NARFE 90th Anniversary Book

Celebrating 90 Years of Service 1921-2011

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NARFE – Working for You Since 1921 e National Active and Retired Federal Employees Association — or NARFE — is the only organization dedicated solely to safeguarding and improving the benefits of federal employees, retirees and their families.

Although not formed until 1921, NARFE’s origins can be traced to the beginnings of the civil service system. In January 1883, President Chester A. Arthur signed the Pendleton Act — a bill that reformed the civil service system and established the Civil Service Commission. Before this law was enacted, each presidential election could bring about the wholesale removal of government employees to provide jobs for supporters of the incoming administration. After William Henry Harrison took office in 1841, thousands of would-be government employees arrived in our nation’s capital, seeking positions and setting themselves up in Cabinet members’ offices and in the halls of the White House. Many placed ads in Washington newspapers, offering to pay for a government job.

Between 1845 and 1865, the “spoils system,” where government jobs were sometimes openly bought and sold, was at its height and became a national scandal. e need for reform grew as the country’s population grew, and the government became more complex. A more stable work force was needed.

For decades, attempts were made to change the way federal workers were hired, and civil service reform bills were introduced but with no success. President Ulysses S. Grant called on Congress to pass a law reforming the system, and an amendment to an appropriations bill gave Grant the authority to appoint an advisory board, later called the Civil Service Commission. But the Commission dissolved in 1873 when Congress failed to provide additional funds for it.

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The public became increasingly disenchanted, and there was more pressure to put an end to the spoils system. Then, in July 1881, President James A. Garfield was shot and killed by a disgruntled office-seeker. His assassination was a catalyst for reform. The 1883 Pendleton Act was the first federal attempt to secure the appointment of qualified employees in public service through competitive examinations. The law also provided protection for career civil service employees from arbitrary dismissal. The Act marked the beginning of the end of the spoils system, and the merit system in federal employment became official.

The First Civil Service Retirement Plan At the time the Pendleton Act was signed, there were fewer than 2,000 federal employees, and there was no provision for their retirement. As early as 1899, the Civil Service Commission had recommended the adoption of a retirement plan. After decades of effort, on March 22, 1920, the first civil service retirement law for federal workers was signed by President Woodrow Wilson.

On that day, celebrations were held in the Washington area at the Navy Yard, the War Department, the Government Printing Office and other federal agencies where a significant number of employees chose to take advantage of the new law.

Influencing the final passage of the Civil Service Retirement Act was the Civil Service Retirement Association — an organization of government employees founded in 1900. Some 11 months after the retirement law went into effect, 14 federal retirees met in downtown Washington on February 19, 1921, to form a group dedicated to improving the status of retired federal employees. NARFE was born. en, it was called the Association of Retired Federal Employees. At the time of that first meeting of NARFE’s creators, civil service annuities were capped at $60 per month. And for the 16,500 federal annuitants, the maximum annual annuity was $720. Retire4

1920s and 1930s. NARFE tirelessly worked to secure these improvements on behalf of all federal retirees. Responses to a nationwide mailing to prospective NARFE members averaged 50 per day by November 1921. In 1922, NARFE held a mass meeting in the Department of the Interior Auditorium. e main focus: increasing annuities. Among the speakers were Secretary of the Interior Albert B. Fall and Commissioner of Pensions Washington Gardner. at same year, annuities were authorized for the first time for federal employees who were involuntarily separated if they had reached a certain age and had 15 years of service. Both active and retired federal employees began joining the Association and, by October 1923, NARFE membership had risen to 6,500. Also in 1923, the Classification Act was passed, providing a personnel and pay structure for federal employees based on their positions.

NARFE’s First Major Victory While changes were made to the retirement law, it wasn’t until 1926 that a bill was introduced calling for raising annuity rates to $1,000. But the legislation did not apply to those already retired. NARFE pressed the House Committee on the Civil Service, and an amendment to the law to extend coverage to retirees was introduced. President Calvin Coolidge signed the bill on July 1, 1926. It was the first legislation endorsed by NARFE that became law.

It became clear that there was a continuing need for more legislation to protect federal retirees, and concerns arose about annuities for widows. NARFE lobbied hard for a variety of new legislation. e Retirement Act was completely revised in 1930, with major improvements. Once again, NARFE successfully fought to ensure that the legislation included retirees as well as active federal employees.

