

en. Kyrsten Sinema, D-AZ, introduced the Honoring Civil Servants Killed in the Line of Duty Act, S. 3474, on January 13. Sens. Gary Peters, D-MI, and Rob Portman, R-OH, the chairman and ranking member, respectively, of the Senate Committee on Homeland Security and Governmental Affairs (HSGAC), cosponsored the bill, setting the stage for swift committee consideration. When HSGAC did so on February 2, the bill

advanced via the unanimous consent of committee members from both sides of the aisle.

The legislation seeks to increase death benefits and funeral allowances for federal employees. Specifically, it would increase the death benefit for survivors by $90,000, which would set it at $100,000. An increase to funds granted for funeral allowances would also receive a similar increase, from $800 dollars to $8,800.

The death benefit has not been increased since 1997, and the funeral expense payment has not been increased since 1966.

The bill would bring death benefits and payments more in line with payments given to federal employees who are killed abroad. Both of the updated amounts would increase annually to keep pace with inflation.

COVID-19 pandemic. “For two years, federal employees have risked their health and safety working on the frontlines of this pandemic,” Rep. Connolly stated in a press release regarding the bill.

NARFE released a statement in support of the act, saying that “Federal employees have endured much over the past few years, from reduced annual pay increases to furloughs and shutdowns. NARFE welcomes a

pay raise proposal informed by private-sector wage growth that builds on the progress made with the 2.7 percent pay raise for 2022.

“This 4.1 percent across-theboard pay increase would allow the federal government to better compete with the private sector to attract and retain a highly qualified, top-performing federal workforce, as well as improve the morale of current employees.”

—BY JOHN ROBERT AYERS, POLICY AND PROGRAM ASSISTANT

FAIR ACT FROM P.9

formula laid out by the Federal Employees Pay Comparability Act of 1990. With the addition of the 1 percent average increase to locality pay rates, the FAIR Act gives federal pay rates another 0.5 percent bump to catch up with competing private-sector pay rates.

While that slight bump helps make up for reduced pay increases in recent years, Rep. Connolly said that the main driver of the raise is the

—BY JOHN ROBERT AYERS, POLICY AND PROGRAMS ASSISTANT NARFE MAGAZINE www.NARFE.org

11

NARFE BILL TRACKER

THE NARFE BILL TRACKER IS YOUR MONTHLY GUIDE TO LEGISLATION NARFE IS FOLLOWING. CHECK BACK EACH ISSUE FOR UPDATES. ISSUE

BILL NUMBER / NAME / SPONSOR

WHAT BILL WOULD DO Repeals both the Government Pension Offset (GPO) and Windfall Elimination Provision (WEP).

Referred to the House Committee on Ways and Means (H.R. 82) / Referred to Senate Committee on Finance (S. 1302)

Reforms the Windfall Elimination Provision (WEP) by providing a monthly rebate of $150 to current beneficiaries (age 62 or older before 2023) and creating a new formula to calculate benefits for future WEP-affected individuals (turning 62 in or after 2023).

Referred to the House Committee on Ways and Means

Fully repeals the Windfall Elimination H.R. 4788: Well-Being for Every Public Servant Act of 2021 / Rep. Provision for individuals whose combined monthly income from Julia Letlow, R-LA their non-Social Security covered government annuity and Social Security Cosponsors: benefits is $5,500 or lower, with H.R. 4788: 0 graduated implementation on benefits above that amount.

Referred to the House Committee on Ways and Means

H.R. 82/S. 1302: The Social Security Fairness Act / Rep. Rodney Davis, R-IL / Sen. Sherrod Brown, D-OH Cosponsors: H.R. 82: 189 (D) 62 (R) S. 1302: 31 (D) 4 (R) 2 (I) H.R. 2337: The Public Servants Protection and Fairness Act / Rep. Richard Neal, D-MA Cosponsors: H.R. 2337: 185 (D) 0 (R)

SOCIAL SECURITY

H.R. 5723: Social Security 2100: A Sacred Trust / Rep. John Larson, D-CT Cosponsors: H.R. 5723: 200 (D) 0 (R) H.R. 5834: Equal Treatment of Public Servants Act of 2021/ Rep. Kevin Brady, R-TX Cosponsors: H.R. 5834: 3 (D) 45 (R)

NARFE CENTENNIAL

H.Res. 131/S.Res. 76: Resolution Celebrating NARFE’s Centennial / Rep. Gerry Connolly, D-VA / Sen. Ben Cardin, D-MD Cosponsors: H.Res. 131: 15 (D) 4 (R) S.Res. 76: 3 (D) 2 (R) H.R. 51/S. 51 Washington D.C. Admission Act / Del. Eleanor Holmes Norton, D-DC / Sen. Thomas Carper, D-DE

DC STATEHOOD

Expands and strengthens Social Security benefits, improves the solvency of the Social Security trust fund, repeals the Windfall Elimination Provision and Government Pension Offset, and provides for numerous other Social Security related improvements.

Referred to the House Committees on Ways and Means, Education and Labor, and Energy and Commerce

Reforms the Windfall Elimination Provision (WEP) by providing a monthly payment of $100 to current WEPaffected beneficiaries (age 62 or older before 2023) and $50 for an affected spouse or child. Creates a new formula to calculate benefits for future WEPaffected individuals (turning 62 in or after 2023).

Referred to the House Committee on Ways and Means

Congratulates NARFE on the celebration of its 100th anniversary on February 19, 2021, and recognizes the vital contributions its members have made to the United States during the past 100 years.

Referred to the House Committee on Oversight and Reform (H.Res. 131) / Agreed to in the Senate by unanimous consent on February 25, 2021 (S.Res. 76)

Provides for the admission of the State of Washington, DC, into the Union.

Passed the House on April 22, 2021, by a vote of 216-208 / Referred to the Senate Committee on Homeland Security and Governmental Affairs (S. 51)

Cosponsors: H.R. 51: 216 (D) 0 (R) S. 51: 44 (D) 0 (R) 1 (I)

NARFE’s Position: 12

LATEST ACTION(S)

NARFE MAGAZINE APRIL 2022

Support

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NARFE BILL TRACKER

THE NARFE BILL TRACKER IS YOUR MONTHLY GUIDE TO LEGISLATION NARFE IS FOLLOWING. CHECK BACK EACH ISSUE FOR UPDATES. ISSUE

BILL NUMBER / NAME / SPONSOR

WHAT BILL WOULD DO

H.R. 302: Preventing a Patronage Requires presidential administrations to obtain the agreement of Congress to System Act / Rep. Gerry reclassify competitive service positions Connolly, D-VA outside of merit system principles.

Cosponsors: H.R. 302: 9 (D) 3 (R) H.R. 6066: Strengthening the Office of Personnel Management (OPM) Act / Rep. Gerry Connolly, D-VA FEDERAL PERSONNEL POLICY

Cosponsors: H.R. 6066: 1 (D) 1 (R) H.R. 6104: Building the Next Generation of Federal Employees Act / Rep. Gerry Connolly, D-VA Cosponsors: H.R. 6104: 1 (D) 0 (R)

H.R. 6398/S. 3518: The Federal Adjustment of Income Rates (FAIR) Act / Rep. Gerry Connolly, D-VA / Sen. Brian Schatz, D-HI

FEDERAL COMPENSATION

Advanced from the House Committee on Oversight and Reform by a vote of 25-14

Establishes a comprehensive Federal Internship and Fellowship Center within the Office of Personnel Management (OPM) to administer, manage and promote all federal internship and fellowship programs. The bill also credits fellows and interns who meet all qualifications with an additional five points in the competitive service examination.

Referred to the House Committee on Oversight and Reform

Provides federal employees with a 5.1 percent average pay raise in 2023.

Referred to the House Committee on Oversight and Reform (H.R. 6398) / Referred to the Senate Committee on Homeland Security and Governmental Affairs (S. 3518)

Extends paid leave to federal and postal employees for all conditions covered by the Family and Medical Leave Act (FMLA).

Approved by the House Committee on Oversight and Reform (H.R. 564) / Referred to the Senate Committee on Homeland Security and Governmental Affairs (S. 1158)

Cosponsors: H.R. 564: 33 (D) 0 (R) S. 1158: 4 (D) 0 (R) H.R. 3076: The Postal Service Reform Act / Rep. Carolyn Maloney, D-NY / Sen. Gary Peters, D-MI Cosponsors: H.R. 3076: 58 (D) 44 (R)

POSTAL REFORM

An amended version of the bill Amended version of H.R. addresses previous NARFE concerns 3076 passed the House by and includes provisions that would a vote of 342-92. prevent unintended increases to Federal Employees Health Benefits (FEHB) plan premiums for all federal employees and retirees, preserve choice for current postal retirees regarding whether to enroll in Medicare Part B, repeal the mandate to prefund future postal retiree health benefits, and codify the standard six-day mail delivery schedule.

H.R. 695/S. 145: USPS Fairness Repeals the U.S. Postal Service’s Act / Rep. Peter DeFazio, D-OR / prefunding requirement.

Sen. Steve Daines, R-MT Cosponsors: H.R. 695: 218 (D) 59 (R) S. 145: 5 (D) 5 (R)

Advanced from the House Committee on Oversight and Reform in a 22-18 vote

Codifies several recommendations for OPM by the National Academy of Public Administration (NAPA), such as clarifying that OPM stands at the center of federal civilian human resource management and ensuring the director of OPM possesses human capital and leadership expertise.

