AFSA Retiree Update -- February 26

Greetings from AFSA President John Naland. Here is an update on AFSA’s work on issues of concern to our retired members. Many of these topics will also be of interest to those active duty members who plan to retire in the next few years. Feel free to forward this message to friends who might not otherwise see it.

ADVOCACY

Much of AFSA’s advocacy for our retired members goes on behind the scenes via individual casework by AFSA’s Retiree Affairs Coordinator Bonnie Brown. Not only does the value of AFSA membership not decline upon retirement, but it is hard to imagine who would need AFSA more than a retiree living far from Washington faced with sorting out some bureaucratic glitch with a non-responsive government office. Bonnie’s 2007 casework count shows that she assisted 452 individuals. For example, she helped 103 people with health care questions or problems, 46 people with annuity questions or problems, and 46 others who needed help getting a satisfactory response from some State Department office. AFSA members and surviving spouses may contact Bonnie (who works Monday through Wednesday) at brown@afsa.org.

WRITTEN GUIDANCE

Bonnie Brown also writes AFSA’s Retiree Newsletter, which goes out six times a year to retired AFSA members offering guidance in plain English on a variety of subjects. She pens an occasional column in AFSA’s Foreign Service Journal and posts other useful information on the retiree page of AFSA’s website < http://www.afsa.org/retiree/ >. Most popular columns include: 1) “Medicare Basics” < http://www.afsa.org/retiree/medicareBasics.cfm >, 2) “What Your Spouse Needs to Know” < http://www.afsa.org/retiree/whatyourspousesneedtoknow.cfm >, and 3) “Survivor Annuities: The Mechanics” < http://www.afsa.org/retiree/survivorAnnuities.cfm >.

Speaking of the Journal, the January 2006 cover story on Foreign Service retirement contained a wealth of advice, much of it written by fellow retirees < http://www.afsa.org/fsj/2006.cfm#Jan >. That issue generated so much positive feedback that more contributions from retirees were published in the following issue < http://www.afsa.org/fsj/feb06/LifeAfterFS.pdf >. Finally, the Journal’s annual tax guide contains a two-page section on state-by-state pension and annuity tax laws < http://www.afsa.org/fsj/feb08/tax_guide.pdf >.

AFSA also publishes an annual directory of our nearly 4,000 retired members. This state-by-state listing of contact information for retired members also provides contact information on the nearly 20 regional Foreign Service retiree associations around the nation. Note: A computer glitch this year resulted in the omission of several hundred names. AFSA is printing a supplement containing the missing data that will be mailed to all retired members. We apologize for any inconvenience.

Each year, AFSA purchases access for our retired members to the highly-rated Consumer Checkbook Guide to the Federal Benefits Open Season, which contains information about health, dental, and vision plans. The online version contains information about premiums and benefits, as well as information on comparative plan quality and service to help retirees choose the best plans for their needs and pocketbooks. For more information, see the retiree page of AFSA’s website < http://www.afsa.org/retiree/ >.

Finally, AFSA has nearly 10,000 subscribers to its AFSANET list serve which sends out an average of two e-mail messages per week on issues of interest to Foreign Service members. Anyone may subscribe at < http://www.afsa.org/forms/maillist.cfm >.

HR/RET COORDINATION

AFSA President Naland, AFSA Retiree Vice President Ambassador (Ret.) Bill Farrand, Bonnie Brown, and AFSA Labor Management Specialist James Yorke met on Feb. 25 with the Director of the State Department’s Retirement Office, Patricia Nelson-Douvelis. She briefed us on efforts to improve customer service for retirees by, for example, automating key processes and greatly expanding the amount of online benefits information. Look for the rollout of new customer-friendly upgrades over the next twelve months.

AFSA discussed a range of other retiree issues with Director Nelson-Douvelis and offered our assistance in helping to spread the word about developments of interest to our retired members. AFSA also urged HR to consult us before seeking legislation that affects retiree benefits. Although none appears on the horizon now, AFSA wants to avoid a repeat of 2006, when we learned of an initiative (later dropped) to tap the Foreign Service retirement trust fund to help pay for HR/RET operating costs only after the proposal had been forwarded to the White House.

LEGISLATION

AFSA’s legislative agenda includes several bills that would expand Foreign Service retiree benefits. Unfortunately, because they have significant price tags in terms of lost revenue or increased agency costs, securing their passage will be difficult in the current environment of large federal budget deficits:

-- WEP and GPO: Retirees under FSRDS which is not covered by Social Security can be adversely affected by the Windfall Elimination Provision and the Government Pension Offset provisions of federal law. Eight bills are pending in Congress that would repeal or reform those Social Security offsets (see < http://www.afsa.org/retiree/wepgpo.cfm >). AFSA recently participated in a meeting of the Coalition to Assure Retirement Equity, which consists of 40 groups, including the 350,000-member National Active and Retired Federal Employees (NARFE), major Civil Service unions, and AFSA. Unfortunately, the consensus among the lobbyists for those groups was that the prospects are poor for repeal or reform of the WEP and GPO provisions due to the impact on federal revenues and the Social Security trust fund. AFSA will continue to push for the repeal of these provisions, but the near-term prospects for success do not look good.

-- Premium Conversion: The tax code allows active-duty federal employees to pay health insurance premiums with pre-tax earnings. This reduces federal and social security taxes and, in some cases, state and local taxes. As a result, the average federal employee who pays health premiums with pre-tax dollars saves around $800 a year. The tax code, however, does not extend this “premium conversion” benefit to annuitants (except for public safety personnel such as Diplomatic Security special agents). AFSA, NARFE, and other groups are supporting bills pending in both the House and Senate that would extend premium conversion to all federal and military retirees. However, because of its impact on tax revenue, similar legislation in past years has died in the House Ways and Means Committee, which must originate any amendment to the tax code. Given the current budget environment, the prospects for success this year are not good.

