Permission denied creating dir.. user in group

Permission denied creating dir.. user in group

This seems like it's probably going to be a stupid question.
I am trying to create a subdir in a directory which is owned by a
different user; but the group is the same that I belong to. What am I
missing that would allow my user jones to create a dir owned by
smith:developers
jones@server:/var$ ls -ltr
drwxrwx--- 2 smith developers 4096 2013-08-19 08:41 test
jones@server:/var$ mkdir /var/test/test
mkdir: cannot create directory `/var/test/test': Permission denied
jones@server:/var$ groups jones
jones : jones developers