August 2008 Newsletter - American Foreign Service Association

AFSA NEWSLETTER
FOR RETIREES AND MEMBERS IN TRANSITION
American Foreign Service Association, 2101 E Street NW, Washington DC 20037
Web: www.afsa.org E-mail: afsa@afsa.org Phone: (800) 704-2372
August 2008
Volume 22, Number 4
New Department Retiree ID Badges
The department has announced new procedures
for issuing retiree identification badges to department
retirees and retirees from other foreign
affairs agencies. As was the case with the old
IDs, the new badges will give retirees access to
Main State and to medical and retirement offices
at SA-1 in Columbia Plaza.
Retirees who have the old retiree ID cards may
continue to use these cards indefinitely.
Those who wish to change to new badges — as
well as new retirees — must apply in person for
the badges at the Office of Diplomatic Security.
The new badges will look like other State Department
badges, except for a different background
color. In addition to being official souvenirs
of retiree status, the badges will speed up
access to the department. The ID card will be
valid for five years.
The new badges will permit the same access to
the department as the old ID cards. They can be
used to obtain retiree visitors’ passes for limited
unescorted access to Main State’s Foggy Bottom,
service areas on the first floor, and the library on
the third floor during normal business hours.
The same privilege applies at SA-1's Retirement
Office (HR/RET), medical suites and service areas.
Retirees can continue to sign in their
spouses and dependents.
Retirees who have a Retiree ID issued by the
Retirement Office may go directly to the Main
State Diplomatic Security Identification Services
Office in Room B-237 to complete Form DS-
1838 and to be issued new ID badges.
Retirees who do not have a current retiree ID
card must complete Form DS-1838 at HR/RET,
2401 E Street NW, Room H-620, SA-1, Columbia
Plaza, Washington, D.C. 20522. Retirement
counselors in that office must sign forms to
certify the retiree status of retirees. Then retirees
can proceed to the DSIS Office in HST,
Room B-237 and be issued new retiree ID
cards.
Retirees must provide two forms of identification,
including valid department ID cards, state
drivers licenses and U.S. passports .
Since retirees must apply in person for new IDs,
AFSA recommends that retiring employees apply
before retiring and leaving the Washington
area. Make this ID badge application a “must
do” during your retirement process or when
visiting Washington, D.C.
Please Note: Retirees who have
the old retiree ID cards may
continue to use these cards
indefinitely.

Page 2 AFSA Newsletter
For Your Information
COLA Jumps to 6.2 Percent in July
Foreign Service retirees, whose annuities and
Social Security benefits are increased each year
by the cost of living adjustment will be pleased
to know that the COLA increased by 0.5 percent
to 6.2 percent in July.
The COLA is based on changes in the consumer
price index from the third quarter of one calendar
year to the next. Retirees have accumulated
6.2 percent toward the 2009 COLA, with two
months remaining in the counting period. Cost
of living adjustments sustain the value of federal
annuities, survivor annuities and Social Security
payments by adjusting these payments to
keep pace with inflation. August price indices
will be released on Thursday, Sept. 16.
There is a possibility that the COLA will rise
considerably more before the end of the counting
period, and that this may tempt Congress
to reduce or delay the start of the 2009 adjustment
for federal annuities. While Congress
passed the first law requiring automatic COLA
increases for federal retirement benefits in
1962, it has adjusted the formula for calculating
it or the date on which the COLA takes effect
more than a dozen times since then. Although
Congress could by law do the same
with respect to the Social Security COLA, this is
not likely to happen.
Please note that the full COLA applies to annuities in the old
retirement system, FSRDS. In contrast, the new system,
FSPS, uses a somewhat more complicated formula to provide
a smaller benefit. If the change in the COLA is between
2 percent and 3 percent, the FSPS COLA becomes 2 percent.
If the COLA increase is more than 3 percent, the FSPS COLA
becomes 1 percent less than the increase.
SLF Planning for Change Seminar
The Senior Living Foundation of the American Foreign
Service is pleased to announce that it will host
its “Planning for Change” seminar on Sept. 18, 2008,
from 1 to 5 p.m. with a reception immediately following.
The event will be held at the Beacon Hotel located at
1615 Rhode Island Avenue NW in Washington,
D.C. This year’s invited speakers are experts in the
fields of prescription medication concerns for seniors,
Medicare and Social Security, as well as wills
and trusts. The series of informative discussions
will explore many areas in which understanding and
advanced planning make all the difference.
If you would like to attend the “Planning for Change”
seminar or get more information, please contact the
Foundation at (202) 887-8170 or at
info@slfoundation.org. Space is limited, so RSVP
today!
WETA Invitation
AARP and WETA 26 are inviting AFSA Retirees to a
live taping of public television’s longest-running
news and public affairs program, Washington Week
and National Journal with Gwen Ifill. The event will
take place on Friday, Sept. 5, 2008 at 5:45 p.m. at
the George Washington University Lisner Auditorium.
The taping includes a Washington Week extra :
an additional half-hour special, featuring a question
and answer session with the audience. A reception
will follow.
Guests must be seated by 5:30 p.m. Taping begins
at 5:45 p.m. This free event is open to the public,
but reservations are required.
For tickets, please call (703) 998-2691, or e-mail
lcircle@weta.com.