Cosponsors: H.R. 6398: 15 (D) 0 (R) S. 3518: 11 (D) 0 (R) 1 (I) H.R. 564/S. 1158: Comprehensive Paid Leave for Federal Employees Act / Rep. Carolyn Maloney, D-NY / Sen. Brian Schatz, D-HI

LATEST ACTION(S)

Referred to the House Committee on Oversight and Reform (H.R. 695) / Referred to the Senate Committee on Homeland Security and Governmental Affairs (S. 145)

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NARFE BILL TRACKER

THE NARFE BILL TRACKER IS YOUR MONTHLY GUIDE TO LEGISLATION NARFE IS FOLLOWING. CHECK BACK EACH ISSUE FOR UPDATES. BILL NUMBER / NAME / SPONSOR

ISSUE

H.R. 304: The Equal COLA Act / Rep. Gerry Connolly, D-VA Cosponsors: H.R. 304: 24 (D) 3 (R) H.R. 4315: The Fair COLA for Seniors Act / Rep. John Garamendi, D-CA FEDERAL ANNUITIES

Cosponsors: H.R. 4315: 46 (D) 1 (R) H.R. 4268: Federal Retirement Fairness Act / Rep. Derek Kilmer, D-WA Cosponsors: H.R. 4268: 19 (D) 12 (R)

WHAT BILL WOULD DO

Provides Federal Employees Retirement Referred to the House System (FERS) retirees with the same Committee on Oversight annual cost-of-living adjustment (COLA) and Reform as Civil Service Retirement System (CSRS) retirees.

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

Referred to the House Committees on Ways and Means, Veterans’ Affairs, Oversight and Reform, and Armed Services

Allows federal employees who started their careers in temporary positions before transitioning into permanent roles to retroactively contribute toward their retirement for the years they held a temporary position.

Referred to the House Committee on Oversight and Reform

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LATEST ACTION(S)

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Questions & Answers

Q&A

THE FOLLOWING QUESTIONS & ANSWERS were compiled by NARFE’s Federal Benefits Institute experts. NARFE does not provide legal, financial planning or tax advice or assistance.

EMPLOYMENT

CONTRIBUTIONS TO THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND (CSRDF)

Q

I had previously taken a refund of my civil service retirement contributions upon leaving federal service many years ago. However, I was rehired in 2018 and I have now paid that back (plus interest). Is the amount I paid back tax deductible?

Plan (TSP) account to buy an annuity after I’ve left government service? Later, I would like to buy another TSP annuity when annuity rates are more favorable. Can I purchase more than one?

A

A

The Civil Service Retirement System (CSRS) or Federal Employees Retirement System (FERS) retirement contributions that are deducted from your salary or that you pay as a deposit/redeposit into the CSRDF are paid with after-tax money.

However, once you are retired and begin receiving CSRS or FERS retirement benefits, you will be able to claim a small portion of your benefit each year on a tax-free basis, as it represents money you are receiving that was already taxed. Once your retirement application has been fully processed and adjudicated and you file your tax return, the total contributions that you have paid to the CSRDF are recovered through a calculation based on your life expectancy. If you 18

NARFE MAGAZINE APRIL 2022

take a refund of your retirement contributions rather than collect a life annuity under CSRS or FERS, you will only report the interest, if any, as taxable income.

You can learn more about reporting your retirement income in IRS publication 721, Tax Guide to U.S. Civil Service Retirement Benefits: www.irs.gov/forms-pubs/ about-publication-721.

THRIFT SAVINGS PLAN ANNUITY

Q

I plan to separate from federal service at age 57 with 22 years, but I will be postponing my FERS retirement benefit until age 60 to avoid a permanent reduction for early age under the MRA + 10 retirement rules. Will I be able to use money that I’ve saved in my Thrift Savings

Once your agency payroll office has notified the TSP that you have separated from federal service, you can exercise any of your TSP withdrawal options at any time.

Be aware that an annuity is not the same as a TSP installment payment. Once you purchase an annuity, you will not be able to change that election; however, you are permitted to purchase more than one TSP annuity. The minimum amount required to purchase an annuity is $3,500.

In addition to the amount used to purchase your annuity, there are other factors that affect the amount of your monthly annuity payments: • The annuity option you choose.

For example, you can choose level payments or increasing payments that rise by 2 percent

each year. You can also protect your beneficiaries by adding a cash refund or 10-year certain feature, or you may purchase a joint life annuity. The features that are added to protect your annuity will lower your monthly payment.

• Your age when your annuity is purchased. Remember that your payments will be larger if you are older at the time of purchase.

• The age of your spouse or other joint annuitant if you choose a joint annuity, because the annuity will be computed over both life expectancies. Again, payments are larger if your joint life expectancy is lower.

• The interest rate index when your annuity is purchased.

Since 2002, these rates have been as low as 1.375 percent and as high as 5.625 percent.

The rate is fixed for the life of your annuity at the time of purchase. Unlike buying a mortgage, when buying an annuity higher interest rates are more favorable.

In addition to the purchase of a TSP annuity, you may consider taking monthly, quarterly or annual installment payments directly from the balance of your TSP investment. With this option, you can change the frequency of the payments and the amount of each payment, and you can start and stop the payment. You can also exercise as many partial withdrawals as you need, as there is no limit on the number of withdrawals you can take after you retire—but processing times limit you to no more than one every 30 calendar days. You may also transfer some or all of your TSP balance to an IRA.

For more details on TSP withdrawal options, check out NARFE’s Guide to TSP Withdrawal Options, available on the NARFE website (www.narfe. org). You can also refer to the following booklets: Withdrawing From Your TSP Account, www. tsp.gov/publications/tspbk02. pdf, and TSP Annuities Fact Sheet, www.tsp.gov/publications/ tspfs24.pdf.

INVOLUNTARY SEPARATION/SEVERANCE VS. VOLUNTARY SEPARATION/VSIP

Q

I am age 63 with six years of FERS service.

My position is being relocated to an office 600 miles away, and if I don’t relocate, my agency has informed me that it might have to terminate me involuntarily. If that happens, I was told that I would not qualify for severance pay. Is this true? Will I be entitled to a buyout payment or Voluntary Separation Incentive Payment (VSIP)?

A

Since you are over age 62 with more than five years of service, you are entitled to an immediate retirement benefit under FERS. When eligible for an immediate retirement, regardless of whether you are being separated involuntarily or leaving by choice, you are not eligible for severance pay. This is true even if you choose not to apply for the retirement benefit.

Here is a fact sheet regarding the rules for severance pay: www.opm.gov/policy-dataoversight/pay-leave/payadministration/fact-sheets/ severance-pay/.

VSIP authority, also known as buyout authority, allows agencies that are downsizing or restructuring to offer employees a lump-sum payment as an incentive to voluntarily separate.

If offered, you would qualify for a VSIP (buyout) payment. You may want to ask your agency HR department whether it plans to offer a VSIP. The amount of the payment is computed based on the formula for a severance allowance, which means that even if the buyout has a maximum payout of $25,000, you will be entitled to one week’s basic pay for each year of civilian service up through 10 years, plus two weeks’ basic pay for each year of creditable service beyond 10 years. In addition, an age adjustment allowance of 2.5 percent is added for each full quarter of a year that you are over 40 years of age. This means that with six years of service, the allowance would be computed as six weeks of pay plus the age adjustment up to the maximum VSIP payment allowance. To learn more, go to www.opm. gov/policy-data-oversight/ workforce-restructuring/ voluntary-separation-incentivepayments/.

RETIREMENT LONG-TERM CARE INSURANCE ELIGIBILITY

Q

Are those who already have dementia or Alzheimer’s still eligible to obtain long-term care (LTC) insurance through the Federal Long Term Care Insurance Program (FLTCIP)?

NARFE MAGAZINE www.NARFE.org

19

Questions & Answers

A

Unfortunately, if someone has been diagnosed with dementia or Alzheimer’s disease before applying for LTC insurance through the FLTCIP, that’s a disqualifying condition.

You can refer to Page 4 of the underwriting application using the following weblink to see a list of medical conditions that could disqualify an individual from securing LTC insurance: https://cdn.ltcfeds.com/planningtools/downloads/3.0-FullUnderwriting-Application.pdf.

Once you have purchased a FLTCIP policy, it will not be canceled as long as the insured doesn’t miss a premium payment on their LTC insurance.

Premiums typically cease when the benefits are being used by the insured. You may be eligible to receive the benefits under your plan if a licensed health care practitioner has certified in the past 12 months that you are unable to perform, without substantial assistance from another person, at least two activities of daily living for an expected period of at least 90 days due to a loss of functional capacity, or you require substantial supervision due to a severe cognitive impairment.

The maximum number of years of coverage (known as the benefit period) that you can purchase with the currently available 3.0 version of the FLTCIP is five years (in addition to two-year and three-year benefit periods). The benefit period that you choose is the length of time benefits will be paid if you receive benefits each day equal to your full daily benefit amount (DBA).

