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Do you depend on SmartBenefits to pay for your daily jaunts around Metro-land? If so, pay attention: WMATA has announced some changes to the way that your transportation cash will be distributed. The coolest change? Instead of having to go to the farecard machine to download allocations to your SmarTrip card, your monthly balance will automatically be added whenever you tap your card to any Metrorail faregate, parking target or bus farebox, saving you precious seconds. The downside? Beginning in 2010, if, for whatever reason, you don't use any public transportation for an entire month, the funds allocated will be credited back to your employer. While a scenario -- outside of extended foreign travel -- where you don't use touch any sort of Metro farebox for 30 consecutive days is difficult to imagine (and most employers would presumably just roll it over), we can already imagine the kinds of epic complaints that could arise. The changes will also allow the option to allocate funds to a flex account which can be transferred between both parking and transit.
Changes On Tap For SmartBenefits
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How will this interact with the maximum amount? What if the first time you use it that month happens to put you over the $300 limit?
nice. i thought the limit was lowered to 200?
I've actually been confused by another aspect of the changes. We recieved an email at work about it another changes says that:
"Finally, beginning in 2010, your unused transit and parking benefits will not roll over from month to month. Any unused benefits at the end of the month will be credited back to your employer. New benefit amounts will be available on the first day of the month. However, any money you put into your personal purse will always be there to use whenever you need to."
Whaaaa....rarely do I use ALL of my smartbenefits, and it seems rediculous to credit back $7 or whatever to my employer every month. What would the reasoning behind this change be?
This is ridiculous. The bad (money not rolling over) far outweighs the good (SmartBenefits added at the faregate) for a lot of people.
My company doesn't give us a commuting allowance, but we can elect to have pre-tax money taken out from our paychecks each month for SmartBenefits. If my own money goes back to my employer, does the unused money for all employees go back into one pot, or will my company be able to tell me that I didn't use $5.40 in one month? Will I have to keep track of how much money I didn't use each month? Will I have to adjust my SmartBenefit deduction every month to compensate for the unused amount from the previous month??
I only take Metro to work, and I'm sure the amount I use every month still fluctuates from month to month, simply because of vacations and times when I work late and don't have to pay rush-hour rates.
The upshot of this new system is that a lot of people are going to deliberately have less money taken out for SmartBenefits than they need every month, so that they won't risk any money going back to their employer or having to adjust their deduction every month. That means more people running out of money on their Smartrip cards near the end of the month and that means longer lines at the fare machines near the end of the month. If Metro thinks the SmartBenefits-added-at-the-faregate change will eliminate the need for them to increase the number of farecard machines that recognize Smartrip cards, they're wrong.
I am with RipleyEl. I, too, pay for SmartBenefits with my pre-tax dollars -- so why would that go back to my employer, ever? That's my money, not my employer's. They just helped process the transaction. Something is not being explained correctly here. Hello, Metro, anyone home?
I'm with againandagain and RipleyEl, Aaron, I think you're reading the provisions about crediting back incorrectly (or incompletely). You don't have to avoid using Metro for a full month to have your balance credited back to your employer ... that's going to automatically happen at the end of every month, with whatever amount is left in the SmartBenefit-for-Transit (or -Parking) "purse" on your card.
In the last few years, I can think of maybe two months when my Benefits amount (which includes contributions from my employer and me) actually ran out before the end of the month, and required me to top it up with cash. Both times, it was because I had actually lowered the amount of my SmartBenefits temporarily to let myself catch back up. As long as they prevent you from pulling value off your SmartTrip card, I don't see why the IRS should care about how long benefits linger on the card after they're delivered. If anything, just do one "credit-back" at the end of each calendar year to make sure there's a zero balance on January 1 ... doing it every month seems like it will be a major pain in the ass for all the employers involved in the SB program.
My one major question on this is how it will impact employees whose benefits come out of their paychecks pre-tax (instead of a credit from their employer). Since my smartbenefits come out of my paycheck, they are my money, not my employer's. Will the unused money be credited back to my pre-tax paycheck, or will my employer profit if I bike to work?