Page 3 AFSA Newsletter
Some Legislative Issues To Watch
Medicare
Payments to Physicians
On July 15, the House and Senate voted to override a
presidential veto of H.R. 6331. The override reversed
a July 1 payment cut of 10.6 percent for
physicians who treat Medicare beneficiaries.
Lawmakers responded to widespread concern
that the cut would discourage doctor participation in
Medicare. The override also took funds from private
insurers who run Medicare Advantage plans to reimburse
doctors who have Medicare patients. The
House voted 383-41 and the Senate voted 70-26 in
favor of overriding the veto.
Medicare D Costs for Participants
In a recent report, the House Committee on Oversight
and Government Reform reported that taxpayers
are paying up to 30 percent more for prescription
drugs under Medicare's privatized Part D program
for seniors and the disabled than under the
government's Medicaid program for the poor.
Under Medicaid, drug companies are required to sell
prescription drugs to the government at discounted
prices. Private Medicare Part D plans are not subject
to the same discount requirement. Since Part D went
into effect two years ago, drug manufacturers have
earned $3.7 billion more than they would have
through prices under the Medicaid program, committee
investigators found.
Chairman Henry A. Waxman (D-Calif.) said he would
introduce legislation to guarantee that federal taxpayers
are not charged higher prices under Medicare
Part D than under Medicaid. In response, Rep. Thomas
M. Davis (R-VA.), ranking Republican on the
oversight committee, said that the cost of Medicare
D had been 40 percent lower than original estimates
and that more economically disadvantaged seniors
have access to prescription drugs than ever before.
TSP
The Federal Retirement Thrift Investment Board is
considering a proposal to allow the spouses of deceased
federal employees to continue managing
their TSP funds instead of withdrawing them within
60 days. According to a FRTIB official, this would
bring the system into line with many private sector
plans, but would require full implementation of new
technical upgrades. The proposal would require congressional
authorization.
Recent tobacco legislation adopted by the House
contains some unrelated provisions that affect the
Thrift Savings Plan. The bill provides for automatically
enrolling new employees and beginning immediate
employer matching contributions; adding a
Roth account option; and giving authority to the
FRTIB to permit participants to invest in mutual
funds outside the funds currently offered by the
plan. Critics have questioned whether this latter provision
would change the investment philosophy of
the TSP. Companion legislation would have to be
adopted by the Senate and signed by the President
for these provisions to go into effect.
Unused Sick Leave
In the bill mentioned above, the House also voted to
allow federal employees in the new federal retirement
systems — and by implication the Foreign Service
Pension System — to receive retirement credit
for their unused sick leave. At present, employees
in the old retirement systems can apply their unused
sick leave toward retirement, but employees in the
new systems cannot. The bill would allow employees
who retire in the next three years to get credit towards
retirement for 75 percent of their unused sick
leave. Employees retiring after this time would get
credit for all of their unused sick leave. Since years
of service is one part of the formula used to calculate
annuities, getting credit for unused sick leave
could increase annuities.

Page 4
AFSA Newsletter
From the Department
From FSI
Job Announcements
Those of you looking for post-retirement employment
will be pleased to know that AFSA has
begun posting FSI Job Transition Program job
announcements and job search information on
our Retiree Web page. The page is located at
www.afsa.org/retiree/.
Mid-Career Retirement Course
The new two-day FSI Mid-Career Retirement
Planning course is designed as a retirement
"check-up" for mid-career U.S. government
employees who are 10 to 15 years away from
retirement.
The course will cover the following topics: calculation
of estimated income and expenses in
retirement; investment and savings options;
wills, trusts, durable and health-care powers of
attorney and living wills; age and service requirements
for retirement eligibility; calculation
of estimated annuities; factors to consider for
annuities for surviving spouses; determining
what to do and where to live in retirement;
health issues as one ages; taxes in retirement;
and the federal long-term care program for
parents, spouses and employees. This new
course complements the other retirement planning
courses offered: the Retirement Planning
Seminar (four days) and the Job Search Program
(one to two months depending on designated
retirement system).
Courses in 2009 will be held on January 28-29
and May 20-21. For information about how to
enroll, go to www.state.gov/m/fsi/
tc/99462.htm or call the Office of the Registrar
at (703) 302-7429/7144 .
Any spouse may attend. Spouses of department
employees may attend without cost.
From Charleston
Bank Mergers
Charleston has reported that recently some retirees
had difficulties when their banks were
sold or merged with other banking institutions.
Generally when mergers occur, bank clients are
advised that their banking information and accounts
will automatically transfer and convert
to the new bank. What has been happening in
more than a few instances is that the conversion
works for a while and then fails. As a result,
there have been delays with automatic deposit
of annuity payments.
If your bank is consolidated with another, it
might be wise to talk to the new bank officials
about converting your account, or formally
change your banking information and convert
your accounts to the new institution.
It happens. Employees and their spouses put
off planning for and finding out what lies
ahead for them in retirement until they retire.
And then, some wish they had done things
differently. Plan ahead: take the Mid-Career
Retirement Course at FSI and read the guidance
AFSA regularly provides in the AFSA
Newsletter and Foreign Service Journal.

