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NEWS:

NARFE Headquarters, June 24, 2016

Message from NARFE President Richard G. Thissen

“This week, NARFE applauded the announcement by the Department of Defense that it will begin offering the option of phased retirement to its employees. NARFE long has called on agencies to implement phased retirement, a policy that has been law for more than four years. Also this week, the Social Security Trustees Report alerted us that some federal employees may again face an unfair Medicare premium increase. Learn more about both below. ”

DOD Announces Phased Retirement Implementation

On June 21, the Department of Defense announced it will begin offering phased retirement to its civilian employees. Phased retirement allows an employee to ease into retirement while working part time. Employees mentor younger employees while still earning credit toward their retirement. It became law four years ago, but agencies have been slow to implement the program.

NARFE applauded the announcement from the government’s largest agency, but called it long overdue. NARFE also called on other agencies to embrace this innovative human resources tool.

NARFE’s press release on the announcement can be found here.

Social Security Trustees Report Released

The annual Social Security Trustees Report was released this week, finding little change overall in the finances of the Social Security Trust Fund. The Trustees predicted the Social Security Trust Fund will remain solvent until 2034. The report also predicted a 0.2 percent cost-of-living adjustment (COLA) for Social Security beneficiaries in 2017. The 2017 COLA will not be determined until October.

Federal annuitants receive the same COLA as Social Security beneficiaries. A small COLA, such as the 0.2 percent increase estimated by the Trustees, could result in a significant increase in Medicare Part B premiums for some retirees – an increase that could be larger than the increase in their annuity checks. This is because of the “hold harmless” provision of Social Security law that states the dollar increase in an individual’s Part B premium is limited to the dollar increase in an individual’s Social Security benefit. Unfortunately, many federal retirees who do not receive Social Security benefits, or who receive very small Social Security benefits, are not under the “hold harmless” provision and would shoulder the full cost of the Part B premium increase.

This repeats last year’s scenario when it was announced that there would be no COLA in 2016. NARFE was instrumental in obtaining a fix that kept the full 52 percent increase in Part B premiums from taking effect. Instead, premiums rose only approximately 15 percent.

This fix also would apply if there is a zero COLA for 2017. However, it would not apply if there is a small COLA for 2017. NARFE is beginning to reach out to members of Congress on this issue and will be looking for another legislative fix if, indeed, there is a very small COLA in 2017.

House in Recess, Legislative Hotline Pending for July 1

While the Senate is in session next week, the House is in recess until July 5. Consequently, the Hotline may not be published next week, July 1, unless there is legislative news to report.

Make Your Voice Heard in Congress

NARFE members are encouraged to use the Legislative Action Center to easily send letters to members of Congress on a variety of NARFE issues. Members also can track NARFE-related bills and votes and see how their legislators voted.

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NARFE Headquarters, June 17, 2016

Message from NARFE President Richard G. Thissen

 

“This week, members of the House Oversight and Government Reform Committee released a draft bill to reform the U.S. Postal Service. While the bill is a marked improvement over previous bills, including the bill pending in the Senate, NARFE remains opposed to the legislation as drafted because it would force postal retirees to enroll in Medicare when they have already chosen not to do so. Learn more below.”

 House Introduces Draft Postal Reform Bill; NARFE Opposes It

On June 15, House Oversight and Government Reform Committee Chairman Jason Chaffetz, R-UT; Ranking Member Elijah E. Cummings, D-MD; and Reps. Mark Meadows, R-NC; Gerry Connolly, D-VA; and Stephen F. Lynch, D-MA, unveiled a bipartisan discussion draft of postal reform legislation. The group is seeking public comments on its draft bill prior to formal introduction.

Although it is a notable improvement over previous postal reform efforts, NARFE opposes the draft bill because it would force eligible postal retirees, their spouses and survivors to enroll in Medicare – or forfeit the Federal Employees Health Benefits Program (FEHBP) coverage that they earned as a benefit of years of employment. For those not already enrolled, this would require an additional $121.80 per month (or more) in Medicare premiums.

The draft proposal is not all bad news, though. First, the bill waives any increased premiums for late enrollment in Medicare for those forced in. Second, enrollment in both Medicare and FEHBP often is a financially beneficial option, as it reduces out-of-pocket costs in the forms of deductibles and co-pays. Third, those postal retirees forced to enroll would pay less than full Medicare Part B premiums for the first three years of coverage, paying 25, 50 and 75 percent in years one, two and three, respectively, with the remainder paid by the U.S. Postal Service (USPS). Finally, NARFE also was able to ensure that those postal retirees and spouses forced to enroll in Medicare as a condition of continuing their FEHBP coverage would be enrolled automatically, to avoid complete loss of all health insurance coverage for individuals who would fail to enroll.

However, NARFE strongly objects to the removal of choice in the decision to enroll in Medicare and believes it changes the bargain for postal retirees during retirement. NARFE has proposed, as a compromise, allowing for postal retirees automatically enrolled in Medicare coverage to opt out during a special opt-out period.