If you receive services that cost less than your DBA or you don’t receive services every day, your benefits can last longer than your benefit period. The benefit period and DBA are used to calculate the

20

NARFE MAGAZINE APRIL 2022

maximum lifetime benefit (MLB), the maximum amount your coverage can pay. To calculate your MLB, multiply your DBA by your benefit period (in days).

Of course, depending upon which inflation option you choose (future purchase versus automatic compounding), that will affect both your premium and the value of your policy in the future.

For more details, visit www. ltcfeds.com or give them a call at 1-800-LTC-FEDS (1-800-5823337 or TTY 1-800-843-3557 or international 1-571-730-5938) if you have additional questions regarding the program.

RECENTLY RETIRED CSRS OFFSET

Q

I retired recently as a CSRS Offset employee with 26 years of federal service. I have 29 years of substantial Social Security earnings. Ten of those years were while I was CSRS Offset, and the other 19 years comes from work that I did outside of my federal career. Would one additional year of substantial Social Security earnings negate any offset?

A

First, congratulations on your retirement. In your case, there are two different reductions to discuss.

First, the reduction or “offset” to your CSRS annuity. Second, the potential reduction to your earned Social Security benefit.

Since you have officially retired from federal service, the reduction to your CSRS annuity from OPM will be based on your 10 years of CSRS Offset service when you paid into both CSRS and Social Security. Those years and the total Social Security amount payable at retirement or age 62 (whichever is later) will be used to compute this offset.

For more details about the offset

to your annuity, refer to the Retirement Facts 13 Pamphlet titled, “CSRS Offset Retirement,” available at www.opm.gov/ retirement-services/publicationsforms/pamphlets/ri83-19.pdf.

In addition to the offset to your CSRS benefit, your earned Social Security benefit may be subject to a modified formula that will lower the amount of your benefit due to the Windfall Elimination Provision (WEP). You can be exempt from this provision by having 30 years of “substantial” earnings covered by FICA tax withholding. Since you have 29 years of such earnings, earning another year of substantial wages would make your Social Security benefit exempt from the WEP. Learn more about the WEP at www.ssa.gov/planners/retire/ wep.html.

TSP REQUIRED MINIMUM DISTRIBUTIONS

Q

If I choose a specific monthly dollar amount that I want to receive from the TSP, how will I know whether that amount will meet the IRS required minimum distribution (RMD) for the year once I reach age 72? Do I have to compute this amount myself each year?

A

As you noted, per the Internal Revenue Code (IRC), you must begin receiving distributions from your account in the calendar year you become age 72 and are separated from federal service. Your entire TSP account—both traditional and Roth—is subject to these required minimum distributions (RMDs). RMDs are calculated using your age, your prior yearend account balance, and the IRS Uniform Lifetime Table.

You will fully or partly satisfy your RMD with any withdrawals you choose to make. If you don’t

make any withdrawals or if your withdrawals fall short of the required amount, the TSP will automatically send you the amount that’s still required.

The first year you are age 72 or older and separated from service is called your first distribution calendar year. If you do not withdraw enough to meet the requirement during your first distribution calendar year, the TSP must disburse your first RMD to you by April 1 of the following year. That date is called your required beginning date, and it happens during your second distribution calendar year. For administrative purposes, the TSP will issue this RMD on March 1 or the last business day before March 1 of your second distribution calendar year. Your RMD deadline

for your second distribution calendar year is December 31 of that same year. If you do not withdraw enough to meet the requirement for that year, the TSP will send your remaining RMD in December. In the years that follow, you’ll have just one RMD, due December 31, and the TSP will continue to send any remaining RMD in December of each year should you fail to meet the requirement through withdrawals you initiate on your own.

For more details about RMDs, visit www.tsp.gov/publications/ tsp-775.pdf.

To obtain an answer to a federal benefits question, NARFE members should call 800-456-8410 and select option 2 for the Federal Benefits Institute; send the question by postal

NARFE AT YOUR SERVICE At NARFE Headquarters, experts are available to answer questions and assist in helping with a variety of benefit matters.

CALL NARFE AT

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

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Benefits Brief

Health Insurance Options When Your Child Turns 26

T

he Affordable Care Act extended health care coverage for parents’ children until age 26. When children turn 26, they are no longer eligible family

members under Federal Employees Health Benefits (FEHB) plans. They will have a 31-day temporary extension of coverage at no cost. What health insurance options are there for adult children who haven’t acquired health insurance through their employer?

• They could continue coverage in an FEHB plan through the Temporary Continuation of Coverage (TCC)—known as COBRA in the private sector.

• They could convert to an individual policy offered by your FEHB plan.

• They would be eligible to apply for insurance through the Health Insurance Marketplace (Exchange).

Temporary Continuation of Coverage. The TCC option allows your child to stay in an FEHB plan for up to 36 months.

Preexisting conditions are covered. While TCC provides good coverage, the premiums are high, as they are the normal employee premium plus the government share, plus a 2 percent administrative fee.

Contact your agency’s HR office within 60 days after your child’s 26th birthday to receive information on how to enroll.

Your child has 60 days from the later of his or her 26th birthday, or the date of the TCC notice from HR, to request enrollment for TCC. Read OPM’s FEHB Fast Facts summary of benefits

22

NARFE MAGAZINE APRIL 2022

at www.opm.gov/healthcareinsurance/fastfacts/childturning-age-26.pdf.

For more comprehensive information on TCC, visit http://www.opm.gov/ healthcare-insurance/ healthcare/temporarycontinuation-of-coverage/.

For TCC premiums, visit http://www.opm.gov/ healthcare-insurance/ healthcare/plan-information/ premiums/.

Convert to an Individual Policy. When your child’s enrollment terminates, he or she is entitled to convert to an individual policy offered by the carrier of your plan.

No evidence of insurability is required. The conversion contracts may provide fewer benefits at a higher cost than what is offered under FEHB, so read them carefully. To apply for conversion, you or your child must make a written request to the carrier of your plan within 31 days after his or her coverage as a family member terminates. The carrier will provide cost details. For more on conversion to an

individual policy, visit www. opm.gov/healthcare-insurance/ healthcare/reference-materials/ fehb-handbook/.

Health Insurance Marketplace. The plans available through Marketplace, or “Exchange,” can be less expensive as they are subsidized by the government based on income. Preexisting conditions are covered. The Marketplace provides four plan categories: Bronze, Silver, Gold and Platinum. The category indicates how you and the plan share in the health care costs but does not affect the quality of care.

The cost of the plans is based on household income and size, ZIP code, how many people are covered and their ages. The Marketplace is subsidized for those who have lower income.

Plans with lower premiums may have higher out-of-pocket expenses, while plans with higher premiums may have lower out-of-pocket expenses.

For more details, visit www. healthcare.gov/.

Cautions: Read the policy to obtain a good understanding of what the insurance does and does not cover, including care, services and prescription drugs. In addition, pay close attention not only to the monthly premiums, but also the deductibles, copayments and other provisions of the plans.

—MICHELE BOLLIER IS A RETIREMENT AND BENEFITS SPECIALIST WITH RETIRE FEDERAL.

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State Tax Treatment

FEDERAL ANNUITIES of

24

NARFE MAGAZINE APRIL 2022

TAX YEAR

T

2021

he latest edition of the NARFE state tax roundup is here just in time for tax filing. The following pages contain the most up-to-date information on your state’s tax situation. Use this guide to learn if there have been any changes to the way your state treats your federal annuity or retirement income. The NARFE team combed through every state’s tax code to provide a comprehensive guide in the pages that follow, so give it a good, thorough read. And don’t forget to share the information with others so they don’t miss out on potential savings.

This roundup of state tax treatment of federal annuities and other tax information is presented for informational purposes only and does not constitute professional tax advice. NARFE has taken all reasonable efforts to ensure that the information contained in this roundup is accurate at the time of publication; however, NARFE cannot guarantee the completeness or accuracy of this information and is not responsible for any errors or omissions. Please consult a tax professional for advice in preparing tax returns. The information also is available on the NARFE website, www.narfe.org.

tates With No Personal S Income Taxes ALASKA FLORIDA NEVADA NEW HAMPSHIRE1 SOUTH DAKOTA

TENNESSEE TEXAS WASHINGTON WYOMING

New Hampshire: Taxes interest/dividend income at 5% if it exceeds $2,400 (single) or $4,800 (couple). $1,200 exemption for residents age 65+ (see p. 30).

1

States Exempting Total Amount of Civil Service Annuities* ALABAMA HAWAII ILLINOIS KANSAS LOUISIANA

MASSACHUSETTS MISSISSIPPI NEW YORK PENNSYLVANIA

KENTUCKY: Amount attributable to service prior to January 1, 1998, is exempt. See p. 28 for taxation of annuities attributable to service on or after January 1, 1998.

MICHIGAN: Full exemption only applicable to taxpayers born before 1946. See p. 28 for taxation of federal (and other) pension income for taxpayers born in 1946 and later.

NORTH CAROLINA: Annuities not taxed if the individual had five years of federal government service as of August 12, 1989. If

* In addition, the five states listed below exempt certain federal civil service annuities from taxation. Some exemptions depend on the taxpayer’s age or dates of government service. otherwise, see p. 30.

OKLAHOMA: CSRS annuities excluded from taxation. Taxpayers with annuities with both FERS and CSRS components may exclude the portion attributable to CSRS service.

