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AFSA Retiree Newsletter - August 2017
In this issue you will find:
- Threats to Your Retirement Benefits
- Nobody Tells Our Story Better Than You
- Medicare at Age 65
- The Pros and Cons of Keeping your Funds in TSP in Retirement
- Modernizing the TSP
- Meet the Newest Addition to AFSA’s Staff!
- Have You Joined a Retiree Association?
- Join AFSA at an Upcoming Event!
- Are You a Foreign Service Author?
- Contacting AFSA
Threats to Your Retirement Benefits
The Trump Administration’s proposed FY2018 budget seeks to cut several federal retirement benefits. The one proposal impacting current retirees is to eliminate cost-of-living adjustments (COLAs) for retirees in the post-1983 FSPS retirement system and reduce the COLA for retirees in the pre-1984 FSDRS system by 0.5 percent. In addition, some in Congress seek to reduce the government contribution to Federal Employees Health Benefits (FEHB) insurance premiums. Another proposal is to decrease the rate of return of the Thrift Savings Plan’s G Fund.
Long-time lobbyists tell AFSA that it is impossible to predict if any of these proposals will pass. Each proposal carries with it a projected 10-year budget saving that could be incorporated in a late-September deal to raise the federal debt ceiling or could be part of a likely late-fall deal to pass the FY2018 federal budget. The exact magnitudes and effective dates of any changes are yet to be decided.
The proposed changes would impact 2.7 million federal employees and 2.6 million federal retirees. The Foreign Service comprises less than one percent of those totals. In addition, the Congressional committees with jurisdiction over federal benefits are different from the foreign affairs committees with which AFSA has developed strong relations. For those reasons, AFSA’s advocacy on retirement benefits is primarily through membership in the Federal-Postal Coalition made up of 30 organizations including the National Active and Retired Federal Employees Association (NARFE) and the large civil service unions.
The Federal-Postal Coalition has sent several letters to Congress, with AFSA as co-signer, opposing cuts to federal retiree benefits. The Coalition holds frequent teleconferences, with AFSA participation, to plan advocacy efforts. Foreign Service retirees who want to act to protect their earned retirement benefits should write, call, or meet with their members of Congress. Active duty employees may not use government resources or time and must speak in their personal capacity.
Nobody Tells Our Story Better Than You
AFSA continues to emphasize the importance of outreach and public engagement to tell the story of the Foreign Service. We’d like to highlight some individuals who have participated in outreach events in the last few weeks.
- North Carolina/Wyoming/Montana: Ambassador Jeanine Jackson and her husband, retired FSO Mark Jackson, have been traveling all over the country speaking to audiences about political-military relations under the heading “From C Rations to State Dinners.” Recent engagements have included the West Point and Men’s Clubs in Wilmington, N.C.; the Sheridan College Summer Campus in Spear-O-Wigwam, Wyo.; and the Public Library in Billings, Mont.
- California: Ambassador Vernon Penner spoke on “What the State Department Does for You” at Deep Springs College in Big Pine. Notably, the college is the smallest institution of higher education in the country! Amb. Penner also published an article with the same title in a recent issue of the Eastern Shore, Md., publication Outlook by the Bay.
- California: Ambassador (ret.) Shaun Donnelly spoke on NAFTA to the World Affairs Council of Inland Southern California in San Bernardino in June.
- Virginia: Retired FSO Dr. Elizabeth Shelton met with the members of the Northern Virginia chapter of the Military Officers Association of America (MOAA) and gave her well-received presentation on “Whither Turkey?”
These engagements, and all those like them, make a difference. If you are interested in participating in AFSA’s outreach efforts, please join the AFSA Speakers Bureau if you have not done so already.
Medicare at Age 65
Many retirees nearing age 65 find it difficult to decide whether to enroll in Medicare Part B, which covers outpatient care, preventive services, ambulance services, and durable medical equipment. Most retirees would find it to be an easy “yes” decision except for the fact that coverage is costly—$134 per month (or more) per person (thus a married couple pays at least $268 per month).
