IONA

Transportation Benefit Plan

What is the Transportation Benefit Plan?

The Transportation Benefit Plan is a fringe benefit plan, which is authorized under the I.R.S. code Section 132. It is a tax reduction plan, not an insurance plan. The Transportation Benefit Plan allows employees to pay for their transit passes, commuter (up to $130.00 per month) and qualified parking costs (up to $250.00 per month) on a pre-tax basis. Please note that only employee expenses (not dependant) are eligible. Transit/Commuting Account (TRN) A transit/commuting account allows you to use pre-tax dollars (up to $130.00 per month) to pay for your transit/commuting expenses.

Some examples of eligible transit/commuting expenses are as follows:

* Bus Passes
* Rail Passes
* Vanpool Services
* Water Shuttles

Qualified Parking Account (PRK) A qualified parking account allows you to use pre-tax dollars (up to $250.00 per month) to pay for your workplace or your commuter parking expenses.

How do the benefit plan accounts work?

When you participate in either of the plans, you choose a set dollar amount to be deducted from your gross income before any taxes are taken out. The pre-tax money is then deposited into a reimbursement account which has been set up in your name. When you pay for an eligible expense, submit your receipt with a completed claim form to ABS and you will receive a reimbursement check from your account. TRN & PRK funds that are unused during the plan year will be carried over into the next plan year.

How much will you save with a transit/commuting or qualified parking account?

The following chart demonstrates how savings are realized by utilizing pre-tax versus after tax dollars to pay eligible expenses. Savings are based on a one hundred and twenty dollar ($120.00) monthly contribution and a 26.65% tax rate.

 
Without Plan With Plan
Monthly gross earnings
$1600 
$1,600
Account Deposit (pre-tax)
$0.00
$120.00
Taxable Wages
$1,600
$1,480

Taxes:
26.65%

Federal 15.00%
State 4.00%
FICA 7.65%
$240.00
$64.00
$122.40
$222.00
$59.20
$113.22
Expense (after-tax)
$120.00
$0.00
Take Home (Net Income)
$1053.60
$1085.58
Savings Per Month
$0.00
$31.98
Annual Savings
$0.00
$383.76


ABS manages this benefit for many companies and can answer all of your questions. Call ABS at (860) 675-2261 or (877) 732-8125.

ABS Advanced Benefit Strategies
30 Mill Street
Unionville CT 06085
(860) 675-2261 or (877) 732-8125
www.abs125.com

The College reserves the right to change the employee's contribution, to modify or amend the plan design or terminate the plan.

For questions or suggestions please contact Rosemary Bartolomeo, x2049.