Commuter Benefit Offerings Increase
October 16, 2009 (PLANSPONSOR.com) - Despite
concerns about cutting costs during the down economy, most
employers are maintaining -- and in some cases increasing --
tax-free commuter benefits as part of their compensation
packages, according to TransitCenter's 2009 Commuter Impact
Survey.
Eight months after the passage of the American Recovery
and Reinvestment Act, which increased the amount of
tax-free income employees could use to pay for their mass
transit fares from $120/month to $230/month, TransitCenter
found that over one-third (35%) of companies surveyed offer
a tax-free commuter benefit, according to a press release.
The announcement said employees at small businesses have
been particularly enthusiastic about the increase in the
tax benefit, with TransitCenter showing that 32% of the
employees at its existing small business customers who were
deducting the monthly maximum of $120 prior to the passage
of the bill increased their deductions to above $120 after
the bill's passage.
The survey found flextime (33%), telecommuting (30%) and
Transit (30%) are the top commute-related benefits offered
by the surveyed companies. Seventy-two percent of
respondents indicated they see tax-free commuter benefits
as a way to help reduce their company's carbon
footprint.
Companies also listed "cost savings for employees" (62%)
and "enhance overall benefits offering" (47%) as the top
reasons for offering the benefit. Ninety-one percent said
their employees are still concerned about the price of gas,
despite a fall off from last summer's record prices.
As a result of the increase in the transit benefit cap,
27% of companies have seen increased enrollments, 39% have
seen an increase in their employees' pretax deductions, and
7% of companies have increase the subsidized amount offered
to employees.
Within Central Business Districts (CBDs), nearly
half of companies (46%) offer tax-free commuter benefits
to employees, compared to less than one in five companies
(19%) located outside of CBDs, the announcement said.
These companies also reported higher levels of employee
participation in the program - nearly a third (29%)
report that half their employees participate, versus just
9% of companies outside the CBDs.
Rebecca Moore
editors@plansponsor.com