Notice of Potential Accumulation of Transit Benefits on Transit Vendor Accounts

The Department of Transportation (DOT) in its role as the Federal Transit Benefit Executive Agent,[1] recommends that you review your transit benefit program to ensure that Federal employees who are not commuting due to the COVID-19 public health emergency have taken appropriate actions to review their transit benefit subsidy and revise their WMATA SmartBenefits transit allocation to third-party transit providers for travel on MARC, VRE, MTA Commuter Bus and vanpools. DOT has learned that some Agencies have accumulated significant unused funds because employees have not appropriately updated their allocation to halt the purchase of transit fare from a third-party vendor. Failure to halt unused transit allocations represents a loss of funds that the Agency could have potentially used for its own mission-specific purposes if consistent with applicable law.

Background

DOT, in its role overseeing the transit benefit government-wide policy, has coordinated with transit providers in the National Capital Region (NCR) to ensure the integrity of the transit benefit subsidy, especially during this time where there is decreased usage.  Second, DOT has been designated by OMB as the lead Federal agency to facilitate the return of any excess transit benefits accumulating in third-party transit providers’ accounts to the Treasury, and to monitor and prevent the future accumulation of excess transit benefits. In our dual roles, DOT has been made aware that we are projected to receive approximately $12 million in returned transit benefit funds from transit providers across the country this year, which is three times more than normal.  Once received, these funds must be returned to the U.S. Treasury.  

A substantial portion of the $12 million in returned transit benefits appear to be associated with transit allocations to third-party transit providers such as MARC, VRE, MTA Commuter Bus and vanpools in the NCR. If an Agency uses SmartBenefits, employees can choose to take the Metro or use WMATA’s allocation process to take other local commuter rails like MARC or VRE or use a van pool.  In WMATA’s SmartBenefits program, unused benefits for employees taking the Metro are returned to the Agency monthly.  Therefore, Transit Benefit Administrators may choose to advise participants not to stop their benefit or change their benefit amount, if they commuted using the Metro prior to the COVID-19 crisis (this is the best practice).   

However, if employees who are not commuting utilize the SmartBenefits transit allocation process to facilitate the purchase of tickets from a third-party vendor (MARC, VRE, etc.), action should be taken to revise this. Unlike for Metro users, WMATA allocates those funds to the third-party vendor and then those unused benefits cannot be returned to the Agency participant SmartBenefit account. This results in an accumulation of funds at the third-party transit provider which are then returned to DOT to return to the U.S. Treasury. This is an administrative burden for the transit providers, but more importantly it is potentially a loss of funds that Federal agencies could have used for their own other mission-specific purposes if consistent with applicable law. WMATA has provided guidance to participants and Transit Benefit Administrators on how to halt their allocation to a third-party vendor. We have attached that information to this communication.

Federal Transit Benefit recipients have a responsibility to manage their transit benefit.  Benefits are calculated on a monthly basis and employees are not permitted to accumulate benefits in excess of their actual monthly commuting costs in subsequent months.  Through communication with the transit providers, we believe many participants are still receiving their monthly ticket in the mail but not using it to commute to work. During this time when many employees are teleworking, transit benefit recipients must take an active role in managing their third-party transit benefit allocations.

At the beginning of the COVID-19 public health emergency, DOT released FAQs regarding best practices for transit benefit management in conjunction with OMB which can be viewed here. DOT has partnered with local transit agencies, many of whom continue to send out monthly reminders to participants to cancel their upcoming monthly pass if they are not using it. Please also find instructions regarding how transit benefit recipients can return their unused tickets for an agency refund here.

Recommended Action

The transit benefit program is an important tool in addressing urban roadway congestion, but is only authorized to subsidize employees’ cost for using public transportation to travel between their residence and place of employment –which, during this COVID-19 public health emergency, has decreased significantly. 

WMATA’s SmartBenefits account executives stand ready to assist Transit Benefit Administrators (TBA) who use SmartBenefits. The SmartBenefits program includes a report the TBAs can use to identify employees with third-party transit allocations.  TBAs should advise employees on this report that are not commuting to login to their SmarTrip account and delete their third-party transit allocation.  The employee should remain enrolled in the SmartBenefits program (this is the best practice).  The difference is that once the employee’s transit allocation is deleted their transit benefits will go to their SmarTrip card instead of to a third-party.  Unclaimed SmartBenefits on a SmarTrip card are automatically returned to your Agency and your employees will be positioned to easily reestablish their transit allocation once they begin commuting again using a third-party transit provider. 

To reduce unused funds from accumulating at third-party transit providers and becoming unusable to the agency, each agency should work with its Transit Benefit Administrators and participants to ensure that employees who are not commuting due to the COVID-19 public health emergency have taken appropriate actions to update their transit benefit subsidy and revised  unused allocations to third-party transit providers. The lead of the Transit Benefit Policy Office, Emily Anderson, is available to answer your questions.  You can reach her at 202-893-0522 or at Emily.anderson@dot.gov.

Marie Petrosino-Woolverton

Director, Office of Financial Management and Transit Benefit Programs

US Department of Transportation