The Commuter Savings Account - a Thrifty Win-Win

The local paper has a WallStreet Journal insert each Sunday in the Business Section. This past Sunday there was an article that reminded me about a much underutilized benefit the commuter savings account.
For those not familiar with this, it is a plan where the employee can set aside money on a pre-tax basis to cover commuting expenses. Under Section 132 of the IRS Code, employees can contribute up to $120 a month for mass-transit passes (including van pools) this year and $230 a month for qualified parking. New this year, is the ability to contribute $20 a month to cover biking expenses. Unlike other savings accounts money left in these accounts can be rolled over each year so you don't lose the funds.
At a time when employees are becoming disenfranchised as benefits and employee programs are being cut and everyone is looking at how to reduce costs now is a good time to introduce or increase awareness of this program.
This offers a real savings for both the employee and your company while at the same time improving your Employment Value Proposition *.
How does your company realize the savings? Since the money is taken pre-tax it lowers the FICA amount that your company needs to pay.
How does an employee realize the savings? It reduces their taxable income which could save a few hundred in owed tax each year. It can also reduce the overall cost of them to commute to work.
You may be asking how I as a Thrifty HRIM Director can make this happen?
As the holder of the information you have the power to inform the decision makers and create the business case. Whether you are looking to get this program implemented or expand enrollment the same process applies.

1. You want to look at where your employees live relative to their work location. Determine if there is public transportation available, or a concentrated group that can car pool.
2. Work with your Payroll Manager to identify the potential FICA savings if this population would enroll in the program.
3. Contact your Benefits Director to determine plan administration costs.
4. Pull it together in a short PowerPoint deck and you have a money savings and value add proposal to take to your management team.

Being a Thrifty HRIM Director is more than just managing the HR Systems in the most cost effective manner that adds value. It is also about looking for ways to help your company save money, be more productive and increase you Employment Value Proposition*. This program is just one way to achieve that, I am sure that there are others if we just look around and remain open to new opportunities.

* For more information about the Empoloyment Value Proposing attend the IHRIM March 11 webinar where we will be presenting information about the Employment Value Proposition. Go to http://www.ihrim.org/ for registration information.