If the money goes back to the employer regardless of where it came from, 1) that's total bs, and 2), Metro should allow users to change their benefits monthly instead of quarterly. Some of us commute by bike when the weather's nice and only use metro during the summer and winter; the current set-up doesn't allow us to change our allocations to match our commuting style, so we all set our benefits to average out over the year. It's unfair for us to be penalized by taking our money and giving it to our employers because we choose a healthier, cheaper, and greener commuting option during the nicer months.
Oh - and since I know a lot of the people who read DCist don't check in on the weekends... is there any way you could re-post this? I bet a lot of people would be interested in this.
Seconded. Repost!
There's a lot of conflicting and confusing information flying around about the changes. DCist would be doing a tremendous public service if it would talk to Metro, get (clear) answers to the questions that this announcement has generated, and post them!
Definitely repost! While I had been aware that the SmarTrip card needed to be upgraded for software to differentiate between transit & parking funds, this refunding of unused benefits was a complete surprise. We are now having to spend money consulting with a tax lawyer to determine whether or not we are required to refund unused benefits to an employee (Metro says that we don't, but that doesn't seem right to me).
Again, at the seminar on October 20th, this caused a firestorm. Afterwards, the attendees were asked to indicate on the check-in sheet if they were "pre-tax" employers.
Metro did say that they were expecting a website to be available in January where REGISTERED SmarTrip card holders could view their balances & activity, but we'll see!
Add me to the list of those recommending that this item be re-posted on a weekday, although I definitely recommend that some DCist make a few phone calls and try to get more detailed information from WMATA. This is going to have a HUGE impact on tens of thousands of people working in the DC area, and if it's as poorly conceived as it seems to be, DCist and other media outlets need to start getting people riled up about it now.
As the person responsible for administering our qualified transportation fringe benefits program and an employer who provides the benefit to employees on a pre-tax basis, I can tell you that the new provision of unused benefits not carrying over from month to month is a nightmare.
I attended the seminar that Metro put on last week and this was a huge problem for many employers. Right now, we can log onto the SmartBenefits website to see who has not claimed their benefits and send around a reminder notice. Beginning in January, once you touch your card to a SmarTrip target, your total monthly benefits will automatically download to your card (or a “virtual account”, as Metro puts it). Since there are now 3 separate purses on the card (personal, transit & parking), you will always be able to download the full amount. However, employers don’t have access to an individual’s SmarTrip card and won’t be able to anticipate refunds of unused benefits, which are in turn refunded to the employee. From a payroll perspective, you’ll have to be constantly adjusting payroll deductions.
I questioned the Metro staff as to what IRS regulation supported the refunding of unused (as opposed to unclaimed) benefits, as documentation that I’ve found clearly states that unused benefits in one month CAN be carried over to the next. Their response basically was that "our general counsel said that we can do this."
Unfortunately, Metro didn’t roll out this information until mid-October and any benefit changes for January will have to be processed by December 15th.
Dr. Gridlock has picked up this story on his Get There blog, citing DCist & UnsuckMetro. He said that their transportation reporter, Lena Sun, is working on a story about the upcoming changes to SmartBenefits.
Ha! I tried asking about these changes during Dr. Gridlock's online chat on Monday, but didn't make the cut (I got to the chat near the end). So I sent him an e-mail afterwards, asking about the changes and linking to the UnsuckDCMetro and DCist posts. The blog entry you reference is here: http://voices.washingtonpost.com/getthere/2009/10/these_smartbenefit_changes_are.html
Thanks for keeping on top of this, bdk. Your comments have been helpful. It's disturbing that our office's SmartBenefits administrator has yet to receive any notification about these changes. She only knows about it because I sent her the UnsuckDCMetro and WMATA links. She called our WMATA account rep on Thursday, and has yet to hear back from him/her.
Once again, I hope this won't be the only post that DCist has on this topic.