The Foreign Service Journal, May 2019

THE FOREIGN SERVICE JOURNAL | MAY 2019 59 RETIREE VP VOICE | BY JOHN NALAND AFSA NEWS Views and opinions expressed in this column are solely those of the AFSA Retiree VP. Contact: naland@afsa.org | (703) 437-7881 Threats to Retirement Benefits Given the composition of the 116th Congress, it is highly unlikely that any Trump administration proposal to cut federal retirement ben- efits would pass the House of Representatives and get the 60 votes necessary in the Senate to advance legislation. But our nation’s large and persistent federal budget deficits will likely increase pressure to cut expenditures, including spending on retire- ment benefits. What benefits are most at stake, and what can we do to protect them? Active-duty employees probably have the most to worry about. Each year, bills are introduced in the House to require federal employees to contribute more to their retirement system, to change the calculation for federal pensions to be based on the average of the highest five years of salary instead of the highest three years, and to eliminate the annuity supple- ment paid to federal employ- ees hired in the post-1983 “new” retirement systems who retire prior to age 62. Current retirees have less to fear because of traditional congressional reluctance to reduce benefits for those actively receiving them. But possible targets include cutting cost-of-living adjust- ments for retirees, reducing the government’s share of federal retiree health care premiums and decreasing the rate of return of the Thrift Savings Plan’s G Fund. A future Congress could raise tax rates on retirement income including pensions and Social Security. Not all threats to our financial security in retire- ment emanate from Pennsyl- vania Avenue. After a 10-year bull market onWall Street, those of us with retirement savings in the Thrift Savings Plan or other retirement accounts might be wise to review the risk-versus-reward balance in our stock and bond allocations to make sure that it is still appropriate. We all also need to be knowledgeable about our benefits to avoid inadvertently undermining our own retire- ment financial security. For example, retirees nearing age 62 face the decision of when to apply for Social Security benefits. Retirees nearing age 65 need to decide whether to enroll in Medicare Part B. There is also the decision of whether to apply for long- term care insurance. Helpful information on these topics is posted in the Retirement Services section of the AFS A website. Because benefit cuts would affect all federal employees and retirees, AFSA’s advocacy is primarily through the Federal-Postal Coalition made up of 30 organizations, includ- ing the National Active and Retired Federal Employees Association and the large civil service unions. The Fed- Postal Coalition represents 2.7 million federal employ- ees and 2.6 million federal retirees, with members living in every congressional district. The coalition sends letters to Congress, with AFSA as co-signer, and holds monthly meetings with AFSA participa- tion to plan advocacy efforts. Coalition members frequently meet with lawmakers to argue against benefits cuts. What can you do to protect your benefits? Maintain your AFSAmembership in retire- ment—your dues help support the association’s congressio- nal advocacy efforts. Donate to AFSA’s political action com- mittee ( www.afsa.org/afsa- pac). Monitor major develop- ments, which are reported in AFSA’s emailed Media Digest, the digital Retiree Newsletter and this column. And write to your representative and sena- tors urging them to oppose cutting the benefits you earned over a long, challeng- ing career. n On Feb. 26, AFSA hosted its third quarterly “View from Washington” webinar for retired members. More than 60 participants registered for the webinar—our largest audience to date. AFSA President Ambassa- dor Barbara Stephenson pro- vided a detailed update on the advocacy work AFSA is doing at the national level, includ- ing important work AFSA is The View fromWashington: AWebinar doing with our congressional champions who again, by wide bipartisan margins, rejected cuts to international affairs funding for Fiscal Year 2019. Noting the $84 million increase to the “overseas pro- grams” line item, she flagged that Congress has stopped the decade-long decline in funding for core diplomatic capability. Amb. Stephenson also outlined the field-tested messages AFSA and our speak- ers are using to demonstrate the importance of having a full Foreign Service team on the field to respond to the great power competition the United States is facing from China and others. Finally, she answered questions from participants and thanked retirees for their con- tinued commit- ment to building awareness in their communi- ties of what diplomats do and why it matters to the safety and prosperity of America. n AFSA/DONNAGORMAN