Commute Expense Reimbursement Account (CERA)
The City of Salem Commute Expense Reimbursement Account (CERA) is self administered.
The Commute Expense Reimbursement Account is allowed under the Transportation Equity Act
for the 21st Century and is regulated by the IRS. Employees who pay to commute to work
have the opportunity to set aside a portion of their salary to pay for certain qualified
transportation expenses. The employee will not be taxed on amounts set aside and used for
qualified expenses.
CERA is not part of our current 125 cafeteria plan covering Health Care Spending Accounts
and Dependent Care Spending Accounts, although it is similar in nature. When you participate
in the CERA program, your state, federal and Social Security taxes are based on your salary
after the CERA deduction has been made. This means you will report a smaller income, so
you will be paying fewer taxes. These CERA deductions, however, do not decrease your Public
Employment Retirement System contributions or the amounts of disability income for which
you may be eligible. Those earnings are based on gross earnings before the CERA deduction.
Employee’s future social security benefits may be slightly lower because the amounts set aside
for the transportation costs are not subject to FICA tax. In most cases, the reduction in the
social security wage base will have a minimal effect on future social security benefits.
Please review the following information before you make your decision to participate in a
Commute Expense Reimbursement Account. If you have additional questions or need
assistance regarding CERA, contact the Human Resources Benefits Manager or Benefits
Assistant at (503) 588-6162, extension 7244 or 7241.
Eligibility
All career service employees of the City of Salem are eligible to enroll in CERA.
How to Enroll in CERA
Your CERA account will be effective the first pay period of the month following the receipt of
the completed CERA participation agreement form.
New Employees
Enrollment can become effective the first pay period of the month following your date of hire.
Current Employees
You may enroll in or make changes to your CERA effective the first pay period of any month.
The total monthly deduction will be divided into two equal amounts deducted on the first two
pay periods of the month. There will not be a deduction on any third paycheck of any month.
Participation Agreement Changes
The participation agreement may be revoked or changed at any time as stipulated above. The
employee’s participation agreement ends upon termination of employment.
Reimbursement
Complete the Commute Expense Reimbursement Account Claim form and return to the City of
Salem Human Resources.The maximum you can receive is limited to your account balance.
Amounts in excess of your account balance will be put on hold until additional deposits are
made. All reimbursement requests for the current plan year (January – December), must be
submitted no later than March 31 of the next following year or the remaining funds will be
subject to forfeiture.
Qualified Transportation Expense
Expenses incurred by the employee to purchase or pay for transit pass expense, commuter
vehicle expense (van pools), or qualified parking expenses incurred for the purpose of
transportation between an employee’s residence and place of employment or for parking in
conjunction with use of mass transit or van pool qualifies as a transportation expense.
Mass Transit is a public system or private enterprise provided by a company/individual
who is in the business of transporting people in a commuter highway vehicle (i.e.,
buses). Such vehicle must have a seating capacity of six or more adults (not including
the driver) and at least percent of the vehicle’s mileage must be from transporting
individuals to and from their place of work. The vehicle must be carrying at least three
passengers (not including the driver). This does not include car pooling.
Mass transportation includes transit passes for mass transportation to and from work.
Qualified amounts include costs of any pass, token, fare card, voucher, or other item
that entitles the employee to use mass transit for the purpose of traveling to or from
his/her place of work.
Van Pool means that the vehicle must seat at least six adults plus a driver and be
used at least 80 percent of the time to commute between home and work. Expenses
incurred for transportation in a van pool are eligible provided such transportation is in
connection with travel between the individual’s residence or part-and-ride lots and place
of employment.
Parking expenses are fees for parking at or near your primary work location, the
location where you take mass transit, or the location where you pick up the van pool.
Employees parking in City parking structures already have their parking expenses
deducted on a pre-tax basis. Only the expense of parking the vehicle is a covered
expense through CERA. Fuel, maintenance, and insurance costs, for example, are not
covered.
CERA Contribution Limitations effective 2016



Parking
Van Pool
Mass Transit
$255.00 per month
$255.00 per month
$255.00 per month
The above limitations are set by the IRS and are subject to change by the IRS.