September 2013 COMMUTER TRANSPORTATION BENEFITS PLAN AN EMPLOYEE COMMUNICATION PRESENTATION

2 INTRODUCTION Federal tax law under IRS Section 132(f) allows employers to sponsor a program under which employees can pay on a pretax salary-reduction basis for qualified commuter expenses. The commuter transportation plan that (name of employer) provides allows employees to set aside a portion of their pay toward mass transit, van pool, parking and bicycling expenses. This sample is 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.

3 AGENDA During this meeting, we will review:  What a commuter transportation benefits plan is.  How our plan works.  The advantages and disadvantages of enrolling.  Types of qualified commuter transportation expenses.  Tips on making your plan election.

4 WHAT IS A COMMUTER TRANSPORTATION BENEFITS PLAN? A commuter transportation benefits plan is a type of benefits plan under Section 132(f) of the IRS 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.

5 HOW DOES OUR PLAN WORK?  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 at least 10 business days prior to the 1st of the month the Commuter Transportation Benefits Plan Enrollment and Change form available from Human Resources.  Your enrollment will be effective the 1st of the month following correct completion and submission of the enrollment form.

6 HOW DOES OUR PLAN WORK? (CONT.)  To receive reimbursement, complete and submit to the Accounting Department the Commuter Transportation Benefits Plan Reimbursement Request form, along with the original receipt or cancelled check, 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 us. Upon termination, though, any money left in your account will be forfeited.  To make changes or to cancel your enrollment, you must complete and submit at least 10 business days prior to the 1st of the month the Commuter Transportation Benefits Plan Enrollment and Change Form. Any change will be effective the 1st of the month following correct completion and submission of the form.

7 QUESTIONS? COMMENTS?

8 ADVANTAGES AND DISADVANTAGES OF ENROLLING Advantages  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.

9 ADVANTAGES AND DISADVANTAGES OF ENROLLING (CONT.) Disadvantages  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.

10 QUESTIONS? COMMENTS?

11 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. 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 on or near your homes.

12 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.

13 MINIMUM/MAXIMUM CONTRIBUTIONS  What is the maximum you can contribute to your commuter transportation benefits plan? –For 2013, you may contribute up to $245 a month for combined mass transit and van pool expenses or $245 per month for parking. –You may receive up to $20 per month for every qualified bicycle commuting month in a calendar year.  What is the minimum you can contribute? –The minimum you may contribute for combined mass transit and van pool expenses or for parking is.

14 TIPS FOR YOUR COMMUTER TRANSPORTATION BENEFITS PLAN ELECTIONS  Plan your contributions. –Prior to 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.

15 QUESTIONS? COMMENTS?

16 SUMMARY A commuter transportation benefits plan is a type of benefits plan under Section 132(f) of the IRS 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. 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 prior to the 1st of the month. Any change will be effective the 1st of the month.

17 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. The four types of benefits are mass transit, van pools, parking and bicycling expenses. The maximum you can contribute is $245 per month for combined mass transit and van pool or $245 per month parking expenses. The minimum is per month. You may receive up to $20 per month for qualified bicycling expenses. Prior to making your election, make a list of your anticipated expenses and avoid overestimating.

18 COURSE EVALUATION Please be sure to complete and leave the evaluation sheet you received with your handouts. Thank you for your attention and interest!