OREGON: Annuities not taxed if individual retired before October 1, 1991. Those who retired after October 1, 1991, are taxed only on that portion of the annuity attributable to federal government service after October 1, 1991.

TAX YEAR Other Exemptions ALABAMA: SS, federal retirement, military retirement and state pension income are exempt. Income from all defined-benefit pension plans is exempt. Income from distributions from accounts like IRAs and 401(k)s are partially taxable.

ARIZONA: SS is exempt. Income from benefits, annuities or pension as retired or retainer pay of the uniformed services is exempt. Up to $2,500 total of civil service and Arizona state and local government pensions are exempt per taxpayer.

Additional personal exemption for all residents age 65+.

ARKANSAS: SS and military retirement benefits are exempt. Up to $6,000 is exempt from public or private employment-related pension plan. IRA distributions can be included as part of the exemption if the taxpayer is age 59.5+.

CALIFORNIA: SS is exempt.

Additional $122 personal exemption for residents age 65+.

All private, public and military pensions are taxed.

COLORADO: SS income that is not taxed by the federal government is exempt. There is a $24,000 pension/ annuity exemption for all taxpayers age 65+, $20,000 pension/annuity exemption for all taxpayers between ages 55 and 64.

CONNECTICUT: SS is exempt if federal AGI is below $75,000 for those single or MFS and AGI of $100,000 or less if MFJ. For those with an AGI below $75,000 (single, MFS) or $100,000 (MFJ, HH), other pension and annuity income is subject 26

NARFE MAGAZINE APRIL 2022

to a percentage deduction (42%).

Military retirement pay is exempt.

DELAWARE: SS is exempt.

Taxpayers age 60+ may exclude $12,500 of investment and qualified pension income, as well as IRAs and 401(k)s, and qualify for an additional tax credit of $110. Taxpayers under age 60 may exclude $2,000.

Taxpayers age 65+ are entitled to an additional standard deduction of $2,500 (if not itemizing). Single or MFS taxpayers age 60+, or totally disabled, may exclude $2,000 if earned income is less than $2,500 and AGI is $10,000 or less. If MFJ and both spouses are age 60+, or are totally disabled, they may exclude $4,000 if earned income is less than $5,000 and AGI is $20,000 or less.

DISTRICT OF COLUMBIA: SS is exempt. For taxpayers age 62+, DC and federal government survivor benefits are exempt. Other retirement income is not exempt. State government and public pensions are taxed. For those born before Jan. 2, 1957, or are blind, standard deductions increase by $1,350 for MFJ/MFS/QW and $1,700 for S/HH. GEORGIA: SS is exempt. Taxpayers who are age 62 to 64, or permanently and totally disabled regardless of age, may exclude $35,000 of retirement income. For taxpayers age 65+, the retirement income tax exclusion is $65,000. Retirement income includes income from pensions and annuities, interest income, dividend income, net income from rental property, capital gains income and income from royalties. Up to $4,000 of the maximum allowable exclusion may be earned income.

HAWAII: SS is exempt. Federal retirement, military retirement, state or county retirement system pension

2021 Key to Abbreviations AGI=Adjusted Gross Income CSRS=Civil Service Retirement System FERS=Federal Employees Retirement System HH=Head of Household IRA=Individual Retirement Account MFJ=Married Filing Jointly MFS=Married Filing Separately QW=Qualified Widow(er) RR=Railroad Retirement* SS=Social Security *Federal law does not permit states to tax Railroad Retirement income. Exemption is not noted in roundup except where it affects provisions.

income, and distributions from exclusively employer-funded pensions are exempt. Distributions from employer-funded pensions to which an employee also contributed may be fully or partially taxed. Additional personal exemption of $1,144 per person age 65+.

IDAHO: SS is exempt. Retirement benefits deduction available for CSRS annuitants who established CSRS eligibility prior to 1984 and are age 65+, or 62+ and disabled, in the amount of $37,776 (if single) or $56,664 (if MFJ) minus SS and RR received. Deduction includes workers under the Foreign Service Retirement and Disability System (FSRDS).

Retirement benefits deduction also available for military retirees. Persons using MFS status are not eligible for the retirement benefits deduction.

Extra standard deduction for persons age 65+.

ILLINOIS: SS and income from any qualified employee benefit plan are exempt (including federal government plans). Pension or retirement savings accounts like 401(k) plans, an IRA, or

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TAX YEAR

2021

a traditional IRA that has been converted to a Roth IRA are exempt. Extra personal exemption for persons age 65+.

income, of which taxpayers may exclude up to $31,110. An additional credit of $40 for each individual age 65+.

pension income from Massachusetts public employees. Additional exemption of $700 for each individual age 65+.

INDIANA: SS is exempt. Taxpayers may exclude as much as $6,250 of military retirement income, plus 75% of the amount that exceeds $6,250.

Taxpayers age 62+ may deduct up to $16,000 from a federal civil service annuity minus the total amount of any SS or RR benefits. Taxpayers can take a $1,000 personal exemption, while taxpayers age 65+ can take an additional personal exemption of $1,000. An additional personal exemption of $500 can be taken by a spouse age 65+ with a federal AGI that is less than $40,000 ($20,000 for MFS).

LOUISIANA: SS is exempt. Federal retirement annuities are exempt.

In addition, persons age 65+ may exclude up to $6,000 of annual retirement income from their taxable income if single, $12,000 if MFJ and both are receiving retirement income. If only one spouse has retirement income, the exclusion is limited to $6,000.

MICHIGAN: SS and military pensions are exempt. Other pension and retirement benefits are taxed differently depending on the age of the taxpayer. Federal, state and local pensions are exempt for individuals born before 1946, as are private pension and retirement benefits up to $54,404 if filing single or MFS, or $108,808 if MFJ. Taxpayers born after 1954 cannot deduct retirement income.

However, once taxpayers reach 67 years of age, they can take a standard deduction of $20,000 (S) or $40,000 (MFJ) against all income, subject to conditions that depend on whether they were born before or after 1952. Additional deductions exist for SS exempt employment based on age and retirement date.

IOWA: SS and military retirement benefits are exempt. Taxpayers who are age 55+ or are disabled may exclude up to $6,000 (S, HH, QW) or $12,000 (MFJ or MFS) of pension or annuity income (including civil service annuities), self-employed retirement plan income, deferred compensation, IRA distribution or other retirement plan benefit income.

Additional $20 personal exemption credit for those age 65+.

KANSAS: SS is exempt if federal AGI is $75,000 or less. Federal, military and in-state/local pensions are exempt. For those age 65+ and/or blind, an additional deduction of up to $10,800 is available; amount is dependent on tax filing status and whether the resident and/or spouse is blind.

KENTUCKY: SS is exempt. Federal civilian and military retirement annuities attributable to service prior to Jan. 1, 1998, are excluded.

Annuities attributable to service after Jan. 1, 1998, are included as pension 28

NARFE MAGAZINE APRIL 2022

MAINE: SS and military retirement benefits, including survivor benefits are exempt. The taxpayer and spouse may each deduct from federal AGI $10,000 of eligible pension income, including federal civil service annuity income.

MARYLAND: SS is exempt. If age 65+ or totally disabled, you may exclude up to $34,300 in pension income, under certain conditions.

Additional $1,000 exemption for residents who are blind or age 65+. If a dependent over 65 is claimed, you can also receive an extra exemption of up to $3,200. Military retirement subtraction up to $15,000 if 55+; $5,000 for those under age 55. To qualify for this subtraction, you must have been a member of an active or reserve component of the U.S. military, an active duty member of the commissioned corps of the Public Health Service, the National Oceanic and Atmospheric Administration, the Coast and Geodetic Survey, or a member of the Maryland National Guard, or the member’s surviving spouse or ex-spouse.

MASSACHUSETTS: SS, federal civil service and military pensions are exempt. Tax reciprocity with local/ state governments that do not tax

MINNESOTA: Certain types of military pensions or other military retirement pay may be subtracted from taxable income if included in your federal AGI. To claim this subtraction, the qualifying income must be included in federal adjusted gross income. Taxpayers 65+ and those with a permanent total disability may be eligible for subtraction, based on income.

Additionally, interest received from a federal government source may be eligible for subtraction.

MISSISSIPPI: SS and retirement income from federal, state and private retirement systems are exempt, along with qualified retirement income.

Additional exemption of $1,500 for residents who are blind or age 65+.

MISSOURI: Military retirement

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TAX YEAR income exempt in cases of disability as a result of military service. Taxpayers with AGI under $85,000 (single, HH, MFS, QW) or $100,000 (MFJ) may exempt the greater of $6,000 or 100 percent of any federal, state or local pension income, up to a maximum of $39,365 per taxpayer. Taxpayers with AGI exceeding the limitation may qualify for a partial exemption. Taxpayers age 62+ or disabled with an AGI under $85,000 (single, HH, MFS, QW) or $100,000 (MFJ) may exempt 100 percent of the taxable amount of SS or SS disability benefits. Taxpayers with AGI exceeding the limitation may qualify for a partial exemption.