Weighing the pros and cons of enrolling in Medicare can get complicated. One of the most knowledgeable experts is Paula Jakub, CEO of the American Foreign Service Protective Association, which runs the FEHB Foreign Service Benefit Plan. Ms. Jakub is a frequent presenter at Foreign Service Institute retirement planning seminars. She made that same presentation at AFSA in May 2016. Her presentation can be viewed at www.afsa.org/video. For a written summary along with a link to the video, visit www.afsa.org/coordinating-medicare-your-fehb-plan.
The Pros and Cons of Keeping your Funds in TSP in Retirement
AFSA has posted online a summary of the October 2016 presentation at AFSA by Randy Urban, a TSP Training and Liaison Specialist with the Federal Retirement Thrift Investment Board. He spoke about the advantages and disadvantages of keeping funds in the TSP, even in retirement. Click here to read the summary. The biggest “pro” is that TSP probably has the lowest management fee of any employee-sponsored retirement system—less than a tenth of the average management fee for 401K plans. But there are disadvantages to keeping funds in TSP after retirement as well: lack of investment strategy support, limited investment choices, and very limited withdrawal options. Click here for a recent FedSmith article that contains more information.
Modernizing the TSP
Some proposed changes to the TSP include expanding the existing I Fund (international stocks) and categorizing Lifestyle Funds in 5-year, rather than 10-year, bands to better match retirement time frames. Pending legislation in the House and Senate provide for significantly increasing flexibility in managing one’s TSP account after retirement: multiple age-based and post-separation withdrawals, (rather than just one), combining partial withdrawals with or an annuity with periodic payments, and eliminating the withdrawal election deadline of April 1 of the year following the year the account holder reaches 70½. Click here for more information.
Meet the Newest Addition to AFSA’s Staff!
AFSA is pleased to welcome Foreign Service spouse Christine Miele to the team. Christine took up her duties as our first-ever retiree outreach coordinator earlier this month. In that role, Christine will engage heavily with existing Foreign Service retiree associations, help build new ones where none exist, and make it easier for our retirees to become engaged in local outreach and advocacy efforts when possible. This new position is part of AFSA’s ongoing effort to increase outreach and help our retiree members be more involved in their professional association.
Have You Joined a Retiree Association?
Did you know there are multiple Foreign Service retiree associations around the country? While unaffiliated with AFSA, these groups are an ideal way to stay in touch with your profession as well as old friends and colleagues. You can find a full listing of these groups at www.afsa.org/retiree-associations. If there is no group in your area and you’d like to start one, let us know at email@example.com.
Join AFSA at an Upcoming Event!
Our September calendar is quite full, and we hope you will join us for one or more of these events:
- On September 8, the second annual Foreign Service Night at Nationals Park takes place at 7:05 p.m. as the Nationals play the Phillies. Over 270 tickets have already been sold – get yours at www.afsa.org/nationals2017.
- September 14 at 12:00 p.m.: Retired FSO John K. Naland and former FSO Harry W. Kopp will discuss the brand-new third edition of Career Diplomacy: Life and Work in the Foreign Service. Click here to register.
- Our next networking happy hour will take place from 4:00-6:00 p.m. on September 20. All are welcome to these social events, where light snacks are offered and $5 tickets for beer and wine are available for purchase. Click here to register.
- October 11 at 12:00 p.m.: Retired Ambassador James Bullington joins us to talk about his new book, Global Adventures on Less-Traveled Roads: A Foreign Service Memoir. Click here to register for this event.
Are You a Foreign Service Author?
In November The Foreign Service Journal will celebrate the wealth of literary talent within the Foreign Service community with its annual “In Their Own Write” edition. Foreign Service-affiliated authors whose books have been published in 2016 or 2017 are invited to send us a copy of the book, along with a press release or backgrounder on it. Deadline for submissions is Sept. 1. For more information, please email firstname.lastname@example.org.
If you encounter problems with your federal retirement benefits or have related questions, AFSA’s Retiree Counselor Todd Thurwachter can be reached at email@example.com and (202) 944-5509. Retiree Outreach Coordinator Christine Miele is at firstname.lastname@example.org and (202) 944-5517. AFSA Retiree Vice President John Naland can be reached at email@example.com.