Fringe Benefit Pool Effective for Fiscal Year 2009-10
Matthew Fajack, Vice President and Chief Financial Officer
Paula Varnes Fussell, Interim Vice President for Human Resource Services
As you may be aware, the University is implementing a new process for charging employee fringe benefits costs to departments. Currently the university charges departments the actual cost of employee benefits. The Federal Office of Management and Budget also allows universities to use an allocation method that applies fixed rates by employee groups. This is known as a pooled fringe rate and is the method the University is implementing July 1, 2009. Although we do not expect any objection, these rates are subject to the approval of the U.S. Department of Health and Human Services. Please note that the proposed pooled rates will have no impact on the existing cost of the benefits to employees.
Why is the university changing to a process that uses pooled fringe benefit rates?
- It is considered a best practice of leading research institutions.
- It will simplify and improve the preparation and administration of budgets.
- It will simplify the grant proposal budget process.
- It will simplify the accounting for fringe benefit expenditures.
- It will provide consistent accumulation and allocation of fringe benefits expenses to all functional activities as required by Cost Accounting Standards 501 and 502.
- It will allow the university the opportunity to recover employee benefit costs from all funding sources (terminal leave payouts, unemployment benefits).
Which benefits will be included in the pooled rates?
- FICA OASDI (Social Security)
- FICA Medicare
- Health Insurance (including graduate assistant and postdoctoral associates health insurance)
- Retirement (employer contributions)
- Life Insurance
- Clinical disability insurance
- Worker’s Compensation
- Unemployment Compensation
- Vacation and Sick Leave Cash Outs
- Sick leave pool payments
What are the proposed employee categories and corresponding benefit rates?
UF has requested approval from the Federal Department of Health and Human Services for eight (8) rate pools:
|1.||Faculty(9-,10-, and 12-month)||27.88%|
|2.||COM Clinical Faculty||22.74%|
|5.||Housestaff/Post Doc Associates||18.24%|
|7.||Student OPS/Federal Work Study||0.54%|
|8.||Other OPS/Temporary Faculty||2.13%|
How were the rates calculated?
A pooled fringe rate is based on actual two-year-prior activity and includes any anticipated changes in cost for the period the rates are to cover.
Will the rate change?
Yes. The Controller’s Office will recalculate and renegotiate the rates on an annual or biannual basis.
Additional information about this new process will be available in the next few days on UF Human Resource Services’ web site. Please contact the following individuals if you have any questions:
|Jim Ferreremail@example.com||(352) 392-2068||Chief Financial Office|
|Sheela Moudgilfirstname.lastname@example.org||(352) 392-1326||Finance and Accounting|
|Linda Orfieldemail@example.com||(352) 392-1231||University Payroll Services|
|Mary Alice Albrittonfirstname.lastname@example.org||(352) 392-2477||Human Resource Services|