--WAE Caps: A Foreign Service annuitant who is re-employed by the federal government in a part-time, temporary, or intermittent (When Actually Employed) position faces limitations on earnings and hours. The sum of an annuitant’s salary and annuity during a calendar year cannot exceed the annuitant’s salary at the time of retirement (without adjustment for inflation) or the full-time salary of the position in which he or she was re-employed, whichever is higher. And a retiree can work no more than 1,040 hours as a WAE in his appointment year. Thus, an annuitant can work only for three to six months and still receive a full annuity along with full compensation for work performed. Contractors are not affected by this cap. Recent legislation lifted the salary, but not hours, cap temporarily for service in Iraq and Afghanistan and for passport and visa processing. Given critical staffing shortages in the Foreign Service, AFSA has long argued that the administration should seek legislation to allow our retirees to return to work under the same rules applied to retired military members who are not subject to a salary cap in most cases. Unfortunately, no such initiative is likely under the current administration.

AFSA gets more complaints from retirees on WAE issues than on almost any other topic. Some concern legislative limitations on post-retirement government employment (see above), but others lament that the foreign affairs agencies do not do more within existing laws to take advantage of the expertise and experience offered by retired Foreign Service members. AFSA continues to urge agencies to do more to utilize retirees as a strategic reserve, but factors such as the decentralization of WAE hiring continues to frustrate our efforts.

-- Sick Leave Credit: Unlike FSRDS retirees, retirees under the “new” FSPS lose their unused sick leave upon retirement. Rep. Jim Moran, D-Va., has indicated that he plans to introduce legislation that would compensate all federal retirees in new retirement systems, including FSPS participants, for their unused sick leave. AFSA supports this change, which would reward employee’s dedication to public service. For the Foreign Service, the reform would help to counterbalance such financial disincentives as lost family income due to a spouse’s inability to find paid employment while stationed abroad. Prospects for passage are not yet clear.

-- Taxes: AFSA is happy to announce a new D.C. tax exclusion for survivor annuities. If you are a federal annuitant’s survivor and were 62 years of age or older as of Dec. 31, 2007, your survivor annuity will be eligible for a full tax exclusion for D.C. tax purposes. The exclusion does not include Social Security benefits, however.

-- Long-Term Vigilance: Congressional resistance to expand current retiree benefits may only intensify as the baby boomer retirement wave puts additional pressure on the federal budget. Thus, one of AFSA’s most important roles, both for active-duty and retired members, is to keep our eyes and ears open for potential moves to trim back the Foreign Service’s well-earned retirement benefits. Clearly, any cutback aimed at all federal employees would also be resisted by the large Civil Service unions and by groups such as NARFE. But if benefit cuts were aimed just at the Foreign Service, it would be up to AFSA to lead the opposition. The dues paid by our retired members support AFSA’s long-term ability to defend against such cuts.

FOREIGN AFFAIRS DAY

This year Foreign Affairs Day, the annual homecoming for State Department retirees, will take place on Friday, May 2, 2008. Deputy Secretary John D. Negroponte is scheduled to deliver the keynote address in the Dean Acheson Auditorium. Morning discussions will be followed by an elegant $40 luncheon for 250 attendees (first-come, first-served, so please sign up early) in the Ben Franklin Room. Invitations will be mailed out in late February. If you would like to receive an invitation, please e-mail the following information to foreignaffairsday@state.gov: Last name, First name, Retirement date, Service type (CS or FS), Street address, e-mail address.

AFSA members who are State Department retirees are cordially invited to AFSA’s Foreign Affairs Day Reception on Friday, May 2 from 3:00 to 5:00 p.m. at the F Street Bistro in the State Plaza Hotel, 2117 E Street NW, across from Main State.

VISITING RETIREE GROUPS

AFSA’s current leadership is continuing the tradition of meeting with Foreign Service retiree groups around the country. AFSA President Naland has already met with groups in Northern Virginia, Sarasota, Fla., Austin, Texas and Houston, Texas. He hopes to visit with retirees in San Francisco, Los Angeles, and North Carolina later this year. Outreach to other large retiree groups by Naland or AFSA Retiree Vice President Farrand is likely before their terms of office end in July 2009.

LONG-TERM HEALTH CARE INSURANCE

AFSA's Long-Term Health Care insurance program offers group rates to nine insurance carriers; featuring personalized service, broad coverages, with more competitive premiums than the Federal program. For more information members may contact Carl Shaifer at 800-242-8221, e-mail cshaifer@hirshorn.com, or go to < http://www.afsa.org/mbr/insur.cfm#longterm >.

HOW YOU CAN HELP

AFSA invites our retired members to help us build a domestic constituency to adequately fund diplomatic engagement. Retired members can write to their local newspapers, contact their federal lawmakers, and speak to civic groups to help explain the value of diplomacy and development assistance. For suggestions on how to write an op-ed, see Ambassador (Ret.) Dennis Jett's "Tips for Getting Op-Eds Published" from the October 2005 Foreign Service Journal < http://www.afsa.org/fsj/oct05/jett.pdf >. AFSA’s website < http://www.afsa.org > contains information on current budget needs, but the main point is for retirees to draw from their own personal experience to put a face on diplomacy for outsiders who do not know the Foreign Service from the Forest Service.

Finally, if you know Foreign Service retirees whose AFSA membership has lapsed, please urge them to join you in supporting AFSA. They are benefitting from AFSA'S advocacy of issues affecting them but are not contributing to the operating budget that funds that advocacy. To join, simply go to < http://www.afsa.org/mbr/retired.cfm >, e-mail member@afsa.org, or phone 1-800-704-AFSA (within the U.S.).

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