Mass Confusion Over Mass Transit

By Kellie Lunney

January 10, 2013

In last week’s column, I talked about some pay and benefits-related issues that took effect on Jan. 1 (and a few that didn’t). The boost in the mass transit subsidy attracted a lot of interest from federal readers, many of whom commute to work on public transportation.

Congress included a provision in the fiscal cliff deal that restores parity between the mass transit subsidy benefit and the current parking benefit for commuters. The mass transit benefit fell to $125 per month in 2012 because Congress failed to extend it; the new law increases that to $240 per month through 2013, matching the current parking subsidy for commuters. But the legislation makes the increase retroactive to Jan. 1, 2012, leaving many people confused as to what that means, practically speaking.

It’s still not clear what the retroactive portion of the provision means, so the Obama administration (most likely through the Internal Revenue Service) will have to issue guidance clarifying the situation. Employers with participants in the program who made both pre- and post-tax elections likely will be able to recalculate pre-tax elections back to the retroactive date, said Jody Dietel, chief compliance officer for WageWorks, a California-based company that provides tax-advantaged programs for consumer-directed health, commuter and other employee spending account benefits, by email. “The solution is not as clear for those employers handing out transit passes or who did not have after-tax elections,” said Dietel, whose information was based on “informal interaction with IRS and Treasury.”

Stay tuned. I’ll provide updates on the issue when I’ve got them.

Retirement Backlog

Every month the Office of Personnel Management posts the number of new and old federal retirement claims in the queue. Congress last year directed the agency to publicly track its progress in eliminating a decades-long backlog that has infuriated federal retirees, who, in many cases, have waited years to receive their full pensions from the government.

While OPM reports that it is making a dent in the backlog, not everyone obviously has benefited. The process remains hit or miss, as evidenced by the many personal anecdotes I’ve received from federal retirees who are still waitin’ on a claim. Take, for instance, Bonnie Fairbanks. Fairbanks, who involuntarily retired from the government in 2005, waited more than three years to receive her full pension. She worked in air traffic control at the Federal Aviation Administration for more than 18 years until outsourcing forced her to retire. In April 2012, Fairbanks became eligible for what’s known as the FERS annuity supplement when she turned 56. She still is waiting to receive that money, and currently is losing $680 a month as a result -- roughly $6,000 to date.

The legislation creating the Federal Employees Retirement System in the 1980s included a special supplement to the program’s basic retirement benefit, paid to employees who retire before age 62 to bridge the gap between an early retirement and Social Security eligibility. The supplement is included in the FERS basic annuity payment and is computed and paid out by OPM after an employee retires.

Fairbanks, who lives in Arizona, said she contacted Republican Sen. John McCain’s office to prod OPM to fully process her retirement, but she still is waiting for that FERS supplement.

On The Move

Looking to make a career jump to the private sector? Or maybe you’re eyeing a job opening in another government agency? Check out John Grobe’s new book Career Transition: A Guide for Federal Employees, published by the Federal Management Institute. A former fed who worked for the Treasury Department and the Postal Service, Grobe walks feds through such tricky terrain as retirement, leaving government service before retirement and finding a private-sector job, successfully marketing skills honed in public service to the outside world, salary negotiations, and crafting the perfect private-sector resume. Given the uncertain fiscal and political environment, it might not be a bad idea to have Grobe’s book by your bedside.

Correction: The increase in the mass transit subsidy benefit extends through 2013. An earlier version of this story incorrectly stated through 2012.


By Kellie Lunney

January 10, 2013

http://www.govexec.com/pay-benefits/pay-benefits-watch/2013/01/mass-confusion-over-mass-transit/60568/