Metro will delay SmartBenefits changes by one year

Transit

Metro will delay SmartBenefits changes by one year

by David Alpert • November 19, 2009 10:05 am

Metro will postpone SmartBenefits changes for one year, iMetro reports.

Photo by rodeomilano.

General Manager John Catoe announced the decision last night at the Prince George's budget forum, which iMetro also attended. He reports that Catoe said Metro reached the decision on Tuesday. The "three purse" system will not go into effect January 1 after all, and the old system will stay in effect throughout 2010. Metro can then spend the extra year finding a better solution to the IRS issues.

This is good news. Unfortunately, it might be too late for some, as many employees had to make their January elections already, and some companies canceled their SmartBenefits program entirely. Hopefully Metro plans to put out a press release about this today, and proactively communicate this to employers.

Update: According to another attendee at that meeting, Catoe also said that Metro got permission from the IRS to keep unused SmartBenefits in the employee's "purse" instead of refunding it to employers. The IRS is requiring the separate purses, but not the "use it or lose it" provision, bearing out what some commenters said. The IRS further gave Metro permission to delay implementation for one year.

As we've discussed before, the delay might alleviate the immediate SmartBenefits problem, but while Metro was working on this system which they can't even launch, other changes that could have opened up valuable options for closing next year's budget gap got delayed without notice. I hope Catoe will address this issue and explain how they will involve the public to a larger extent in the design of the SmartBenefits system for next year and other SmarTrip features.

12 comments — Share	— tags: SmarTrip, WMATA

Many employers won't refund unused pretax SmartBenefits (Nov 13, 2009)
SmarTrip office didn't communicate "use it or lose it," delays, or contract changes (Nov 5, 2009)
Is Metro misinterpreting IRS rules on SmartBenefits? (Nov 4, 2009)
SmarTrip upgrades delayed... again (Oct 27, 2009)
Metro "punts": Will release transit schedule data for Google and others (Mar 11, 2009)

Comments

With this will come the latest delay to the Smartrip upgrades, this time until 2012...if the world lasts this long.

Of course, Metro could launch all the upgrades at once or use this grace period to get someone to write several lines of code to do it. Heck, some rider could volunteer their services to get the upgrades going.

by Jason on Nov 19, 2009 10:20 am

Why not spend the year upgrading smartrip instead of dealing with this headache?

by ah on Nov 19, 2009 10:34 am

I often find myself disagreeing with the writers on this blog. But y'all did an excellent job tracking down this and highlighting the stupidity. Good job.

by charlie on Nov 19, 2009 11:23 am

Now Metro will spend the entire year supposedly figuring out how to comply with the IRS regs and they will therefore delay everything else related to SmarTrip. Maybe other, completely unrelated things will be delayed too.

What ever happened to the claim that the IRS requires this, now, no questions asked?

by Tim on Nov 19, 2009 11:39 am

I just got out of a "seminar" with a Metro rep who came to our office to talk about the changes. Apparently he didn't get the memo because he did a full presentation on the changes, which are exactly as has been previously reported here.

by James M on Nov 19, 2009 12:03 pm

In-com-pe-tence.

by Jasper on Nov 19, 2009 12:42 pm

This is good news. I am glad Metro worked out the "purse" issue with the IRS, regardless of whether it should've done this in the first place.

Now if they'd stop punishing bus riders by charging additional fee to transfer to and from the subway.

by terkel on Nov 19, 2009 1:48 pm

Same story as James M at my company this morning.

Of course, maybe James M and I work at the same company.

by scarpy on Nov 19, 2009 2:14 pm

This is the second time WMATA has requested a delay. IRS ruling was now several years ago. One might ask why providers haven't been working toward compliance. Federal providers and employees, the largest group of participants, pay nothing for the benefit. Third party providers benefit when dollars designated for transit are not used. The IRS and Congress are unwilling clarify the benefit rules. The taxpayer rip-off and the abuse of the program continues sanctioned by all.

by Interested on Nov 20, 2009 8:04 am

Wow. I'm not sure whether to believe this yet, or wait a week and see what has changed by then.

@terkel: What do you mean by "punishing bus riders"? Paper transfers have been eliminated, but SmarTrip users get a discount transferring both ways.

by Matthias on Nov 20, 2009 3:03 pm

@ Matthias

And there was a hidden fare hike with the transfers; Metro did not mention anywhere of the rail to bus fare going from $.35 to half of the bus fare they just mentioned the bus to rail transfer and hid the other details.

It is also a punishment say if someone has a pass; one previously could use a pass on the train and get a transfer in the station and pay 35 cent for bus now the would either have to use rail pass & pay full fare on bus or buy two passes one for rail and another for the bus.

by KK on Nov 23, 2009 5:10 pm

The expansion of smartrip technology region wide allowed transit providers the ability to overcome the physical limitations of the old transfer system and eliminate transfer abuse. Those changes occurred almost a year ago. It's probably time to move on. KK fails to point out that many riders benefited from the increase in the total value of bus/rail rail/bus transfers to $1.00 as well as the increase in the transfer period to 3 hours.

by interested on Nov 24, 2009 9:13 am