MONTANA: Additional exemptions if age 65+ and/or blind. Taxpayers age 65+ may exempt $800 ($1,600 if MFJ) of interest income reported in Montana AGI. You may exempt up to $4,400 of pension income per taxpayer; however, your exemption is reduced by $2 for every $1 your AGI exceeds $36,700. The instructions note that you are more likely to receive the full exemption if MFS. NEBRASKA: Public and private pension income is fully taxed. For taxable years beginning on or after January 1, 2021, federal adjusted gross income (AGI) is reduced by a percentage of the social security benefits that are received and included in federal AGI. For tax year 2021, the percentage reduction is 5%. Taxpayers can claim either the percentage reduction enacted

by LB 64 or the previously existing exemption for low-income recipients, whichever is greater. Taxpayers with AGI less than or equal to $59,960 MFJ or $44,460 for all other returns may deduct 100 percent of SS income included in their federal AGI. Military retirees may make 30

NARFE MAGAZINE APRIL 2022

a one-time election within two calendar years after the date of their retirement from the military, even if they do not begin receiving military retirement benefits immediately upon retirement. Military retirees can choose to exclude 40 percent of their military retirement benefit income for seven consecutive taxable years or can exclude 15 percent of military retirement benefit income for all taxable years beginning with the year the retiree turns 67.

NEW HAMPSHIRE: SS is exempt.

A 5 percent tax is applied only to interest and dividend income exceeding $2,400 ($4,800 for joint filers). Residents age 65+—as well as those of any age who are blind, and those under 65 who are disabled and unable to work—qualify for an additional $1,200 exemption for taxable dividends and interest.

NEW JERSEY: SS and military pensions are exempt. Taxpayers age 62+ may exclude all or part of their taxable pensions, annuities and IRA withdrawals if their gross income for the entire year before subtracting any pension exclusion does not exceed $150,000. The maximum amount excluded depends on filing status. For tax year 2020, MFJ can exclude up to $100,000; S, HH, or QW, can exclude up to $75,000; and MFS, can exclude up to $50,000.

Under certain conditions, additional amounts from retirement plans may be eligible for special exclusion if you (and your spouse if MFJ) will never be able to receive SS or railroad benefits because your employer did not participate in either program.

You can claim $6,000 if MFJ, or $3,000 if S/MFS. Additional $1,000 personal exemption for residents age 65+ or blind.

2021 NEW MEXICO: Retirement benefits are taxed. Taxpayers age 65+ with an AGI less than $28,500 (S), $51,000 (MFJ, HH, QW) or $25,500 (MFS) qualify for a deduction of $8,000.

Taxpayers under 65 can claim an exemption of $2,500 if AGI is less than $36,667 (S) or $55,000 if MFJ. If age 100+, all income exempt from state income tax if centenarian is single or spouse is also 100+ and no other dependents can be claimed.

NEW YORK: SS and state, local and federal pensions, including military and civil service, are exempt. An additional pension and annuity income exclusion of up to $20,000 is available to persons age 59+. Outof-state government pensions can be deducted as part of a $20,000 exemption.

NORTH CAROLINA: SS is exempt.

Under the Bailey Settlement (Bailey vs. North Carolina), federal retirement benefits and military benefits are exempt only for those who had five or more years of creditable service as of August 12, 1989.

NORTH DAKOTA: SS exempt.

Military retirement benefits are exempt. All other retirement income is fully taxed.

OHIO: SS and military pensions are exempt. General retirement income credit available starting at $25 if qualifying retirement income is at least $501; the credit tops out at $200 if qualifying retirement income is $8,001 or more. Residents age 65+ are entitled to a $50 tax credit per return. Taxpayers who served in the military and receive a federal civil service retirement pension are eligible for a limited deduction if any portion of their federal retirement

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TAX YEAR pay is based on credit for their military service. These retirees can deduct the percentage (in terms of years of service) of the amount of their federal retirement pay that is attributable to their military service.

OKLAHOMA: SS is exempt. Each individual may exclude 100 percent of retirement benefits received from CSRS, including survivor benefits, paid in lieu of SS to the extent that these benefits are included in the federal AGI. Retirement benefits paid under FERS do not qualify for this exclusion. However, for retirement benefits containing both a FERS and a CSRS component, the CSRS component will qualify for the exclusion. Individuals may exclude their FERS retirement benefits or other qualifying retirement income up to $10,000. Individuals may exclude the greater of 75 percent of their military retirement benefits or $10,000. Additional personal exemption of $1,000 for age 65+ if federal AGI is $15,000 or less (single), $25,000 or less (MFJ), $12,500 or less (MFS), or $19,000 or less (HH).

OREGON: SS is exempt. Federal pension income of those individuals who retired before Oct. 1, 1991, are not taxed. Those who retired after Oct. 1, 1991, are taxed only on that portion of the annuity attributable to government service after Oct. 1, 1991. TSP withdrawals made during retirement are eligible for federal pension income subtraction based on dates of service. If the taxpayer moves money from a TSP to another type of account, the account loses its character and future withdrawals would not be eligible for subtraction from taxable income. Taxpayers age 62+ may qualify for retirement income credit if household income is below $22,500 (or $45,000 if MFJ).

32

NARFE MAGAZINE APRIL 2022

Additional standard deduction if age 65+ of $1,200 (single, HH), $1,000 each spouse age 65+ (MFJ, MFS and QW).

PENNSYLVANIA: SS, federal civil service retirement benefits, military retirement benefits and employersponsored retirement plan benefits are exempt. Distributions from a 401(k) plan, IRA or Thrift Savings Plan are exempt for retirees 59+.

RHODE ISLAND: SS is only exempt for MFJ with federal AGI of $111,200 or less; $88,950 or less for single taxpayers. Those born on or before January 1, 1955 may exempt up to $15,000 of qualified pension or retirement income if they have a federal AGI of $109,050 or less (MFJ), $87, 225 or less (MFS), or $87,200 or less (single).

SOUTH CAROLINA: SS is exempt.

Those 65+ may deduct $10,000 of qualified retirement income, while those under age 65 may deduct $3,000 of other qualified retirement income (including federal retirement plans). All individuals age 65+ are entitled to a $15,000 (single) or $30,000 (MFJ) senior deduction from income, reduced by any deduction claimed for qualified retirement income. Military retirees under age 65 may deduct up to $17,500 of military retirement income but must have other earned income to do so. Military retirees 65+ can deduct $30,000 of military retirement income with no requirement for other earned income.

UTAH: Taxpayers born on or before Dec. 31, 1952, may be entitled to a retirement credit of up to $450 ($900 MFJ). The credit is phased out at 2.5 cents per dollar of modified AGI over $16,000 (MFS), $25,000 (single) and $32,000 (MFJ, QW, HH).

2021 VERMONT: SS only exempt for single filers making less than $45,000 a year ($60,000 MFJ); partially exempt with income up to $55,000 ($70,000 MFJ). With the exception of Railroad Retirement benefits, pensions and retirement income are fully taxed.

Taxpayers 65+ eligible for additional deduction of $1,050.

VIRGINIA: SS is exempt. Taxpayers age 65+ may claim an age deduction: Those born on or before Jan. 1, 1939, may claim an age deduction of $12,000. Those born between Jan. 2, 1939, and Jan. 1, 1957, will have the $12,000 deduction reduced by $1 for every $1 that federal AGI exceeds $50,000 (single) or $75,000 (MFJ, MFS). Additional personal exemption of $800 if age 65+.

WEST VIRGINIA: Residents can exempt $2,000 of civil and state pensions. Military retirement income and federal law enforcement income is exempt. Taxpayers age 65+ may exclude up to $8,000 (S) or $16,000 (MFJ) of remaining nonexempt income.

WISCONSIN: SS and military retirement benefits are exempt, as is retirement pay related to service with the Coast Guard or the respective commissioned corps of the National Oceanic and Atmospheric Administration or the Public Health Service. CSRS/FERS pay is exempt if the individual’s account was established prior to 1964 or if the individual is receiving payments from the system as a beneficiary of such an account. If age 65+, may exempt up to $5,000 of retirement income if federal AGI is less than $15,000 (S, HH) or $30,000 (MFJ or MFS).

Personal exemption of $700 and additional exemption of $250 if age 65+.

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THE NEW REALITIES OF FEDERAL WORK

How the Pandemic Has Affected Government Jobs and Hiring

BY EVERETT A. CHASEN

The COVID-19 pandemic has posed a once-in-ageneration challenge for workers around the world, changing the status quo. The federal government is no exception.

“Things are now very different for federal employees—about 100 percent different” says Kathryn Troutman, author of the Federal Resume Guidebook and president of Resume Place, Inc., a company that provides federal employees and agencies with career virtual training, consulting and resume writing services.

“On March 14, 2020,” she says, “most employees changed from working at a desk in a building to working at home on their computer.

They used Zoom or Adobe or Microsoft Teams to communicate with their supervisors, team members, customers and everyone else through meetings. So, they’re having more meetings than 34

NARFE MAGAZINE APRIL 2022

ever before. And they’re still trying to provide the same exact services as they used to without seeing people in person and without traveling to locations when they need to.

“Government work is much harder than it used to be, because you are not there to follow up and resolve problems on site at the moment they occur.”

In late 2021, the Office of Personnel Management (OPM) issued a Guide to Telework and Remote Work in the Federal Government, replacing a previous guide written a decade earlier. The document acknowledges the changes the pandemic brought to the workplace.