After more than 12 years of negotiations with legislators for a number of bills for widows’ annuities, surviving spouse annuities were granted by law in 1939.

NARFE had made the protection of federal workers’ widows a top priority.

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ployees Health Benefits Act. Effective the following year, the new law covered some one million retiree annuitants and their dependents. is achievement was a giant first step in the Association becoming a leader in a series of battles to provide and protect adequate, affordable health care for federal employees, retirees and dependents enrolled in the Federal Employees Health Benefits Program.

A New Era of Federal Service By 1960, NARFE membership had soared to more than 100,000, with 750 chapters and 26 federations. at year, the morale of federal employees got a tremendous boost from the election of John F. Kennedy as president. In his 1961 State of the Union address to Congress, the newly elected president said: “Let every man and woman who works in any area of our national government, in any branch, at any level, be able to say with pride and with honor in future years — I served the United States government in that hour of our nation’s need.” Kennedy’s call to federal service and the establishment of new programs — such as the space program, which would take American astronauts to the moon, and the Peace Corps — brought expansion of and attention to the federal work force.

In the first year of the new administration, a system for automatically adjusting benefits for retirees on fixed incomes to allow for inflation was initiated for civil service annuitants, along with a 5-percent boost in annuities, and allowing unreduced, immediate annuities for those with 55-30 or 60-20 age and service criteria. e original formula, known as a cost-of-living adjustment (COLA), did not trigger any increases. But future NARFE-backed revisions in the formula did provide the foundation not only for civil service COLAs but also for similar adjustments in many federal programs, including the Social Security COLA, which was not enacted until more than a decade later.

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In 1989, NARFE spearheaded the formation of a coalition of some 45 public- and private-sector organizations to repeal the impact of the new catastrophic tax. This major grass-roots lobbying campaign was so persuasive that, within a year of enactment and before the surtax became payable, the act was repealed. Had it not been for NARFE’s efforts, the law’s new supplemental Medicare premium could have forced federal retirees to pay up to seven times as much as Social Security beneficiaries for health benefits they already had through their federal health plans. NARFE’s leadership role in this historic grass-roots campaign was publicly lauded.

NARFE also has been at the forefront of addressing discriminatory tax policies at both the state and federal levels, and has been successful in getting some states to eliminate or lessen taxation of federal annuities. In one challenge, a NARFE member from Michigan, a state that taxed federal retirees’ pensions but not the pensions of the state’s own retirees, took his case to the Supreme Court with NARFE’s backing. In a 1989 landmark decision, the Court ruled that a state cannot discriminate in taxing federal and state or local retirement dollars. e decision set off a round of legal and legislative challenges in states across the country. In 23 states, NARFE-led efforts eventually resulted in thousands of retired federal employees receiving tax refunds and thousands more benefiting each year.

NARFE also had long sought putting an end to the practice of source taxing, where some states continued to tax the retirement income of former residents even after they moved to other states. NARFE’s relentless efforts brought about enactment of legislation that prohibited states from source taxing retirement income paid after 1995.

Members Helping Members In 1986, the Federal Employee Education & Assistance Fund (FEEA) was es19

tablished to provide emergency grants and loans to federal employees.

NARFE’s involvement with FEEA began following the April 19, 1995, bombing of the Alfred P. Murrah Federal Building in Oklahoma City.

NARFE federations, chapters and individual members donated $100,000 to FEEA’s Oklahoma City Fund. NARFE’s Oklahoma City donation helped fund full college scholarships for all 200 children who lost a federal employee parent in the bombing of the Murrah Building.

A year later, NARFE entered into a partnership with FEEA to provide emergency disaster assistance to NARFE members who are victims of a declared natural disaster through the NARFE-FEEA Disaster Fund. e fund is supported by donations from NARFE members and friends of NARFE, and is administered by FEEA. NARFE members have donated more than $350,000 to the disaster fund, providing assistance to hundreds of members. NARFE became a member of FEEA’s board of directors in 1997. e following year, NARFE created an annual scholarship fund open to the children, grandchildren, great grandchildren and stepchildren of NARFE members. e NARFE-FEEA Scholarship Awards Program is supported by NARFE members and administered by FEEA. More than $650,000 in scholarship funds has been awarded.

