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Today's read: SmartBenefit program changes

Starting Jan. 1: Metro says a new system for adding transit benefits will comply with IRS rules. But riders are already upset about one change: At the end of each month, any unused transit or parking benefits in the new electronic purses will be credited back to employers. Metro said that employees who contribute a portion of their pretax salary to the SmartBenefits program should contact the employer to determine how the employer will handle the unused portion of their pretax contribution. (Lena H. Sun)

Related development: Metro says long-awaited SmarTrip improvements that were to be in place by year's end -- including making bus and rail passes available on the cards -- won't happen till next fall so Metro can focus on the IRS rule.

By Robert Thomson  |  October 28, 2009; 9:00 AM ET
Categories:  Metro  | Tags: Dr. Gridlock, Metrobus, Metrorail, SmarTrip, SmartBenefits  
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Comments

Under the current rules, don't you lose any benefit that you haven't transfered to your card by the end of the month? I don't think there is any distinction made between the part contributed by your employer and your own pre-tax contribution. While this change might benefit employers, I don't see how it will hurt riders?

Posted by: buffysummers | October 28, 2009 9:44 AM | Report abuse

My concern is that the current signup form doesn't really give a way to specify what portion of your benefit goes to which of the two "pools" (parking vs transit fares). I pay approximately double in fares over parking, so a 50/50 split in the benefit would leave me with too much parking cash and not enough fare cash.

It seems like the only way to deal with the lack of monthly rollover if you're paying your own cash onto the card is to budget for 20 working days worth of fares and supplement that with (post-tax) dollars when it runs out. Even that isn't perfect (you might still overshoot in December and February), but it's probably the best compromise you're going to get between not losing money to rollover and paying as much as you can out of pre-tax dollars.

Posted by: adbiosec | October 28, 2009 10:14 AM | Report abuse

I don't understand how SmarTrip will be able to differentiate between usage funded by employer money and usage funded by personal funds. Is SmarTrip going to be reconfigured with a HAL-type of computer: one that can determine when I'm using Metro for work and when I'm using it for personal transportation? Roughly 2/3 of my rolling balance from month to month is personal funds. I'm concerned that the "pulling" of unused money at the end of the month will be "pulled" from my personal funds.

Posted by: mjc11 | October 28, 2009 10:59 AM | Report abuse

From Dr. Gridlock: I think this program has the worthy goal of making sure that taxpayer-supported benefits aren't misused. Among the things I don't like are that all this is being unveiled a relatively short time before the program starts.

This is basically a system the IRS laid out in 2006. But now employers who administer benefits programs have to find out the details so they can answer employees' questions and then the employees have to put through the paperwork to do whatever changes may be appropriate to their personal situations.

Another thing I don't like is that other important upgrades in the SmarTrip card program are being delayed. Metro says it's so it can concentrate on complying with the IRS rules. How long have we been talking about commonsense improvements like being able to add the value of a Metro pass onto the SmarTrip card, or being able to add value online instead of having to line up at vending machines? Those things were supposed to happen this year. Now they're being delayed till next fall.

Posted by: rtthomson1 | October 28, 2009 11:18 AM | Report abuse

@mjc11: My impression is that the system won't be able to differentiate between commuter and personal use. Let's say that your employer gives you $200/month. The system will pull from your commuter "purse" until there is no money left (regardless of whether it is for commuting or personal use), and then pull from your personal "purse" if you go above that $200 mark in a given month. The difference with the new system is that if you don't use your commuter "purse" of $200 within a given month (for commuter or personal use), then that leftover money will be returned to your employer at the end of the month. Your personal "purse" will not be touched until/if you exceed your $200 allotment. With the current system, there are no purses, and if you happen to spend less than $200 in a given month, that amount stays on your card.

Posted by: davohuang | October 28, 2009 11:51 AM | Report abuse

I have not read that the employer pre-tax account is debited until exhausted before my personal account but sure hope that's the way it will work.