The draft postal reform bill also includes a substantial amount of additional operational and governance reforms. On the positive side, the bill does not rescind six-day delivery. It provides some transition to cluster box delivery for business and residential areas that voluntarily consent to such a transition.

A summary and the full text of the draft bill are posted on the House Oversight and Government Reform Committee website. Public comments may be submitted here. NARFE members concerned about the mandatory Medicare enrollment provisions are strongly encouraged to share their objections with the committee.

House Committee Attempts to Restore Postal Service Standards

On June 9, the House Appropriations Committee included language in the fiscal year 2017 Financial Services and General Government funding bill to require the USPS to maintain six-day mail delivery. The provision has historical precedence, as language to do so has been approved in the appropriations process since 1983.

The committee also approved an amendment to restore service standards that were abandoned in 2012, including overnight mail delivery. The amendment was introduced by Rep. Marcy Kaptur, D-OH, and was approved unanimously. It would return service standards to the July 1, 2012, level. Since that time, the USPS has nearly eliminated overnight delivery of first class mail and periodicals, and delayed most other mail.

A similar measure narrowly passed the House committee last year but did not move in the Senate. It is unclear if the full House will address the bill before the start of the fiscal year on October 1.

Consumer Prices Increase in May

Relevant to the cost-of-living adjustment (COLA) to civil service annuities for 2017, the May 2016 Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) is 234.444, a one-month increase of 0.43 percent. The May figure is 0.09 percent higher than the average CPI-W for the third quarter of 2014, which, because there was no COLA in 2016, is the reference figure for determining the 2017 COLA. The 2017 COLA will not be determined until October, when the July, August and September CPI-W numbers are available.

Of interest to individuals receiving benefits under the Federal Employees’ Compensation Act (FECA), the May CPI-W figure is 1.59 percent higher than the December 2015 CPI-W figure.

Access NARFE’s full COLA update here.

Make Your Voice Heard in Congress

NARFE members are encouraged to use the Legislative Action Center to easily send letters to members of Congress on a variety of NARFE issues. Members also can track NARFE-related bills and votes and see how their legislators voted.

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NARFE Headquarters, June 10, 2016

Message from NARFE President Richard G. Thissen

“This week, President Obama vetoed a resolution to block implementation of the Department of Labor’s conflict of interest rule. NARFE supports the rule and is happy that implementation will continue as planned. On Capitol Hill, NARFE continued to push for WEP reform and discussed NARFE’s positions on postal reform ahead of potential introduction of a House bill. With Congress adjourning in mid-July for an extended summer recess because of the November elections, timing will be an important factor in what legislation still may be voted on this year.”

President Obama Vetoes Resolution Against DOL Conflict of Interest Rule

On June 8, President Obama vetoed H.J.Res. 88, a resolution of disapproval that would have blocked the Department of Labor’s final conflict of interest rule. The resolution passed the Senate in May and the House in April.

NARFE opposes the resolution and supports the rule, which will require financial professionals who provide retirement investment advice to put their clients’ best interests ahead of their own financial interests.

It is unlikely Congress will override the presidential veto, which requires a two-thirds vote in each chamber. Implementation is set to begin in April 2017. However, potential legal challenges could delay or affect implementation.

Register Now for the 2016 NARFE National Convention

More than 750 NARFE members already have registered for the 34th Biennial NARFE National Convention, August 28-September 1 in Reno, NV. At the convention, NARFE members will set the Association’s legislative agenda for the next Congress, elect new officers and make major decisions that will determine the future course of NARFE.

You can register and learn more on NARFE’s convention website. Register and pay by August 1 and receive the discounted $99 registration rate. Questions about registration should be submitted here or by calling 571-483-1284.

Template Letters to the Editor Available

NARFE currently has two letter-to-the-editor (LTE) templates available for members to send to their local newspapers.

The first is in support of H.R. 711, legislation to reform the Windfall Elimination Provision (WEP). NARFE members can send this LTE here.  Thank you to those who already have submitted LTEs; we’ve seen more than 15 published thus far.

H.R. 711 would reform, but not repeal, the WEP. It would reduce the WEP penalty by an estimated 50 percent for individuals who turn age 62 before 2017. For individuals who turn 62 in or after 2017, the bill would replace the current WEP formula with a fairer one, saving most individuals about $77 per month. A summary of H.R. 711 can be found here. Members also can send a letter to their members of Congress, asking them to support the bill or thanking them for their cosponsorship, here.

The second LTE is in support of H.R. 532 and S. 2033, legislation to provide paid parental leave to federal employees. NARFE members can send this LTE here.

The legislation would provide federal employees six weeks of paid leave for the birth or adoption of a child. NARFE supports federal paid parental leave as a way to help the government retain good employees and recruit top talent. Members also can send a letter to their members of Congress, asking them to support the bill or thanking them for their cosponsorship, here.

Make Your Voice Heard in Congress

NARFE members are encouraged to use the Legislative Action Center to easily send letters to members of Congress on a variety of NARFE issues. Members also can track NARFE-related bills and votes and see how their legislators voted.

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