NARFE Again Takes the Lead Changing demographics raised concerns about providing health care for an increasingly aging population. NARFE once again took the lead and helped to develop and enact a federal long-term care insurance program for both federal workers and retirees. e passage of the Long-Term Care Security Act in 2000 responded to the “graying” of America, and the increasingly urgent issue of helping federal employees and retirees with costly long-term care services. is was the first, new governmentwide federal benefits program to be 20

Photography and Memorabilia Photo pages in the front and back of the book, and photos on various pages throughout the book, showcase the contributions of government employees throughout the years.

Page 2 A flagmaker works on the 48-star U.S. flag, official for 47 years.

Page 5 A letter carrier removes mail from a sidewalk collection box. e carrier was driving a U.S. mail truck called a Columbia Mark 3 Touring Car, 1906.

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A rigger works on a Tennessee Valley Authority dam project, 1942.

Page 8 NARFE members visit legislators on Capitol Hill, c.1944.

Page 9 NARFE Articles of Incorporation and Bylaws, 1948; delegate ribbon, first NARFE National Convention, 1950.

Page 13 Astronaut David R. Scott, commander, gives a military salute while standing beside the deployed U.S. flag during the Apollo 15 moonwalk at the HadleyApennine landing site, 1971.

Page 14 NARFE President Tom Walters meets with President Lyndon B. Johnson and presents him with a NARFE membership card.

Page 18 NARFE President H. T. Steve Morrissey testifies at a March 1989 House hearing urging equity in cost-of-living adjustments.

Page 22 NARFE President Margaret L. Baptiste speaks at a November 2007 news conference called by Sen. John F. Kerry on the impact of the Government Pension Offset and Windfall Elimination Provision. Sen. Susan M. Collins also attended the news conference.

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Today’s NARFE While its name has changed over the years, NARFE’s mission remains the same — to preserve and improve the benefits of federal employees, retirees and their survivors. NARFE provides a wide range of services to its members in both federal employee retirement systems — the older Civil Service Retirement System (CSRS) and the newer Federal Employees Retirement System (FERS).

Based in Alexandria, VA, NARFE today is governed by an elected leadership of four national officers and 10 regional vice presidents. e Association has some 300,000 members; 54 federations located in the United States, Panama, Puerto Rico and the Philippines; and more than 1,400 chapters in the United States and overseas. Federations bring chapters together and promote the Association’s objectives within the state or area. ey also provide support and advice to chapters. Chapters serve as the link between NARFE headquarters and its members. A staff of some 60 employees in the Alexandria office serve the membership and the national officers.

On the Legislative Front An effective and highly regarded legislative voice for federal workers, retirees and their survivors, NARFE’s Legislative Department continues to work on many fronts on behalf of federal employees and retirees — retirement income, health care, cost-of-living adjustment (COLA) protection, fairness and equity issues, and many other areas. Since 1993, NARFE has been successful in preventing any legislated reductions to federal civilian retirement or health benefits.

NARFE continues to monitor and help to shape congressional proposals af25

fecting retirement and health security, and keeps members aware of proposals affecting their income and benefits. e Legislative Department is backed by a network of grass-roots activists in every state and congressional district, and coordinates grass-roots lobbying campaigns for or against legislation important to the federal community. e Legislative Department continues to hold biennial legislative training conferences. And through NARFE-PAC, the candidates who defend the earned benefits of federal workers and retirees are supported.

Recent Successes e Fiscal Year 2010 Defense Authorization bill, signed into law in October 2009, included several civil service improvements long sought by NARFE. e law allows federal agencies to re-employ federal retirees on a limited, parttime basis without offset of their annuities. Active federal workers under FERS are now permitted initially to credit half, and in 2014 all, of their unused sick leave toward retirement. e law also provides for retirement equity for federal employees in Hawaii, Alaska and the U.S. Territories; ends the Department of Defense’s pay-for-performance personnel system, the National Security Personnel System, restoring employees to the federal General Schedule pay system; allows FERS employees who previously left federal service to be able to repay a deposit to the Civil Service Retirement Trust Fund, with interest, in order to be able to combine their past and new federal service for future annuity service; and permits certain CSRS workers to phase down to part-time status at the end of their careers without reducing their final annuities.

NARFE’s advocacy also resulted in improvements to the rift Savings Plan (TSP), including providing automatic TSP enrollment of, and immediate matching contributions for, newly hired federal employees; adding a “Roth” option, allowing participants to make after-tax contributions to the plan and withdraw their earnings tax-free upon retirement; and ensuring that surviving spouses have 26

Elimination Provision (WEP). NARFE participated in the event, highlighting NARFE’s strenuous efforts and those of the Coalition to Assure Retirement Equity to get legislation passed to repeal or reform these Social Security offsets.