“Many employees learned how to perform the functions of their job in a new way during a difficult time, meeting the challenges head-on,” OPM writes. “Agencies demonstrated

that they have been able to carry out their missions effectively.”

OPM’s director, Kiran Ahuja, told a Government Executive podcast in December 2021, “We want to say, here’s a menu of options, especially around telework and remote work. Telework should not be focused on individuals and whether you trust that an individual can (work remotely). It should be tied to the position. We’re going to be rethinking what it means around duty stations and how agencies are thinking about their regional offices.” As of press time, the federal government was continuing to operate with maximum telework flexibilities.

Feds Step Up to Meet Challenges

COVID-19 has placed a number of obstacles in the way of government employees doing their jobs—

many of which have been and can be overcome through persistence and creativity. C.T., a financial program manager at an Air Force installation overseas, was asked to serve in an interim position because the person who was originally selected for the position was unable to head overseas due to coronavirus-related travel restrictions.

In her interim position, C.T. was responsible for managing program managers and readiness specialists who provided military members and their families at her installation with the resources they needed for a successful assignment; this was done through classes, videos and one-on-one counseling.

Among the services military readiness centers provide are help with personal finances, such as providing financial assistance for emergencies, teaching customers how to balance a budget, and explaining how to gain the knowledge to invest their money wisely. The staff also offers voting assistance, helps separating service members learn about veterans benefits they may be eligible for, and supports family members with special needs.

The COVID-19 outbreak limited their services and classes. At the same time, the pandemic created additional need for those services, as well as for new programs to help service members and their families meet the new challenges COVID presented.

“Many service members and family members were feeling isolated in a foreign country, where language and culture were big barriers to overcome,” C.T. explains.

C.T. established, developed and led a Stress Treatment and Resiliency Team (START), which brought together organizations—including the Red Cross, the USO, the installation’s Military and Financial Life Counseling program and others—to support community members who were quarantined, restricted in their movements or required to isolate themselves as a result of coronavirus exposure.

One-on-one Zoom appointments to use the center’s services increased by more than 100 percent. Establishing hybrid virtual and in-person learning increased participation in those classes by NARFE MAGAZINE www.NARFE.org

35

COVID-19 HAS PLACED A NUMBER OF OBSTACLES IN THE WAY OF GOVERNMENT EMPLOYEES DOING THEIR JOBS—MANY OF WHICH HAVE BEEN AND CAN BE OVERCOME THROUGH PERSISTENCE AND CREATIVITY.

50 percent, and videos on resiliency were viewed more than 500 times.

Although agencies are beginning to call people back into the office, many organizations, as of press time, are still virtual. Troutman believes “they’re going to be doing more virtually, because it has worked for them—but the employees doing the work are working harder than they were before. That’s because they are no longer seeing clients, or going on site or getting a decisive answer quickly. It’s challenging.”

Troutman cited the work of A.K., an information and referral project manager for the Marine Corps who teaches workshops to facilitators and participants on how to accomplish permanent changes of station (PCS). From her home, A.K. had to quickly learn a virtual platform to train other facilitators and those who were about to begin PCS moves—twelve facilitators and more than 40 participants every month.

After only one training session, A.K. went “live” in March 2020 on the new system and learned that going virtual not only could be done successfully, but also saved the Marine Corps money on paper and other supplies. She even received a Civilian of 36

NARFE MAGAZINE APRIL 2022

the Quarter award from the installation at which she works, and customers were very positive about the change.

At least at one government facility, Troutman found that the pandemic enabled outdated procedures and practices to be replaced with more efficient ways to work. At that facility before the pandemic, hiring document packages were stored on CD-ROM disks because they were too large to transmit through normal email and needed to be encrypted and compliant with the Privacy Act. The packages were walked around from workstation to workstation as needed.

Working from home meant this outdated system could no longer continue, so employees at the facility developed a process to transmit the packages digitally and confidentially. The new system reduced a significant backlog of packages needing to be processed under the old system and will continue to be used when the facility returns to normal business operations.

The Partnership for Public Service (PPS) cited the work of Federal Executive Boards (FEBs), which coordinate the activities of federal offices from all agencies outside of Washington, DC. Some 85 percent of federal employees work outside of the capital.

Early on, FEBs shared government-wide guidance on available telework flexibilities and have continued to provide real-time information to help agencies navigate their new work environments.

“We quickly organized online meetings to meet the needs for fact-based information of Bay Area agencies,” says Sara Russell, executive director of the Federal Executive Board, in a Partnership blog post. “We also added many training opportunities on how to conduct effective video meetings and shared best practices for managing a full-time teleworking staff. … We’re pivoting to holding forums for agencies to learn from each other.”

Current Federal Hiring Trends and Considerations

While some agencies were able to hire new employees to meet COVID needs, many other offices were not. PPS reported that the federal

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workforce expanded by only an average of 0.6 percent per quarter between the start of the pandemic and December 2020, although Congress appropriated roughly $2.5 trillion in supplemental funding for federal agencies.

PPS noted that this modest growth in the federal workforce to just over 2.1 million full- and part-time employees is “overshadowed” by rampups during crises in the past. During the World War II era, for example, the federal workforce increased from 699,000 employees in 1940 to 3,370,000 at the end of the war.

Among the agencies seeing significant increases in personnel between March and December 2020 were the Departments of Veterans Affairs (VA), Navy, Air Force, Treasury and Agriculture. The Departments of Homeland Security, Health and Human Services, and certain agencies of the Department of Defense saw slight decreases.

News stories have highlighted the “Great Resignation,” in which the pandemic and subsequent changes in work have caused record numbers of people to reassess their careers, retire early, and/or quit and find new jobs and lifestyles more focused on their passions. For federal employees, Troutman says, that kind of refocusing is not a simple task.

“Although a lot of people want to change from one job series to another because of the challenges and difficulties they face in their current positions, and because they want to follow their passion, it’s hard to do in the government,” she states. “It’s challenging to translate the skills and keywords and KSAs (knowledge, skills and abilities) you have into qualifying for a new career.

“At this moment, I think, most people who are working in government are just holding on to what they are doing and watching to see what’s happening. There have been so many changes in the environment. And the pandemic is not finished.”

The many unknowns make it “kind of not a great time to jump out of whatever it is you’re in,” Troutman believes. “I think making a career change in the federal government at this moment is a little bit difficult. Maybe private sector employment is not as rigid as working for the 38

NARFE MAGAZINE APRIL 2022

government, but with all of the things that are happening now, I think federal employees working virtually need to hold on or retire.”

The Resume Place website does help people interested in switching jobs, “but I’m not telling anybody it’s easy to do. HR offices are always looking for at least one year of specialized experience. Stay put until this is over in your federal job. Things are changing a lot right now.”

Troutman offers more hope for those outside the government looking to find federal employment. USAJOBS (www.usajobs.gov) is the website for listing civil service job opportunities with federal agencies. “[Government departments] are doing as much recruitment as they can using USAJOBS,” Troutman says. “Some job announcements are so huge. Agencies are hiring hundreds or thousands of people at 20, 30 or 40 locations, and the announcements are open for a year.”

To let job seekers know about these vacancies, she created a career blog on her company’s website describing some of these hiring opportunities.

“Cyber jobs are probably the hottest vacancies out there. I’ve written about procurement specialist jobs, which will be an even hotter field now that the Infrastructure Investment and Jobs Act has been signed into law. Another big series involves health care employees, especially nurses—VA’s No. 1 job field—and social workers.”

Many federal agencies have been granted direct hire authority by OPM for certain highdemand positions, allowing them to hire qualified applicants more quickly by eliminating rating and ranking, veterans preference, and other typical selection procedures. Under a direct hire authority, all applicants who meet the minimum qualification requirements on the job announcement are referred to the hiring manager for consideration and may be selected.

“The questionnaires are shorter, and the time it takes to be hired is less,” Troutman explains.

“The agencies are serious. They’re recruiting, and they need to do so because many people have retired during the pandemic and during the last presidential administration.”

NEWS STORIES HAVE HIGHLIGHTED ‘THE GREAT RESIGNATION,’ IN WHICH THE PANDEMIC HAS CAUSED LARGE NUMBERS OF PEOPLE TO REASSESS THEIR CAREERS, RETIRE EARLY, AND/OR QUIT AND FIND NEW JOBS THAT FOCUS ON THEIR PASSIONS. FOR FEDERAL EMPLOYEES, THAT KIND OF REFOCUSING IS NOT A SIMPLE TASK.

Troutman says that the No. 1 thing it takes to get a government job in the COVID-19 era is to have a federal resume that matches the qualifications described in the job announcement. “That means matching the section called ‘specialized experience,’ which is what HR people will be looking for when they look at your resume. And if you don’t show that, you probably won’t be rated ‘best qualified.’”

Resumes, she suggests, should be five to seven pages long and include the information suggested by the USAJOBS builder, which helps applicants to format, build, update and submit resumes to federal agencies.

She advises all her clients to “add your COVID

work story to your resume. Recognize that you did go through COVID—and survived in your job.”

Resumes should also include things you’ve done that are above and beyond, showing extra value you’ve provided for your missions with your skills.

“Most people,” she explains, “don’t include accomplishments in their resume. They just write about their duties and don’t write about anything they’ve done that stands out and is exceptional.