Page 5
AFSA Newsletter
About AFSA
Why I Became a Lifetime AFSA Member
Kudos to Bill Farrand and Bonnie Brown for
their article in the April issue of the Foreign
Service Journal about poor and inconsistent
State Department services for retirees! Frustrated
by State’s failure to respond to my queries
on a timely, accurate basis, I finally appealed
to AFSA for help.
Since AFSA began advocating for me, I have
benefited from timely, correct responses and
appropriate actions. AFSA intervention worked
where my squeaky wheel efforts failed.
What went wrong before I turned to AFSA?
Here’s a summary. The pre-retirement, routine,
annual estimates of the annuity I received were
significantly higher than the annuity I received.
My retirement plaque and letter cited 31 years
of service, while my annuity was based on significantly
fewer years of service. After my husband
died, various errors were made in calculating
both the annuity for my employment and
the annuity for my husband’s employment.
Those errors compounded. Without warning,
several thousand dollars were deducted from
my banking account for an overpayment. That
resulted in my account being overdrawn. In order
to correct one of the errors, I had to file a
correction to my 2006 income tax.
Since AFSA began advocating for me, I have
benefited from timely, correct responses and
appropriate actions. AFSA intervention
worked where my squeaky wheel efforts
failed - - Ann Berry
At a number of points — as the errors piled up
— I called Charleston daily. For the most part,
my calls were not returned. On occasion, the
staff there referred me to the staff in Washington,
D.C., or the reverse. I want to commend
the retirement staff who did talk to or e-mail
me for being extremely courteous and often
even apologetic throughout my saga. It was as
if they, too, were victims in a system beyond
their control.
I continued my AFSA membership after I retired
in order to keep in touch with the arena where I
had spent my entire adult life. I now realize that
I also need AFSA as an advocate. And that is
why, after the last time AFSA intervened for me,
I became a Life Member.
- By Ann Berry, Retired FSO
AFSA’s 2009 Retiree Directory
Is your contact information current?
Please send changes of name, address, telephone
numbers and e-mail address to:
AFSA Membership
Tel: (800) 704-2372, ext. 2
(202) 338-4045, ext. 525
E-mail: afsa@afsa.org
Bonnie Brown
Retiree Counseling
and
Legislative Coordinator
Monday through Wednesday
(202) 944-5509 or 1 (800) 704-2372, ext. 509

FEHB
There is still no word on whether the Office of Personnel
Management will ask health plans to create a
separate plan for Medicare-eligible retirees. As explained
in our April issue, AFSA and other retiree
organizations are wary of the OPM proposal because
of the possibility it could open the door to establishing
a separate FEHB plan ― with lesser benefits
and higher premiums costs ― based on age.
In another respect, we members of FEHBP can count
ourselves lucky, since our coverage provides more
than simple good health coverage. In a recent poll
conducted by the Kaiser Family Foundation, a health
policy research group, 7 percent of adults said
someone in their household had married in the past
year to gain access to health insurance. The foundation
said that this is an intriguing indicator that
some Americans “are making major life decisions on
the basis of health care concerns.”
Something to think about: According to the Center on
Budget and Policy Priorities, Social Security's projected
shortfall over the next 75 years is slightly less than the
estimated cost over that period of extending the 2001
and 2003 tax cuts just for the top 1 percent of households.
Foreign Service officer seeks information from
those knowledgeable about FSO Felix Russell Engdahl,
who was posted to Port-au-Prince, Calcutta,
and Shanghai and who died in Hong Kong in 1942.
Contact: Jason Vorderstrasse, 8000 Hong Kong
Place, Dulles, VA 20189-8000, vorderstrassejg@state.gov.