NARFE’s Current Legislative Focus NARFE has fought to improve and defend federal retirement benefits since 1921 and will continue to take whatever measures are necessary to continue that legacy. Preserving the earned economic and health care security of current and future federal retirees and their survivors, and guarding against any adverse proposals, are of paramount importance, especially in times of budget deficits and belt-tightening when these benefits are often targeted.

Just as it has throughout its history, NARFE will continue to work to ensure that all federal annuitants have equity with Social Security recipients in years when no COLA is expected. Giving annuitants the option of leaving a larger annuity for a surviving spouse also is included in NARFE’s legislative agenda.

NARFE supports civilian/military “pay parity,”which provides the same level of pay increase for both civilian federal workers and members of the military. e Association has long worked with federal-friendly members of Congress and other federal groups on this issue and will continue to do so. Any proposals to freeze the salaries of federal employees as a means to reduce federal spending are staunchly opposed.

NARFE’s commitment to the enactment of legislation that would repeal or reform the unfair and arbitrary GPO and WEP has not abated. Key members of Congress have been unwilling to take up the GPO and WEP unless legislation addressing the offsets is part of an overhaul of Social Security. During 2009, House and Senate leaders held preliminary talks on Social Security reform. But congressional leadership indicated that action on the issue would 28

Schedule by FEHBP plans to purchase prescription drugs on behalf of FEHBP enrollees.

Medicare Part B premium equity is another issue of concern to NARFE. Social Security recipients who pay Medicare Part B premiums through automatic withdrawal are “held harmless” from premium increases in years without a Social Security COLA. But there is no such protection for federal, state and local government retirees who are not eligible to receive Social Security benefits.

With the possibility of other non-COLA years in the forecast, NARFE remains committed to pressing lawmakers on Medicare premium equity.

NARFE also supports proposed legislation that would allow federal employees to invest the cash value of their unused annual leave in their TSP accounts. is change would give federal employees a benefit similar to that now provided to private-sector employees.

Another NARFE-supported proposal would require federal agencies to allow authorized teleworkers to telework for at least 20 percent of the hours in every two administrative workweeks. Telework also would be required to be incorporated into each department or agency’s “continuity of operations plan.” Such plans allow the federal government to continue operating in an emergency, either natural or manmade.

Member Benefits In addition to its work on Capitol Hill, NARFE supports members by providing advice and assistance to federal workers, retirees and survivors through a team of experts in the Retirement Benefits Service Department, who work closely with OPM and the Social Security Administration.

Chapter service officers and a network of NARFE volunteers in community30

Federal employees contribute to and work for their retirement benefits, and their contributions to society are immeasurable. î “eir work touches everyone – from delivering mail, forecasting weather, printing and minting money, processing Social Security benefits, caring for our veterans, and conducting research on diseases and finding cures. While public misconceptions still remain about federal workers being overpaid and receiving generous retirement packages, NARFE is committed to setting the record straight. Since that first founding meeting in 1921, NARFE has and will continue to lead eorts to ensure that federal workers receive not only the benefits they earned but also the recognition they deserve for their commitment and dedication to public service.

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NARFE’s COALITION PARTNERS Coalition-building is an important advocacy tool used by organizations to advance their mutual goals. NARFE founded two national coalitions and also has joined alliances with member organizations that share strategy and strengths on issues of concern. NARFE also is an active member of the Leadership Council of Aging Organizations, which works closely with Congress on the reauthorization of the Older Americans Act, ensuring the continuation of community services for senior citizens.

The Fund for Assuring an Independent Retirement (FAIR) Originally convened by NARFE and e Retired Officers Association (now the Military Officers Association of America) to join forces against congressional attacks on federal and military retirement benefits, today’s member groups represent more than six million public-service employees and retirees. e 33 national federal and postal organizations work to protect the economic and health security of their members.

The Coalition to Assure Retirement Equity (CARE) Founded by NARFE in 1991, CARE is comprised of more than 40 national, state and local organizations solely for the purpose of addressing the Social Security offsets – the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP). Like federal annuitants, many state and local government retirees also are affected by the GPO and WEP.

The Leadership Council of Aging Organizations (LCAO) NARFE is an active member of the LCAO, a coalition of 60 national nonprofit organizations concerned with the well-being of America’s older popula-

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