Commuter Transportation Benefits Plan September 2016

Introduction Federal tax law under Internal Revenue Code Section 132(f) allows employers to sponsor a program under which employees can set aside money on a pretax basis to pay for qualified commuter expenses. The commuter transportation plan that we have allows you as employees to set aside a portion of your pay toward mass transit, van pool, parking and bicycling expenses. This presentation provides you with basic knowledge of these plans and, in particular, our plan. Note to presenter: This is a sample presentation intended for presentation to all employees. It is designed to be presented by an individual who has knowledge of the employer’s commuter transportation benefits program. This is a sample presentation that must be customized to include and match the employer’s own plan.

Agenda What is a commuter transportation benefits plan? How our plan works Advantages and disadvantages of enrolling Minimum and maximum contributions Types of qualifying commuter transportation expenses Tips for your commuter transportation benefits elections

What Is a Commuter Transportation Benefits Plan? A commuter transportation benefits plan is a type of benefits plan under Section 132(f) of the Internal Revenue Code that allows you to set aside money on a pretax basis to pay for qualified work-related transportation expenses for mass transit, van pools, parking and bicycling.

How Our Plan Works Our commuter transportation plan is funded through your voluntary pretax salary deductions. All full-time, regular employees are eligible for the plan. To enroll, you must complete and submit the Commuter Transportation Benefits Plan Enrollment and Change form at least 10 business days before the first of the month. The form is available from human resources. Your enrollment will be effective the first of the month following correct completion and submission of the enrollment form. Note to presenter: These slides were created based on a sample policy and must be customized to be consistent with your company policy and practices.

How Our Plan Works (cont.) To receive reimbursement, complete and submit the Commuter Transportation Benefits Plan Reimbursement Request form, along with the original receipt or cancelled check, to the accounting department by the 10th of the following month or no later than termination date or cancellation of enrollment. Any unreimbursed amount will be carried over to the following month. You are eligible for reimbursement for any monies left in your account as long as you are employed by this organization. Upon termination, though, any money left in your account will be forfeited.

How Our Plan Works (cont.) To make changes to or to cancel your enrollment, you must complete and submit the Commuter Transportation Benefits Plan Enrollment and Change form at least 10 business days before the first of the month. Any change will be effective the first of the month following correct completion and submission of the form.

Questions? Comments?

Advantages and Disadvantages of Enrolling Significant tax savings. Contributions you make to the commuter transportation plan are exempt from federal, state, Social Security and Medicare taxes. Cost savings. Because of the tax savings, expenses for which you are reimbursed cost you less than if you paid for them with after-tax income.

Advantages and Disadvantages of Enrolling (cont.) Forfeiture of any unused funds not requested for reimbursement upon termination of employment. Paperwork: You must initiate the reimbursement process by collecting receipts and completing reimbursement request forms. You must keep all receipts and records to substantiate expenses.

Questions? Comments?

Types of Qualifying Commuter Transportation Benefits The four types of qualifying benefits are: Mass transit. Can be a publicly or privately operated bus, rail or ferry service. Expenses may be for a pass, token, fare card, voucher or similar item allowing the person to ride in a vehicle that seats at least six adults, not including the driver. Van pools. A commuter highway vehicle used for transportation from the employee’s home and workplace. The vehicle must seat at least six adults including the driver, and at least one-half of the seats, not including the driver’s, must be taken by our employees.

Types of Qualifying Commuter Transportation Benefits (cont.) Parking. Parking provided on or near the workplace. Also included is parking provided on or near the location from which you commute to work using mass transit or van pools. This does not include parking at or near your home.

Types of Qualifying Commuter Transportation Benefits (cont.) Bicycling expenses. A qualified bicycle commuting reimbursement is an employer reimbursement during the 15-month period starting with the first day of the calendar year for reasonable expenses for the purchase of a bicycle and accessories, bicycle improvements, repair, and storage, provided the bicycle is regularly used to travel to and from work. You may not receive any bicycle reimbursement in any month in which you receive other qualified transportation benefits. Unlike other commuter transportation benefits, bicycle commuting benefits are not provided under an elective salary reduction agreement but are reimbursed based on submission of qualified expenses.

Questions? Comments?

Minimum and Maximum Contributions What is the minimum you can contribute to the commuter transportation benefits plan? The minimum you may contribute for combined mass transit and van pool expenses or for parking is [insert amount]. What is the maximum you can contribute to the commuter transportation benefits plan? You may contribute up to [insert amount] a month for combined mass transit and van pool expenses or [insert amount] per month for parking. You may receive up to [insert amount] per month for every qualified bicycle commuting month in a calendar year. Note to Presenter: Insert the correct amounts above.

Questions? Comments?

Tips for Your Commuter Transportation Benefits Elections Plan your contributions: Before making your election, make a list of all your anticipated eligible expenses. Avoid overestimating your expenses so that you will not have unused funds for which you have no eligible expenses at plan year-end, which will have to be forfeited. Monitor your balance regularly to keep track of your account.

Questions? Comments?

Summary A commuter transportation benefits plan is a type of benefits plan under Section 132(f) of the Internal Revenue Code that allows you to set aside money on a pretax basis to pay for qualified work-related transportation expenses for mass transit, van pools, parking and bicycling. Our commuter transportation plan is funded through employee voluntary pretax salary reductions. All full-time, regular employees are eligible to participate.

Summary (cont.) You receive reimbursement for eligible expenses from the accounting department by the 10th of the following month for expenses submitted during the previous month. To make changes or to cancel your enrollment, you must notify HR at least 10 business days before the first of the month. Any change will be effective the first of the month.

Summary (cont.) Advantages of the commuter transportation plan are that the contributions you make are exempt from federal, state, Social Security and Medicare taxes. Because of these tax savings, expenses for which you are reimbursed cost you less than if you paid for them with after-tax income. The disadvantages are that any unused funds not requested for reimbursement upon termination of employment are forfeited and that you must keep and complete paperwork to be reimbursed.

Summary (cont.) The four types of benefits are mass transit, van pools, parking and bicycling expenses. The maximum you can contribute is [insert amount] per month for combined mass transit and van pool or [insert amount] per month for parking expenses. The minimum is [insert amount] per month. You may receive up to [insert amount] per month for qualified bicycling expenses. Before making your election, make a list of your anticipated expenses and avoid overestimating. Note to Presenter: Be sure to insert the correct amounts above.

Questions? Comments?

Training Evaluation Please be sure to complete the evaluation sheet you received with your handouts. I thank you for your interest and attention!