Human Resource Services
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Fringe Benefits Pool
FAQs
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:
Faculty (9-,10-, and 12-month) |
27.8% |
COM Clinical Faculty |
22.6% |
Exempt TEAMS/USPS |
33.1% |
Non-Exempt TEAMS/USPS |
42.1% |
Housestaff/Post Doc Associates |
18.3% |
Graduate Assistants |
11.6% |
Student OPS/Federal Work Study |
0.5% |
Other OPS/Temporary Faculty |
2.1% |
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. University employees, be they faculty, staff or students, all have certain fringe benefits entitlements that are associated with their University appointments.
The fringe benefits pool method is a concept involving the establishment of different employee groups, each of which includes employees with similar fringe benefits entitlements. Once the various employee groups are established, the fringe benefits costs of each group are pooled to determine the fringe benefits rate for each group to be used in budgeting and accounting for University fringe benefits. Initially, eight employee rate groups were created with a specific fringe benefits rate assigned to each group. The funds generated by applying these benefits rates will be pooled and used to cover payments for employer share of benefits.
Will the rate change?
Yes. The Controller’s Office will recalculate and renegotiate the rates on an annual or biannual basis. Any shortage or surplus created during the previous year will be included in the next year rate calculation
The fringe rates will be effective June 26th which is the pay begin date for the July 9th pay period. Will this be communicated that the rates will be effective for that entire pay period or are different rates for the days in June to reflect actuals a bit closer?
The published rates will be used to calculate the fringe on the entire first pay period.
What Pool do the Fellows fall into?
Fellows are not employees and are not assessed a fringe rate; they continue to be mapped to their existing GL accounts.
What rates will be used on overtime and the special pay rate associated with emergency related work when we calculate FEMA reimbursement for claims?
Overtime pay is subject to the pooled rate associated with the employee’s job.
Why isn’t the rate for 9 month faculty less than the 12 month due to retirement health and life insurance not be paid during the summer months.
The rate for all 9, 10, and 12 month is an average of actual costs for two years including summer earning; many 9-month Faculty work as 3 month Faculty during the summer on grants and having the pooled fringe pool will allow the university to recover some of these costs.
What rate will be used to calculate the fringes for cell phone stipends and other additional pays other than the regular earnings?
The pooled rates for Faculty, Exempt and Non-exempt Teams is based on “Retirement Eligible Earnings”. Additional pay earnings will be assessed fringe at the OPS rate pool of 2.13%.
I’ve been getting questions regarding the new rates and existing grants. How does this affect existing grants that were funded with single/individual insurance?
Existing grants will be required to cover any increase in fringe costs just as they do now when our Health Insurance rates increase by re-budgeting between categories.
How will the implementation of the fringe benefit pool reduce costs in the Budget Proposal Process?
This change will properly charge research for the cost of employee benefits. Currently, certain benefits such as sick leave and vacation payout are born by the academic unit when a faculty member terminates. Summer research does not contribute to a 9-month faculty member’s health insurance. The fringe rate effectively spreads all of these costs over all employees’ activities. The range of the recurring cut is $1 - $1.4 million. The $1.2 million represents an average.
Distributions for employees will no longer allow a benefits and tax override. This will complicate our current practice for postdoctoral associates who are paid from training grants and those grants not allowing a benefits charge. Have there been discussions regarding a provision to allow a different account to be charged for fringe benefits for this type of employee?
Distributions for additional pay will no longer be input through the EPAF and will follow the distribution on the employee record.
When on-call, incentives and bonuses are paid, which will include the College of Medicine’s year-end clinical and research incentives, we typically charge FCPA accounts that may not be the same account as the employee’s salary distribution. Have there been discussions regarding establishing a system that will allow us to charge these types of payments to an appropriate account?
Earning codes for additional pays will be entered on the distribution setup page and can be split to multiple accounts; sum of distribution for each earning code entered must sum to 100%.
As a result of the pooled fringe benefit rate, we understand there are updates to HR coding that will be utilized for the appointment process. What codes are being changed?
Fringe Rates are assigned to 8 employee groups. Prior to July 2009, the College of Medicine Faculty and Post Docs were included in the Faculty Salary Plan, FA12. To permit different fringe rates to be assigned to Regular Faculty, College of Medicine Faculty and Post Docs, two new salary plans were created for the College of Medicine Faculty and Post Doc Associates.
I understand that as part of the Stimulus Package, employees who were involuntarily separated from UF between September 1, 2008 thru December 31, 2009 may be eligible to claim the COBRA premium subsidy. Under this subsidy, former employees will be responsible for paying 35% of their health, dental, or vision insurance premiums (based on plans they were enrolled in at the time of termination) while the “departments” will pay the remaining 65% for a period of nine months. Will the 65% portion paid by the employer come out of the fringe benefits pool or will this be an additional charge to the departments?
The 65% payment will not be charged to the department nor paid from the fringe benefits pool. This is a program offered by the Federal Government to assist those who have lost their jobs with a temporary premium reduction in order to maintain insurance coverage. After the qualified individual has paid their 35% of the COBRA premium an invoice from the state’s plan administrator will be sent to the University. The 65% payment will be paid from a central UF fund. The UF fund will later be reimbursed for payments made on behalf of these former employees by filing a payroll tax credit each quarter.
Will administrative and academic units continue to be responsible for the lump sum payment of vacation and sick leave when an employee terminates?
No. Upon termination after 7/1/09, the Fringe Benefits Pool will be charged the lump sum payment for the unused balance of vacation and sick leave, removing the liability from grants, contracts and the last the employing unit.