I'm a little confused about example (1) in Q&A -14 of Proposed regs on transit passes. In the example, the employee reduces his or her compensation for up to the statutory limit each month and receives a pass for that month. The IRS says this example is an example of a valid compensation reduction election. Thus, if an employee reduces compensation during March and receives a pass for March during March, that is acceptable. A more realistic example, and one that would be more palatable to employers and employees is to have the employee make payroll deductions in February and receive the pass at the end of February so that the employee could purchase tickets for March. Neither the proposed regulations nor the examples state that such an approach would be acceptable. Any thoughts on this?

I agree with your observation about more "palatable", not to mention more practical.
You may want to offer comments to IRS during the comment period for the prposed regs.