Adding accomplishments would help a lot.”

“That’s really it,” she concludes. “That’s what you need to do.”

—EVERETT A. (EV) CHASEN IS A WRITER AND COMMUNICATIONS CONSULTANT IN THE WASHINGTON, DC, AREA. HE IS RETIRED FROM THE FEDERAL GOVERNMENT AFTER 35 YEARS OF SERVICE.

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Managing Money

New Life Expectancy Tables for Required Minimum Distributions

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or the first time in 20 years, the IRS has released new life expectancy tables for the purpose of calculating required minimum distributions (RMDs). While the switch

to the new tables will be straightforward for most retirement plan owners, a couple of situations are more complicated.

There are three possible life expectancy tables that may be used for the purpose of calculating RMDs: the Uniform Lifetime Table, the Joint and Last Survivor Table, and the Single Life Table.

The Uniform Table is used by all unmarried and married retirement plan owners whose spouse is not more than 10 years younger. The life expectancy factors found in the Uniform Table are based on the age of the retirement plan owner and a beneficiary who is exactly 10 years younger. Years ago, the IRS simplified the RMD process and permitted all retirement plan owners, regardless of their beneficiary’s actual age, to use the Uniform Lifetime Table.

The Joint and Last Survivor Table calculates the life expectancy of two individuals and may be used by retirement plan owners whose spouse is the sole beneficiary and more than 10 years younger. Please note that while the IRS permits use of this table in this situation, the Thrift Savings Plan (TSP) restricts TSP participants to the Uniform Lifetime table regardless of their spouse’s age.

The Single Life Table is used by beneficiaries who

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NARFE MAGAZINE APRIL 2022

are maintaining an inherited retirement plan and are subject to RMDs. This includes the surviving spouse of a TSP participant who is maintaining a beneficiary participant TSP account.

The new tables are a positive development for owners and

ALL RETIREMENT PLAN OWNERS, REGARDLESS OF THEIR BENEFICIARY’S ACTUAL AGE, ARE ALLOWED TO USE THE UNIFORM LIFETIME TABLE TO CALCULATE RMDS. beneficiaries subject to RMDs— they add approximately two years of life expectancy, which means RMDs will be smaller now than they would have been under the old tables. For example, the life expectancy factor for a 72-yearold retirement plan owner is 27.4 under the new Uniform Lifetime Table compared with 25.6 under the old table.

For most retirement plan owners, the update simply

means referring to the new tables to determine the life expectancy factor for 2022’s RMD, but there are a few situations in which the switch to the new tables is more complex.

One example concerns retirement plan owners who were first subject to an RMD in 2021 but delayed their 2021 RMD until 2022. In this situation, even though the 2021 RMD is distributed in 2022, it’s still a 2021 RMD and must be based on the old tables. The 2022 distribution, which must be distributed by December 31, 2022, will be based on the new table.

Another example involves nonspouse designated beneficiaries who have been taking RMDs from an inherited retirement plan prior to 2022. A nonspouse designated beneficiary uses the fixed-term method for determining the life expectancy factor each year. With the fixedterm method, a beneficiary refers to the Single Life Table only one time to determine the appropriate life expectancy factor—in the year after the year of the retirement plan owner’s death—for his or her first RMD. In each subsequent year, a nonspouse beneficiary simply subtracts one from the previous year’s factor to determine the current year’s life expectancy factor.

To make the move to the new Single Life Table, nonspouse designated beneficiaries get a one-time reset. For 2022’s factor, instead of simply subtracting one

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from the factor used in 2021, the beneficiary goes back to the year after the year of the retirement plan owner’s death to determine what his or her initial life expectancy factor would have been under the new Single Life Table. Using the new initial factor, the beneficiary subtracts one for each year that has passed since his or her first RMD to determine 2022’s factor.

For example, Denise, who inherited her mother’s IRA in 2015, had to take her first RMD in 2016, the year after the year of her mother’s death. Denise turned 62 in 2016, and according to the old Single Life Table, her life expectancy factor was 23.5 years.

Subtracting one for each year since her first RMD, her factor for 2022 would have been 17.5 under the

old table. Under the new Single Life Table, however, Denise’s life expectancy factor in 2016 would have been 25.4. Starting with 25.4, Denise subtracts one for each of the six years that have lapsed to determine her 2022 factor, which is now 19.4.

The new life expectancy tables are a welcome change for retirement plan owners and beneficiaries subject to RMDs, but be mindful when making the switch if you’re a beneficiary or an owner who delayed 2021’s RMD. MARK A. KEEN, CFP®, IS PARTNER, KEEN & POCOCK, AND AN INVESTMENT ADVISER REPRESENTATIVE AND REGISTERED PRINCIPAL OF THE STRATEGIC FINANCIAL ALLIANCE INC. (SFA). SECURITIES AND ADVISORY SERVICES ARE OFFERED THROUGH SFA.

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41

NARFE News MAKE PLANS FOR FEDCON22

NARFE Helps Members, and All Feds, Get Ahead and Get Results

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hings seem to get more complicated for Feds each day as new policies in Washington or staffing issues at key agencies like the Office of Personnel Management

(OPM) impact you in myriad ways. Federal employees and retirees rely on NARFE to stay on top of all the factors that affect your livelihood. To help you do that, we’ve enhanced existing services, added new ones, and advocated for you before Congress and federal agencies. In the past year, NARFE: • Launched the FEDHub online community to help members make connections and get answers.

• Added a financial planning program that provides members with a free insight session and discounts on select financial planning services.

• Partnered with leading experts to develop fresh educational content, keeping you current on the latest changes to your federal benefits.

• Offered testimony on the future of federal work, worked tirelessly to protect federal health benefits and secure a federal pay increase, and pushed for the introduction of bills to enhance COLAs for Feds.

• Met with the new OPM director twice and separately with the new associate

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NARFE MAGAZINE APRIL 2022

director of retirement services to maintain lines of communication with the

FEDERAL EMPLOYEES AND RETIREES RELY ON NARFE TO STAY ON TOP OF ALL THE FACTORS THAT AFFECT YOUR LIVELIHOOD. agency that administers federal employee and retiree benefits: shared NARFE members’ concerns, discussed OPM’s plans to revitalize the federal workforce and serve federal employees and retirees, and highlighted qualms with legislative proposals threatening the

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integrity of federal health benefits.

• Answered nearly 900 calls from members about federal health benefits during Open Season.

• Contacted OPM hundreds of times on behalf of members with benefits problems and helped many get muchneeded overdue or increased retirement payments.

Speaking of those we’ve helped, here’s just one example from a member who had been waiting months for her retirement to be finalized. After we reached out to our contacts at OPM on her behalf, she responded: “I just got an email from my bank that a deposit from OPM has posted for my accrued annuity. Thank you so much for your assistance. I have no idea when it might have been resolved without your assistance.”

As a NARFE member, you have direct access to valuable resources, vital information and skilled representation.

We’ve been here supporting Feds and their families for more than 100 years, and we plan to be there for you for 100 more. Isn’t it great to have NARFE in your corner?

—BY DAVE BOWMAN, SENIOR DIRECTOR, MEMBERSHIP DEVELOPMENT

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PLEASE MAIL COUPON AND CHECK TO: NARFE / 606 N. Washington St. / Alexandria, VA 22314 or donate online at www.narfe.org/ silvercircle With NARFE’s thanks, you will receive: • A Silver Circle pin and recognition on narfe.org with a donation of $100 or more.

• A Silver Circle pin, your name plate placed on the Silver Circle plaque at NARFE Headquarters, recognition on narfe.org and recognition at the NARFE yearly conference with a donation of $1,000 or more.

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Support Alzheimer’s Research NARFE members contributed for Alzheimer’s research: $15 Million Fund $14,307,048.27* *Total as of January 31, 2022. 100 percent of all contributed funds go to Alzheimer’s research.

If you have any questions, write to: National Committee Chair Olivia Williams 22 Garden Springs Road Columbia, SC 29209 OR EMAIL: oeashf3@gmail.com MAKE CHECK PAYABLE TO: NARFE-Alzheimer’s Research (write your chapter number on memo line)

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PLEASE MAIL COUPON AND CHECK TO: Alzheimer’s Association 225 N. Michigan Ave., 17th Floor Chicago, IL 60601-7633

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NARFE-FEEA Fund MAKE CHECK PAYABLE TO: NARFE-FEEA Fund PLEASE MAIL COUPON AND CHECK TO: FEEA 1641 Prince St. Alexandria, VA 22314

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The NARFE-FEEA Fund supports NARFE members during disasters; provides scholarships to their children, grandchildren and great-grandchildren; and funds other programs to support NARFE members at the direction of NARFE and FEEA. Enclosed is my NARFE-FEEA Fund Contribution: $ ________ Name: ___________________________________________________________ Address: _________________________________________________________ City:_____________________________________________________________ State:______________________________ ZIP: _________________________ Email: ___________________________________________________________

To make credit card or e-check contributions, visit www.feea.org/givenarfe.

NARFE News

NARFE Election Update NARFE will hold elections in August for national president, national secretary/treasurer and 10 regional vice presidents.

Be on the lookout for May’s issue of NARFE Magazine containing candidate statements and the June/July issue with information on proposed bylaws. Stay up to date on the web at www.narfe.org/2022election.