Also, this means I now have to know exactly how many days I'll be working each month and predict any sick days or unexpected work travel, etc. or lose my money. I can't see how this is going to work; it means just less benefit, more folks not using the cards, and even more jam at the farecard machines.

Posted by: cwizper | October 28, 2009 2:29 PM | Report abuse

I should clarify that my example was for 100% employer-funded SmartBenefits. I belive employee-funded (pre-tax) contributions will be handled by the employer (though the specific details are unclear to me). Here is a relevant quote from Lena Sun's article about the changes from today's WaPo: "Metro said that employees who contribute a portion of their pretaxed salary to the SmartBenefits program should contact the employer to determine how the employer will handle the unused portion of their pretaxed contribution."

Posted by: davohuang | October 28, 2009 5:02 PM | Report abuse

I just read through what the IRS has said on these issues, and there is absolutely NOTHING that says unused funds have to be returned to the employer at the end of the month (or the end of the year, or any time at all).

The other parts of the change do seem to be required by the IRS. But on the issue of returning unused funds, Metro appears to be using the IRS as a scapegoat for something they've decided on their own to do (perhaps because it simplifies their accounting).

Posted by: robwilli | October 28, 2009 5:17 PM | Report abuse

I don't commute on the Metro and am not eligible for these benefits (self-employed), so it doesn't affect me, but the sentence quoted by "davohuang" regarding employees' pretax contributions and how they should ask their employer about it strikes me as unhelpful (no offense to davohuang, as it's not his fault it's unhelpful). One friend of mine works for in DC a Philadelphia-based company and their benefits people (located in Philadelphia, of course) ignored all the stuff about the phaseout of the paper Metrocheks until just a few weeks before the changeover happened. I'm sure that for people in that situation, this latest change is going to be an utter nightmare, as I find it hard to imagine that out-of-town benefits specialists are aware of, or focusing on, this new DC-area procedure. The major problem is what happens if WMATA returns part of an employee's pretax contribution to the employer. That money is the employee's money. Should the employer then pay it out as after-tax compensation? Or should they allow the employee to apply it towards the next month's pretax contribution, with the end result being that at the end of the year the employer has to do a reconciliation of the amount the employee wanted to put towards pre-tax transit and the amount WMATA ultimately allowed, with the employee then being paid the difference on an after-tax basis? Might be nice for Christmas bills to get that cheque in early January, but it's a hassle and it denies you the interest or other return on the income you might have realized during the year.

Posted by: 1995hoo | October 28, 2009 5:18 PM | Report abuse

After reading these comments, it is clear that there are many variations on how the commuting benefits are applied. Some have employer-funded benefits, some are employee-funded, and some are mixed. Not to defend Metro (because they could have explained this themselves) but it is impossible for Metro to know how much of the funds are from the employer and/or employee. The only thing they will know is how much is for fares and how much is for parking, not where those funds came from. It is reasonable, therefore, that the only option they would have is to give the excess money back to the employer at the end of each month and let the employer deal with it (since at least the employer ought to know how much was theirs and/or the employees). The angst that most folks are feeling right now is due to the fact that they do NOT know at this point how their employers will handle this and are assuming the worst - that it will just disappear. (And, why not? Only human nature). But the point is well taken - find out from your employers what they plan to do. I bet most folks will feel better about all of this once they know. However, Metro surely could have handled this much better (waiting until the last minute to communicate important news seems to be a specialty). My own situation - 100% employee funded, but I only have until 10 Nov to set my benefits for JANUARY! Almost two whole months lead time. I've got a couple of weeks to find out how my employer will handle this.

Posted by: drf123 | October 29, 2009 7:05 AM | Report abuse

So are they saying that if i download $100 onto my card, and i only use $50, they will take the remain ing $50 away from me?

Posted by: authoritarian | October 29, 2009 9:43 AM | Report abuse

The comments to this entry are closed.

 
 
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