Transit Sticker Shock
Federal commuters could see their transit benefits cut almost in half if Congress doesn’t act by the end of the year.
If crowded train cars and broken escalators aren't enough, Washington-area federal employees who ride the Metro to work might want to brace themselves for another potentially unpleasant surprise. Feds could see their monthly commuter benefits cut nearly in half unless Congress acts this year to extend a Recovery Act provision.
Prior to the 2009 economic stimulus package, both public and private sector workers were limited to $120 a month in transit benefits, which came either from pretax employee contributions or as reimbursement from employers. The Recovery Act raised the benefits ceiling to $230, but that provision expires on Dec. 31 and the maximum amount will revert to $120 unless lawmakers enact new legislation. Each federal agency determines how much employees receive and how those benefits are distributed.
The benefit applies to feds nationwide and to various types of transportation, including buses and van pools, but a cut could be particularly painful in the capital region, where commuters already are enduring a series of fare hikes. Metro in June increased fares 18 percent and in August implemented a 20-cent surcharge for travel during busy "peak-of-the-peak" hours. Users also are encouraged to purchase magnetic SmartTrip passes rather than paper fare cards. Of the 285,000 users registered for Metro's SmartBenefits program, 170,000 are federal employees; 40 percent of Metro riders during peak hours are feds.
Drivers need not worry. Parking benefits will remain at $230 a month, regardless of whether Congress acts.
Paperless or Bust
The Treasury Department is moving one of its savings bond purchasing plans to an electronic system, leaving federal participants just a few more weeks to switch to the Web-based program.
The U.S. Savings Bond Payroll Savings Plan is an optional program through which federal employees and the general public can buy paper savings bonds through payroll deductions. Participants' employers deposit funds directly into a specified account, which then can be used to purchase bonds that can be cashed out at any point between one and 30 years.
Treasury in 2002 began offering electronic purchasing through TreasuryDirect.gov, but the website was optional. Now federal employees must use it, according to Joyce Harris, director of public and legislative affairs for the Bureau of Public Debt. Once employees sign up for a Treasury Direct account, they can ask their agencies to deposit money directly into the account, or they can purchase bonds themselves, just as they would with any other electronic transaction. Federal employees should contact their payroll office to start the transition, Harris said.
Military personnel and retirees were required to enroll in Treasury Direct by the end of July. Civilian employees paid by the Defense and Financial Accounting Service must do so by Aug. 31, and remaining government workers, by Sept. 30. The process will be completely electronic by Jan. 1, 2011.
Harris said there's no penalty for missing the deadline, though participants could see a lapse in savings if they don't move to the electronic system on time because they won't continue to receive paper bonds after the cutoff dates. The idea is that electronic purchasing is environmentally friendly and also prevents people from losing or misplacing paper bonds. Paper securities still will be available through banks and credit unions, she added.
In fiscal 2009, federal employees bought 38 percent of bonds sold through the payroll program. The bureau estimates tens of thousands of government civilian, military and contract workers participate in the program.