2022 FEDERATION CONFERENCES AND ELECTIONS This information was correct as of press time in late February; please contact your federation to make sure these details are current.

FEDERATION CONFERENCES ALASKA: September 24, 2022, online: https://us02web.zoom.us/j/89098661119; contact Paul McIntosh, pjmac@gci.net FLORIDA: October 13-16, 2022, in Jacksonville IDAHO: May 13, 2022, in Boise ILLINOIS: September 20-22, 2022, in Effingham INDIANA: April 21, 2022, in Indianapolis KANSAS: April 25-26, 2022, in Lindsborg; federation election March 1 to April 8, 2022.

Contact John Ourada, john.ourada@cox.net MASSACHUSETTS: May 5, 2022, in Devens MICHIGAN: May 24-27, 2022, in Clare MISSISSIPPI: April 7-9, 2022, in Louisville MISSOURI: May 4-5, 2022, in Springfield MONTANA: June 7, 2022, online: https://us02web.zoom.us/j/5472873904; federation election April 1 to May 15, 2022. Contact Leland Walbruch, walbruchsofmt@centurylink.net NEW HAMPSHIRE: May 18-19, 2022, in Rochester (if in person) NEW YORK: May 23-27, 2022, in Albany NEBRASKA: May 25-26, 2022, online; contact Harold Kaege, hlklaege@gmail.com OREGON: May 15-17, 2022, in Newport PENNSYLVANIA: May 2-3, 2022, in York SOUTH DAKOTA: May 16-18, 2022, in Pierre TENNESSEE: April 18, 2022, online: http://www.narfetn.org/files/registration2022.pdf WEST VIRGINIA: May 18-19, 2022, in Martinsburg

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NARFE MEMBER BENEFITS • Access the NARFE Federal Benefits Institute for powerful resources to help you fully understand and manage your benefits.

Active and Retired Federal Employees ...

Join NARFE Today!

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 questions.

Who Should Join NARFE?

If your future security is tied to federal retirement benefits—federal retirees, current employees, spouses and individual survivors—you should join NARFE.

• Visit the Legislative Action Center to contact your representatives about bills affecting federal benefits.

• Get NARFE Magazine with news and insights for the federal community.

• Save time, hassle and money with NARFE Perks.

• The opportunity to get involved at the local level by joining a chapter in your area.

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NARFE MEMBERSHIP APPLICATION YES. I want to join NARFE for the low annual dues of $48.

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LOOKING TO MEET OTHERS in the federal community and participate in NARFE at a local level? Call 800-456-8410 to learn about a NARFE chapter in your area.

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2. Join online at www.NARFE.org.

3. Call 800-456-8410, Monday through Friday, 8 a.m. to 5 p.m. ET.

___________________________________________ Recruiter’s Name ___________________________________________ Recruiter’s Membership ID 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.

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USE YOUR NARFE PERKS AND YOUR MEMBERSHIP WILL MORE THAN PAY FOR ITSELF!

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NARFE members receive great rates with National Car Rental! At National, we pride ourselves on always providing you with unsurpassed convenience and choice. https://partners.rentalcar.com/narfe

Wyndham Hotels | 1-877-670-7088 | http://bit.ly/WYNDHAM_NARFE

NARFE members receive up to 20% off the “Best Available Rate” at participating Wyndham Hotel Group locations worldwide. To receive discount, book online or call our special member benefits hotline at 1-877-670-7088 and give the agent your special discount ID number 1000007874 at time of booking. For online bookings, your discount ID will automatically be entered and your discount displayed.

WELLNESS....................................................................................................................................................

Brookdale Senior Living Communities | 877-713-2762 | www.brookdale.com/narfe

As the largest operator of senior living communities in the US, Brookdale has over 1,000 locations all across the country. Members are eligible for 7.5% discount at Brookdale Independent Living, Assisted Living and Memory Care communities and 10% discounts on Brookdale Private Duty Home Care.

Discounts are for new move-ins/customers only.

R

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

Life Line Screening, America’s leading provider of community-based preventive health screenings, will conduct health screenings using state-of-the-art ultrasound technology in your neighborhood.

Operator code BKHN075.

ADDITIONAL PERKS................................................................................................................................

SEE HOW MUCH YOU CAN SAVE AT

www.NARFE.ORG/memberperks

The Way We Worked

Tracking ‘Aliens’ in America In this World War II-era photograph, two Immigration and Naturalization Service (INS) employees work with a Flexoline Index, made of thin celluloid strips containing coded information and organized into large metal panels.

INS created the index following the Alien Registration Act of 1940, also known as the Smith Act. The act required foreign nationals 14 years or older to register with the federal government, leading to a sharp increase in federal records.

INS registered more than 5.6 million people during World War II. Today, U.S. Citizenship and Immigration Services (USCIS) employees use digital records to efficiently process applications, support national security, and streamline the nation’s immigration and naturalization system.

PHOTO courtesy of the USCIS History Office and Library (Kate Hallgren, historian, and Zack Wilske, senior historian), in collaboration with the Society for History in the Federal Government (SHFG), bringing together government professionals, academics, consultants, students and citizens interested in understanding federal history work and the historical development of the federal government. To join, visit www.shfg.org.

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NARFE MAGAZINE APRIL 2022

DID YOU KNOW? Federal oversight of immigration began in 1891, when Congress created the first Office of Immigration in the Treasury Department. Visit www.uscis. gov/about-us/our-history

5 Great Reasons

Why Oticon MoreTM could be the answer to your hearing problems.

1 Oticon More with Brain HearingTM technology

A revolutionary hearing aid that gives the brain more of the relevant information it needs to make better sense of sound. So you can get better speech understanding with less effort and the ability to remember more.

2

3

Connectivity made easy

Never change a battery again

Simple, wireless connectivity to your favorite devices via Bluetooth®. Make hands-free calls, stream music, connect to smart devices and more!

A trouble-free rechargeable solution allows you to recharge at night for a full day of hearing. FREE charger included!1

4

5

The hearing aid with built-in intelligence

Take advantage of your $2500 benefit

Works more like how the brain works because it learned through experience. Clinical studies prove Oticon More delivers 30% more sound to the brain and increases speech understanding.2

Exclusive pricing for NARFE members. Your insurance may cover all or part of the cost. Call for more information.3

This special offer for federal employees and retirees is available only at Your Hearing Network locations. To find your location call

877-696-5335

Lithium-ion battery performance varies depending on hearing loss, lifestyle and streaming behavior. 2Compared to Oticon Opn STM, Santurette, et al. 2020. Oticon More clinical evidence. Oticon Whitepaper. 3Your out-of-pocket costs may vary depending on plan benefits, eligibility, deductible, co-insurance, and model of device chosen.

This is not a guarantee of coverage or payment. Benefit is not available through all insurance plans. Please call us to verify your coverage.

1

Members,

Pay $0

out-of-pocket!

Blue Cross and Blue Shield Service Benefit Plan members may be eligible for two fully covered hearing aids with zero out-of-pocket cost on many models when applying your hearing aid benefit*. HearUSA offers all these features and follows all safety protocols for our customers and employees. Call 1-855-252-0025 to discover more or visit www.blue365deals.com/hearusa.

EXPERIENCE - HearUSA has been changing lives through better hearing since 1987 and a proud NARFE Circle Sponsor since 2016.

CHOICE - All major hearing aid brands and styles available, including completely-in-the-canal, the smallest custom hearing aids on the market.

TECHNOLOGY - Smart technology helps you hear more clearly and eliminates annoying feedback “whistling”.

RECHARGABLE - Most models have rechargeable options; no need to ever replace batteries! Plus, many models connect with your cell phone!

TELEHEALTH - Take advantage of HearUSA Telehealth Services where you obtain quality care at home. Telehealth appointments are available.

Three-year manufacturer’s warranty covers repairs Three-year loss and damage coverage provides peace of mind One-year of FREE batteries eliminates an extra expense One year of FREE in-office service will get you off to a great start!

Call 1-855-252-0025 to schedule a FREE in-person or telehealth hearing appointment today! *The Service Benefit Plan will pay a hearing aid benefit for Standard and Basic Option up to $2,500 total every 5 calendar years for adults age 22 and over, and up to $2,500 total per calendar year for members up to age 22. FEP Blue Focus does not have a hearing aid benefit.

Do not rely on this communication piece alone for complete benefit information. All benefits are subject to the definitions, limitations, and exclusions in the Blue Cross and Blue Shield Service Benefit Plan brochure. Blue365® offers access to savings on health and wellness products and services that members may purchase from independent vendors, which are not covered benefits under the Blue Cross and Blue Shield Federal Employee Program, Blue Cross Blue Shield FEP Dental and/or Blue Cross Blue Shield FEP Vision. These products and services will be offered to you through the entire benefit year.

During the year, the independent vendors may offer additional discounts on these products and services. To find out what is covered under your policy, contact the customer service number on your member ID card. Any disputes regarding your health insurance products and services may be subject to your plan’s grievance process. BCBSA may receive payments from vendors providing products and services on or accessible through the Site. Neither BCBSA nor any Blue Company recommends, endorses, warrants, or guarantees any specific vendor, product or service available under or through the Blue365 Program or Site.